GST 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 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%.
GST can be classified into the following types:
According to the modified dual GST model, the tax levied can vary based on the type of transaction.
When a sale takes place within the same state or union territory, both SGST/UTGST and CGST will be levied.
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.
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.
When an existing tax model is revised by the government, the corresponding changes are to be updated in the system by midnight so that the old tax model does not affect the future transactions. The Schedule Tax feature automates this process which saves all that manual effort.
If you have already configured tax for India and want to schedule a date from which the existing tax model will expire, navigate to Schedule Tax option in the ‘Tax configuration' page.
You can then proceed to configuring the GST settings which will be implemented once the existing tax model expires.
Step 1: Update Organization Address
To configure taxes in Chargebee, the initial step is to update your organization address which can be done by navigating to Settings > Configure Chargebee > Business Profile
Step 2: Enable Tax
Navigate to Settings > Configure Chargebee > Taxes and click the Enable Tax option.
Step 3: Configure 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 .
Step 4:Configure tax settings for India
Navigate to Settings > Configure Chargebee > Taxes > Add Region and select India from the drop-down list.
Step 5:Configure GST settings
You will be redirected to the page where you can pick a mode of configuration to add the taxes.Select Configure GST.
Step 6: ADD 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.
The percentage of additional Cess is optional and it is applied only on specific products.
Step 7:Add state tax rates
You can add individual state tax rates by navigating to Add state tax.
There are two scenarios when this feature is used,
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.
When a particular product's SGST and CGST percentage varies from the default tax rates and you have to override it.
Tax will not be applied if the customer's billing/shipping address does not have ‘State' mentioned.
Once GST configuration is completed, the GSTIN field appears in the customer's billing info while creating a new subscription.
The GST applied, appears as one of the line items in the invoice as shown below:-