GST on Shopify: How to Configure Taxes for Indian Stores

A correct Shopify GST setup means telling Shopify how to calculate tax on your orders and giving customers GST-compliant invoices. In practice, you add your GSTIN and business details, set up India tax settings, decide whether prices include tax, assign the right rates to products (often using tax overrides or collections), record HSN codes, and install a GST invoice app. Because GST rules depend on your products and registration, confirm the rates and setup with your chartered accountant (CA).

Important: This guide explains how to configure Shopify. It isn’t tax advice. Your CA should confirm rates, HSN codes and invoicing requirements for your business.

Quick Summary: Executive Takeaways

• Shopify calculates tax at checkout based on your tax settings and any overrides.
• Decide on tax-inclusive pricing; most Indian consumer stores show prices including GST.
• Different products may have different GST rates; use product or collection-level overrides.
• HSN codes belong on invoices; store them per product, for example in metafields.
• Shopify’s default invoices aren’t GST invoices; most stores use a GST invoice app.
• Test orders within your state and to another state to check CGST/SGST vs IGST on invoices.

Introduction: Why GST Setup Matters on Shopify

GST (Goods and Services Tax) is India’s indirect tax on the supply of goods and services, administered through the GST portal. For online sellers, it affects product prices, checkout totals and the invoices you issue.

Intra-state sales (seller and buyer in the same state) typically attract CGST + SGST, while inter-state sales typically attract IGST. Your invoices need to show this correctly.

This guide is written by the Lazapi team, a Shopify development agency with locations in Kozhikode (Kerala), Bangalore and the UAE. On Indian store setups, the most common GST problem we see is a store with every product at one tax rate because nobody set overrides, discovered only when the accountant reconciles the first month’s invoices.

How Shopify Handles Tax for Indian Stores

Shopify calculates tax using region settings and product overrides, and shows it at checkout. Invoicing is usually handled by an app. This table splits what Shopify does and what you add.

Check the latest India tax guidance in the Shopify Help Center, as features change.

Tax-inclusive vs tax-exclusive prices

Tax-inclusive pricing means the price shown already includes GST. Most Indian shoppers expect this, and it avoids surprises at checkout. In Shopify, this is a setting under Settings → Taxes and duties.

Product-level rates

A tax override is a Shopify setting that applies a different tax rate to specific products or collections in a region. If you sell items at different GST rates, group them into collections (for example “GST 5%” and “GST 18%”) and add an override for each.

In practice, the structure looks like this:

Collections (hidden from navigation):
  gst-5    → apparel under your CA's threshold, etc.
  gst-12   → items your CA assigns to 12%
  gst-18   → accessories, etc.
Settings → Taxes and duties → India → Overrides:
  Collection gst-5  → 5%
  Collection gst-12 → 12%
  Collection gst-18 → 18%

The rates above are examples only. Use the rates your CA confirms for your HSN codes, since GST rates can change and sometimes depend on price bands.

HSN codes

An HSN code (Harmonised System of Nomenclature) is a product classification code used on GST invoices. Store it on each product, for example in a metafield custom.hsn_code, so your invoice app can print it.

GST Invoices on Shopify

A GST invoice needs details such as your GSTIN, invoice number, HSN codes, taxable value and tax breakdown. Shopify’s default order emails aren’t designed as GST invoices, so most Indian stores install a GST invoice app from the Shopify App Store.

Edge case: B2B orders. Business buyers may want their GSTIN on the invoice to claim input tax credit. Add a GSTIN field at checkout or cart using an app or cart attribute, and make sure the invoice app reads it.

Selling Abroad and to Other States

Your GST setup also needs to handle orders outside your home state and, if you export, outside India.

Place of supply is the location that decides which GST applies to a sale, generally based on where goods are delivered for online orders. Your invoice app should use the shipping address to decide between CGST + SGST and IGST.

In practice, we set up a test order to a different state on every Indian launch and compare the invoice with the CA’s expected output before going live.

Edge case: if you sell internationally with Shopify Markets, prices and taxes in other countries follow their own rules, such as VAT in the UK or UAE. Check Shopify’s duties and import tax settings and local advice for each market.

Step-by-Step Shopify GST Setup

1. Confirm rates and HSN codes for each product type with your CA.
2. Add business details in Settings → Store details, including your registered address.
3. Turn on tax-inclusive pricing if you show prices including GST.
4. Set up India in Taxes and duties with your default rate.
5. Create hidden collections for each GST rate and assign products.
6. Add tax overrides for each collection.
7. Add an HSN code metafield and fill it for every product.
8. Install a GST invoice app and enter your GSTIN and invoice series.
9. Add a B2B GSTIN field if you sell to businesses.
10. Place test orders to your own state and another state, and check invoices with your CA.

Common Pitfalls and Mistakes to Avoid

• One rate for everything when products fall under different rates.
• Prices entered without tax while the store is set to tax-inclusive, or the reverse.
• Missing HSN codes on invoices.
• Using order confirmation emails as invoices.
• No CA review before launch.
• Forgetting shipping tax treatment; ask your CA how shipping charges should be taxed.

FAQ

Does Shopify calculate GST automatically?

Shopify calculates tax at checkout based on your tax settings and overrides. You need to set the correct rates for your products; Shopify doesn’t know your HSN codes or which rate applies.

How do I generate GST invoices on Shopify?

Most Indian stores use a GST invoice app from the Shopify App Store. It adds your GSTIN, invoice numbers, HSN codes and the CGST/SGST or IGST split.

Should Shopify prices include GST?

Most Indian consumer stores show prices including GST, which customers expect. Turn on tax-inclusive pricing in Shopify’s tax settings and enter prices including tax.

Do I need a GSTIN to sell on Shopify in India?

It depends on your turnover, what you sell and how you sell, including interstate and ecommerce rules. Check your obligations with a CA before you start selling.

Do I charge IGST or CGST and SGST on Shopify orders?

It generally depends on the place of supply: same-state sales typically attract CGST and SGST, while other-state sales typically attract IGST. A GST invoice app applies this using the shipping address; confirm the rules with your CA.

Conclusion and Next Steps

A good Shopify GST setup combines correct rates, tax-inclusive pricing, HSN codes and a proper GST invoice app, all checked by your CA before launch.

Next steps:

1. Ask your CA to confirm rates and HSN codes for your catalogue.
2. Read how to set up Shopify shipping in India and Shopify payment gateways in India.
3. Want an India-ready store set up for you? See our Shopify store setup service.