Regional Support: Taxes (India)

Victor
Shopify Staff
Shopify Staff
1441 139 325

Learn more about collecting and managing taxes while running your Shopify store in India.

 

This thread is part of the Regional Support threads offered for merchants based in India. To see which other topics are available, you can visit the India hub here.

 

Taxes for India can be enabled once you have added India as a country you ship to in your shipping settings. You can do this by heading to Settings > Shipping and delivery and adding the country of India to one of your shipping profiles.

 

Shopify provides a guide on charging goods and service taxes (GST), which is considered essential reading for Shopify merchants based in India. The guide covers a number of topics including details on GST registration, other forms of tax in India, and how to configure your Shopify tax settings accordingly.

 

One of the key aspects for merchants charging GST is knowing their obligations when an intra-state sale is made, and when an inter-state sale is made. For orders within the state where your business is located, you need to pay Central GST (CGST) to the central government and a State GST (SGST) to your state government. For orders outside the state where your business is located, a single tax called Integrated GST (IGST) is payable to the central government.

 

Shopify sets automatic tax rates for India and its regions, which appear as follows:

 

20-09-1bwi8-533ya

 

You will be able to change both the country tax and the tax rate for each region if desired. We recommend that all merchants required to charge and remit taxes in India review these rates and confirm they are correct. If you are unsure, or if you are wanting further clarification on what your tax obligations are, we recommend consulting a tax professional in your area.

There are also some apps that can help with managing your taxes in India, and some that can help with incorporating taxes into your invoices. These include:

 

If you have a question or comment to make about managing your taxes with Shopify in India, please post it below.

Victor | Social Care @ Shopify 
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Replies 24 (24)
aegiscabs
New Member
1 0 0

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maltitos
Tourist
4 0 0

Hi, it is basically not much I want. I just want to delete the whole of my shopify account by currently I can't access my account because I am on the pause plan. I fear that you charge me money after my pause plan has expired. Help would be appreciated

Victor
Shopify Staff
Shopify Staff
1441 139 325

Hi @maltitos,

Thank you for reaching out. If you wish to close your store whilst on the Full Pause plan, you will need to choose a plan in order to gain access to the admin and close the store. If you do not wish to do this, I can send your store to our Accounts team and ask them to close it for you on your behalf. Please let me know how you wish to proceed.

Kind regards,

Victor | Shopify Social Care

Victor | Social Care @ Shopify 
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elestilo
Tourist
8 0 3

Dear @Victor,

Hope you are safe and doing good. I think you already posted tax related details in this community group. However I still have query on tax set up for the below questions,

I'm located and created Shopify store based on India and going to sell products only to USA as of now.

1) Shall I need to collect tax from customers in USA while purchasing in my site ? Or else I can make it(tax) as $0 ? (Products are sourced from USA, EU and few from China thru Third Party app)

Note that I'm not actually selling any goods physically from India as well as I didn't own any physical store/ware house in USA.

2) Shall I need to collect tax from customers in USA while purchasing in my site ? Or else I can make it(tax) as $0 ? (Products are sourced from India thru Third Party app)

Note that I'm not actually selling any goods physically from India rather I'm doing services I didn't own any physical store/ware house in India.

Store URL:  https://www.elestilo.store/

Password: 123

 

Please guide me your suggestion it is very much helpful for me and others like me

Victor
Shopify Staff
Shopify Staff
1441 139 325

Hi @elestilo,

Thank you for getting in touch with your question. In terms of collecting and remitting taxes in the locations you sell to, this largely depends on each country and region's tax laws, and whether or not you are deemed to have a tax nexus.

For example, in the USA, taxes are typically charged on the state level and each state will have their own laws regarding which businesses are required to charge tax to their customers and pay these taxes to the state. A tax nexus is typically defined by whether or not you have a physical presence in a state—such as an office or warehouse—but US states also have distance-selling nexus laws, meaning you may be required to charge sales taxes to customers in certain states even if you have no physical presence there. This sort of tax qualification is usually based on a number of orders made into a state, or a minimum amount of revenue generated by sales to customers in the state.

