Facing this issue with the tax amount calculation on the Checkout page. We've set the tax amount to 9% Country Tax (CGST) and 9% Regional Tax (SGST) for a particular state (Karnataka) in India. For all the other states, we have set it as 18% Regional tax (IGST)instead of Country Tax. So the total tax in all cases, should show up as 18%. This is the same for all products on our store.
However, the tax on the Checkout (Information) Page shows up as only 9%. Only when the state is selected by the consumer, the tax changes to 18%. Given the high value of our items and the fact that tax is not included in pricing, this is becoming a major conversion rate issue as consumers are unhappy about the sudden changes in the total amount, after they fill all the information. Screenshot below.
How can we fix this?
PS : We've set no tax overrides right now.
Thank you for the detailed explanation of your issue and the screenshot you have provided. If I am understanding correctly, the tax rates are calculating correctly, but only when the customer selects the state they are based in at checkout?
If you do not have taxes included in your prices, the correct amount of tax will only be added when the customer has entered in enough information at checkout for our automated tax system to recognize where they are based and what the correct rate of tax to charge is. This is the case even if all orders should come with an 18% rate of tax on the order, as the system will calculate this figure in different ways. Based on your explanations, it will charge a 9% CGST rate and a 9% SGST tax rate for the state of Karnataka and a flat 18% IGST rate for all other states. This results in the same total tax percentage but it is calculated in different ways. More information about GST in India can be found here.
It is not possible to stop our tax system from behaving in this way, but it may be possible to communicate prior to checkout that all orders will come with an 18% tax rate. One way of doing this would be to change the wording on your cart page using our language editor to include this information; you could also add notes to your product pages and your FAQs page.
I hope this helps but please let me know if you have further questions.
Victor | Shopify Social Care