The new tax slabs have been released by the government of India under the GST bill. This is a short tutorial to help with adjusting your taxes to the new rates in WooCommerce.
If you have WooCommerce installed you might have added the tax to the price of the product already, i.e. all product prices are inclusive of tax. With the new rates, there are 2 possible options
1. Adjust the new rates within the price itself.
2. Display the GST rates separately
There is a good reason to go with the second option. With the new GSTIN and the need to file and claim returns every month, it would be better for your customers to have an invoice with the tax mentioned specifically. Also it is mandated by the government, so it’s not really an option.
So let’s get started adding GST to some sample products.
This is a demo site. We’ve added two products to the WooCommerce product list. Now we need some information on how much tax this incurs and also the problem of selling online and across state borders.
A side note, selling online is not taxed separately however, you may safely sell within the state without a GST registration as long as your annual turnover does not exceed 20 lakhs.
If you plan on moving your business online, you may have to sell to customers across state borders. To do so will necessarily require a GST registration.
Before adding in the rate we need to know what tax bracket our products come under. We sell clothing at under 500 Rs. To find your rate go to this page on cleartax.in. It has a comprehensive list of products and their respective rates. Head on over to this page and find your product. Once the page is opened hold control key and press F. When a search box opens, type clothing or any other commodity you wish to sell. Click on the link to open the page with details of the HSN code and the tax rate. Any clothing under 1000 Rs has a tax rate of 5% according to the listing.
It says “Articles of apparel and clothing accessories, knitted or crocheted, of sale value not exceeding Rs. 1000 per piece” is 5% GST and 0 Cess. So now that we have the tax rate, we need to add it to WooCommerce so that it will apply automatically and we don’t have to worry about that again.
Head on over to your WordPress login. Once at the dashboard, navigate to the WooCommerce settings.
There are multiple tabs at the top. If the “Tax” tab is not displayed scroll down till you find a checkbox saying “Enable tax and tax calculations”. The save button is at the bottom of the page.
Once the settings have been saved, the page will update to show the Tax tab at the top.
On clicking the Tax tab you will be presented with a few options. If you wish to include GST within the price then make sure you choose the “inclusive” option. If not, then choose the “exclusive” option. We suggest exclusive because it mentions clearly the amount of GST that will be incurred.
Next decision is whether the tax should be calculated based on the customers shipping address or billing address. We suggest billing address would be the ideal option. Don’t forget to save.
After saving, click on standard rates just below the tabs. This page is the source for all the rates of your products. Whatever is added here is automatically tabulated in the final bill. It is based on the Code and the tax rate assigned when adding the product to the store.
Now that we have our tax rate lets begin adding it into Woocommerce. We have made it simple by creating a .csv file to upload. Download the file from here and open it in MS Excel or LibreOffice Calc.
The second column contains the codes for the states of India. The default here is Karnataka. If you take a look at the first two rows it is apparent that the 5% tax has been divided into 2.5% each under the head CGST and SGST. To transact within a state the tax is divided evenly between the central and state government, or CGST and SGST respectively. For transactions outside state borders, we need to apply IGST or Integrated GST. Here the full 5% tax is applied. If any change of state is required make sure to change the first two rows of your spreadsheet. Also, make sure to apply the correct priorities as given. Further, you must compound CGST and SGST so that they apply together wherever applicable. Do this by typing 1 in the compound column for CGST and SGST only. IGST is compounded by default and the value should be left at 0. Double check to make sure everything is as it should be and save.
Head on back the website. In the Tax > Standard rates page click on import CSV. You will be presented with an “upload document” page. Click on “choose a file on your computer”, navigate to the .csv just edited in a spreadsheet and click open. Finally, click on “Upload file and Import”. Once the upload is complete view the standard rates to check if everything made it across.
To verify that the changes have been made, go to your store and add any product to the cart. On opening the cart check to see if the taxes are displayed appropriately. And you’re done!
If you have any problems or queries drop a comment in the comment section below. We hope this tutorial was helpful. Good luck for your business!