GST for Shopify Store India: Invoices and Returns, Step by Step

A Shopify or WooCommerce store makes you a direct seller for GST. You need a GSTIN before your first sale to another State, you issue every tax invoice yourself, and you report the store's sales in GSTR-1 by State and rate. No marketplace collects TCS or files anything for you, so nothing is reported unless you report it.

First, why is your own store different?

On Amazon or Flipkart, the marketplace raises the invoice in your name, holds back TCS (tax collected at source) and gives you a ready tax report. On your own website, Shopify or WooCommerce only provides the software. The buyer pays you through your payment gateway. So the invoice, the tax rates, the records and the return are all yours. If you are still picking a platform, our Shopify vs WooCommerce comparison covers the costs.

Is that harder? A little at the start. Once the settings are right, the monthly work is an export and an afternoon.

Setting up your store for GST, step by step

1. Get your GSTIN first. A website reaches the whole country, and the first order from another State makes registration compulsory under section 24(i). The route that lets some small sellers sell on marketplaces with only an enrolment number does not cover your own site.
2. Set tax rates by product. Shopify's India guide says its default rates must be reviewed, because GST depends on the product. It asks you to enter the combined CGST and SGST rate as one figure for sales inside your State, since it cannot show two tax lines. On WooCommerce you set rates in its tax settings or through a plugin.
3. Add HSN codes. HSN is the product classification code. Shopify suggests the "HS tariff code" field in each product's shipping section, which needs at least 6 digits.
4. Decide if prices include GST. Most Indian stores show tax-inclusive prices. Then a Rs 1,180 price at 18% is Rs 1,000 of value and Rs 180 of tax. Make sure your invoices and reports split it that way.
5. Install an invoicing app that prints your GSTIN, a running invoice number series, the date, the buyer's name and State, HSN, taxable value, rate and the tax split. Keep one series for the store so your documents-issued count is clean.
6. Collect the buyer's GSTIN at checkout if you sell to businesses, so their invoices can go in your B2B table.

What goes where in your return

Then GSTR-3B pays the tax. The gateway's fee invoice, and the GST charged on it, is a purchase. Where it carries your GSTIN, that GST may be claimable as input tax credit.

A worked example

Meera sells handmade lamps from Jaipur on Shopify, with prices including GST. All items are taken at 18% for this example. Here is one month, after one Maharashtra return of Rs 5,000.

Buyers paid Meera Rs 3,12,700 in all. Her gateway settled a little less, after its fee. That settlement is not her sales figure. Her sales are the invoices above.

The mistake people usually make

The costly one is treating tax-inclusive prices as taxable value. If Meera took Rs 3,12,700 as her taxable sales and added 18% on top, she would pay Rs 56,286 instead of Rs 47,700. That is Rs 8,586 too much in one month, and it is not easy to get back.

The second is reporting the bank settlement instead of invoices. Gateway fees, refunds and cash on delivery remittances all land on different days, so the bank never matches the month's sales. Work from the order and refund export, then reconcile to the bank. Our guide to payment reconciliation shows how.

The third is leaving Shopify's default rates in place. A product taxed at 5% charged at 18% upsets buyers. The reverse leaves you paying the gap yourself.

When to do it yourself

With one State of business, a few hundred orders and one rate, a monthly export and a careful hour is enough. Once you sell on marketplaces too, have B2B buyers or several rates, a Tax Expert is worth the fee. AprilTax's GSTR-1 and GSTR-3B filing is Rs 499 a month, or Rs 1,399 a quarter for quarterly filers.

Frequently asked questions

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