For the EU, businesses are typically required to register for Value-Added Tax (VAT) in an EU member state in order to collect sales taxes from customers. Even if you are not based in the EU, you may still be required to register for and remit VAT to the member states you wish to sell to—the laws and limits here are typically determined on a country-by-country basis. The different VAT distance-selling thresholds for EU member countries can be found on the Shopify Help Center.

In general, it would be my advice to consult the tax laws of every country you wish to sell your products to, and research whether or not you are required to charge your customers any form of sales tax. If you're unsure, I would recommend speaking to a dedicated tax lawyer who can offer professional advice on what your obligations are.

Kind regards,

Victor | Shopify Social Care

Victor | Social Care @ Shopify 
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elestilo
Tourist
8 0 3

@Victor Thankyou for your detailed suggestion. I'll check tax consultants regarding this.

If you know any tax consultant in US please share so that I can directly check with him.

Since I'm in India I have to google it for find a person. And again Thank you @Victor 

Victor
Shopify Staff
Shopify Staff
1441 139 325

Hi @elestilo,

No problem at all, and I'm glad I could help. I would recommend checking out the sales tax guidance section on our Shopify Experts directory to connect with professionals who can offer you advice.

Kind regards,

Victor | Shopify Social Care

Victor | Social Care @ Shopify 
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Amythi
New Member
2 0 0

Thanks for the details. 

I have query on setting tax override on for different products with different tax rates.

Currently I have 2 different manual collections with following expected rates:

=> 1. saree: Require : SGST 2.5%+ CGST 2.5%

      2. Jewellery: Require: SGST 1.5%+ CGST 1.5% 

 But coudn't set to same.

Tried following steps:

1. Create 2 manual collections 1.saree 2.Jewellery

2. Goto Setting ->taxes->Manage[India]->set country rate to 2.5%

3. Add tax override->select collection saree->  set to 2.5%

With steps 1-3 I could set saree to expected behaviour.

4. Add tax override->select collection Jewellery ->1.5%

    But could not change country tax to 1.5%

    Now my tax for Jewellery is shown as 2.5%+1.5%= 4%

 

So my query is how can I change Country for collection to acheive the expected behaviour.

 

Thanks in Advance. 

 

 

Victor
Shopify Staff
Shopify Staff
1441 139 325

Hi @Amythi,

Thank you for reaching out and for detailing your situation. Can you tell me which state you are based in please? Does the incorrect tax amount occur both when making sales within your state, and when you sell to customers to another state? Or just one or the other?

Kind regards,

Victor | Shopify Social Care

Victor | Social Care @ Shopify 
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TCCVNS
New Member
1 0 0

Hello! 

If i tick on charge tax for this product.

Now does this mean that customer has to pay extra amount with that of product price at checkout or it will be included in the product price.

For example : Let's say i have a product whose price is 6999rs. And my tax slab is 5%. Now if i tick charge tax for this product.

Say a customer is on the checkout page, so will he have to pay 6999rs only or with 5 % extra i .e 7384rs?

Also is it necessary to charge tax ?

And another thing is my product comes in 5% tax slab. So how do change to this setting in my shopify account bcoz in tax settings it's just showings 18% or 9%.

Victor
Shopify Staff
Shopify Staff
1441 139 325

Hi @TCCVNS,

If you head to Settings > Taxes, you will see a box with the caption "All prices include tax":

21-03-vsqkr-7d7n3

If you check this box, tax will be included in the prices of the products you have listed, whereas if it is not checked then the tax will be added on top of the product prices at checkout.

In your example, if taxes are included in the price then 6999RS product will have a pre-tax price of 6665.71RS if the tax rate is 5%. This can be calculated by dividing the tax-inclusive price by 1.05. If you do not have taxes included in the price, then a 6999RS product that comes with a 5% tax charge will lead to a total cost of 7348.95RS (6999 x 1.05 = 7348.95).

