Indian GST 

GST(Goods and Services Tax) is a consumption-based tax regimen aimed at replacing the current complex structure of multiple indirect taxes levied by the state and central governments of India. It is applicable from the 1st of July 2017. If you have a commercial presence in India and your business has a gross income of over ₹40,00,000(The limit would be ₹20,00,000 for some special category states), it is recommended that you register your business for GST. Under GST, goods and services will be taxed at the rates 0%, 5%, 12%, 18%, and 28%.

Classification of GST 

GST can be classified into the following types:

  • CGST - Central Goods and Services Tax
  • SGST/UTGST -State / Union Territory Goods and Services Tax
  • IGST -Integrated Goods and Services Tax(CGST+SGST/UTGST)

According to the modified dual GST model, the tax levied can vary based on the type of transaction.

Within India 

Intrastate:
When a sale takes place within the same state or union territory, both SGST/UTGST and CGST will be levied.

Interstate:
When a sale takes place between two different states or union territories, IGST which is a combination of CGST and SGST will be levied. This is collected by the central government.

The organization address plays a major role in determining the type of GST applied,
The Chargebee system determines the type of GST applied using the customer's region.

  • If the customer's region matches with your organization address, CGST and SGST are applied on the purchase whereas if the customer's region is different from your's, IGST is applied.
  • If you are functional in multiple regions, GSTIN has to be provided for each region that you are active in.If the customer's region falls within one of these regions,CGST and SGST is applied.
  • When the customer is from a region which doesn't fall within any of the regions that you operate in, IGST is applied.

Outside India 

IGST is levied only in the case of B2C transactions where the end customer does not have a GST Identification Number(GSTIN).

In certain situations, unregistered entities who do not have a presence in India might be obligated to collect GST and comply with the regulations. In case of a sale made outside India, GST will not be applied as it is considered an export.

Configuring Indian GST 

To configure Indian GST in your Chargebee site, follow these steps:

  1. Click Settings > Configure Chargebee > Business Profile and ensure that your organization address is added and up to date.

  2. Click Settings > Configure Chargebee > Taxes, and click the Enable Tax.

  3. Configuring the price type: You can set up the price type for each currency that you have enabled for your site by navigating to Manage Catalog Price Types in the Taxes page. The price type is set to ‘exclusive' by default. For more information on configuring the price type, refer here.

  4. Configuring tax settings for India: On the Taxes page, click Add Region and select India from the drop-down list. You will be redirected to the page where you can pick a mode of configuration to add the taxes.

  5. You can select from the following options:
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    • Avalara: Contact support  to enable this setting for your site, if you do not have it already. To automate taxation on your invoices, if you have integrated AvaTax for Sales with Chargebee, you can select Avalara. Ensure that you add the HSN(India Harmonized System of Nomenclature) Codes for all your plans and addons before selecting Avalara as your preferred mode. The appropriate tax rate gets applied for subscription invoices based on the associated plan or addon's HSN code. In the absence of an HSN code, Avalara applies the default tax rate of 18% on the invoices.
    • Manual: Select this option to add your preferred tax rates manually.
    • Configure GST: Select this option and in the pop-up window that appears, you can set the default CGST, SGST/UTGST rates for all states and union territories.

  6. Adding default GST rates: Click Add GST Rate and a pop-up window appears where you can set the default CGST, SGST/UTGST rates for all states and union territories.

  7. Additional Cess: The percentage of additional Cess is optional and it is applied only on specific products.

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  8. Adding state tax rates: You can add individual state tax rates by navigating to Add state tax.

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    There are two scenarios when this feature is used,

    • Scenario 1: When you have a physical presence in multiple states in India. If you have a business presence in 5 different states, you will have to register for GST at all the 5 states which leads to having multiple GSTIN. Using Add state tax option in the Configure GST page, you can add GSTIN separately for each state.
    • Scenario 2: When a particular product's SGST and CGST percentage varies from the default tax rates and you have to override it.

Let's consider the tax rate of product A to be 18%(CGST-10%, SGST-8%)across all the states in India, you can set the default SGST and CGST rates which will be used to tax the purchase of the product.

For instance, if product A has a niche market in the state of X where it is manufactured in huge quantities, the state government might demand a higher tax rate which will lead to a significant change in the SGST and CGST perecentages.You can select Override default tax rates to override the default tax rates.

Now alongside the default tax rates, state wise CGST and SGST rates are also displayed.

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Note

Tax will not be applied if the customer's billing/shipping address does not have ‘State' mentioned.

GST Invoices 

Once GST configuration is completed, the GSTIN field appears in the customer's billing info while creating a new subscription.

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The GST applied, appears as one of the line items in the invoice as shown below:-

Intrastate:

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Interstate:

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