GST in India

A goods and services tax (GST) takes effect in India on July 1, 2017.

The GST is an indirect tax throughout India. It replaces other taxes and levies that are applied by the central and state governments, including Value Added Tax (VAT), Central Sales Tax, Excise Duty, and Commercial Tax, among others.

Talk to your tax consultant to make sure your business is registered and compliant with the GST.

Who needs to register for GST?

GST registration is mandatory if:

  • your turnover in a financial year exceeds Rs 20 lakhs (Rs 10 lakhs for North Eastern and hill states)
  • your business is registered under an earlier law, such as Service Tax or VAT
  • you are involved in inter-state supply of goods
  • you sell on online marketplaces.

This is not a complete list. Talk to your tax consultant to learn whether you need to register.

How should I set up my taxes?

Shopify sets a default GST rate of 18%, which applies to many common goods. Because the rate differs depending on the type of product, the specific rate cannot be set automatically. Review your tax settings to ensure that you are charging taxes correctly.

To apply different rates to different types of products, you can create hidden collections for each tax category and assign your products to these collections, and then override the tax rates for each collection.

What's the difference between IGST, CGST, and SGST?

For inter-state supply of goods or services, a single tax - Integrated GST (IGST) - is payable to the central government. For intra-state sales, you need to pay Central GST (CGST) to the central government and a State GST (SGST) to your state government.

Because you can't set multiple tax line items in Shopify, you can set up your taxes so that you are charging the sum of SGST and CGST for intra-state sales of goods.

Where can I learn more about the different GST categories?

For information about the GST categories, see the website of the Central Board of Excise and Customs.

Does Shopify provide a GST-compliant invoice?

Shopify currently does not create a GST-compliant invoice. You will need to engage a third-party GST invoicing service instead.

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