If you need to charge a different tax rate than what is listed in your tax settings, then you can do this via tax overrides. Whether or not you are required to charge taxes depends on where you are based and what your local tax laws are. I would recommend contacting a tax professional if you are unsure of your obligations.

Kind regards,

Victor | Shopify Social Care

 

Victor | Social Care @ Shopify 
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NeilBDE
Excursionist
16 0 6

Dear Victor,

Hope you are doing well.

I just wanted to ask you about something. Is there is CA here from India?

I have a unique question where I need a suggestion.

Victor
Shopify Staff
Shopify Staff
1441 139 325

Hi @NeilBDE,

We do not have dedicated support advisors based in India, no, but please feel free to ask your question and I'll see what I can do to help. If it's not something I'm able to assist directly with I can always reach out to our internal taxes team and run it past them.

Kind regards,

Victor | Shopify Social Care

Victor | Social Care @ Shopify 
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bafer43
New Member
2 0 1

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Lijuj
Explorer
44 0 24

Hello @Victor 

Greetings!

I am having significant challenge with GST settings and my store is based in Kerala. Below table is what I am trying to achieve.

All prices are inclusive of taxes in my settings.

I have set 2.5% and with 5% overrides for other states for products less than Rs 1000 - working perfectly.

How do I setup  an override for products over RS 1000 to achieve the GST slabs as below?

This is what I have done, but does-not meet my tax requirements, is there a different way to do this to meet my requirement?

I have created a manual collection for products over Rs 1000, and added a tax over ride for 12% across all state except Kerala. how ever the challenge is Kerala state, where I have set the over ride to be 9.5% to achieve the overall total of 12%. But the issue is I need to show the split as SGST & CGST at 6% each, which I am not able to achieve

Now I am planing to introduce Jewellery, how do I introduce another product  section with another set of over rides with Kerala requiring CGST & SGST split.

Nay help is much appreciated

Screenshot 2021-05-05 at 09.16.37.png

 Regards

Liju

Victor
Shopify Staff
Shopify Staff
1441 139 325

Hi @Lijuj,

Thank you for getting in touch and for outlining your situation so clearly. Due to the complexity of the tax settings mentioned here I feel like we would need to take a closer look at your tax settings in order to troubleshoot and find a solution, and unfortunately I cannot do that here as we are not able to authenticate merchants via the Community. I would recommend reaching out to our support team directly via the Shopify Help Center so you can be authenticated and a member of our support team can take a direct look at your tax settings. We do also have an escalated team that specialize in taxes, so if the person you speak to is unable to resolve your issue, they should be able to reach out to them and ask for further assistance.

Kind regards,

Victor | Shopify Social Care

Victor | Social Care @ Shopify 
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papreekastore
New Member
3 0 0

Hey,

I am also a store based in india. i only need one tax rate for the country and then need to collect based on product vendor (as each vendor has different rates). my tax collection has nothing to do with regions (which seems to be the default shopify setup, that makes no sense for my store). Even though I have all tax overrides setup correctly, the store charges region based tax number instead of tax override number. This is super annoying and I would like to disable the regions setup asap. Is this possible? What can I do? I've already reached out to support and they asked me to reachout here.

Victor
Shopify Staff
Shopify Staff
1441 139 325

Hi @papreekastore,

Thank you for getting in touch and for detailing your issue. Can you tell me more about the tax situation you have, and why you need to collect taxes on a vendor-by-vendor basis? Are these taxes you need to pay yourself when you order the product from the vendor? I have not come across this setup before so would like to better understand why you need to set your taxes up this way.

Kind regards,

Victor | Shopify Social Care

Victor | Social Care @ Shopify 
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papreekastore
New Member
3 0 0
Hi Victor,

Are you familiar with how GST rate works in India? It depends on the type of the product sold. A piece of brass necklace has a different GST from a piece of handwoven palm basket which has a different rate from silver jewelry. We sell all those products. Only the IGST v. SGST+CGST rate depends on whether it was it was shipped within the same state or different states. But that is less important, I can correct that when I file the taxes.

Hope this helps - I would really like to remove the region layer for taxes on my store.