GST - Ready Features in Zoho Invoice
This section will give you a brief overview about the Goods and Services Tax (GST) and the GST features that are available in Zoho Invoice.
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GST Overview
Zoho Invoice lets you create and apply taxes to your transactions and stay tax compliant. In India, it is mandatory for businesses with a turnover of more than 20 lakhs per annum to be registered for GST. This section helps you configure your tax settings and keep track of all the taxes to be paid in your business.
Components of GST
GST follows a dual component structure: SGST (the state component of GST) and CGST (the central component of GST), both of which will be levied during intrastate movement of goods.
During interstate transfer of goods, a combined tax called the IGST - Integrated GST (SGST+CGST) will be applied by the central government.
Four-Tier GST Tax Structure
The new GST tax structure will have four slabs:
- Zero rate - 0%
- Lower rate - 5%
- Standard rates - 12% and 18%
- Higher rate - 28%
An additional tax called the Additional cess will be applied on tobacco, luxury cars, pan, and aerated drinks.
GST Settings
If your business has been registered for GST, you can configure your taxes in Zoho Invoice. These taxes will be included while you create a transaction, generate tax reports, and so on. You would have been prompted to enter your tax details when you first set up the organisation. If you had skipped it, or if you would like to edit tax settings, here’s how you can do it:
- Go to Settings and select Taxes.
- In the Taxes pane, select GST Settings.
- Slide the toggle next to Is your business registered for GST?.
- Enter you 15 digit GSTIN and click Get GSTIN Details to view the details of your tax registration, previous returns filed, and so on.
Insight: The Goods and Services Tax Identification Number (GSTIN), is a unique 15 digit identification number issued by the tax department upon successful registration of GST.
- Enter the business' name and the date of GST registration.
- Mark My business is registered for Composition Scheme if you are a composition dealer and select your Composition Scheme Percentage.
Insight: Business owners whose aggregate turnover is less than Rs. 1.5 crore (less than 75 Lakhs for North-Eastern states) can register under the composition scheme. They cannot claim Input Tax Credits of supply GST exempted goods.
- Mark Enable Reverse Charge in Sales transactions if your customer is liable to pay the taxes for certain transactions.
- Mark the box near SEZ Registration if your business registered under this GSTIN is located in a Special Economic Zone (SEZ).
- Mark Track sale of digital services to overseas customers to record and track the digital services (such as software or cloud services) that your organisation offers.
Insight: While creating items, enable the It is a digital service option to classify it as a digital service. You can create a new tax rate for it and the transactions will reflect in the Overseas Digital Tax Summary report. If a sales transaction contains a digital service along with goods, it will be treated as a service associated with the goods. In this case, only IGST 0 can be applied as the tax rate.
- Click Save.
This will update your tax settings that will reflect in your transactions, reports and returns. If would like to file your GST from Zoho Invoice, you will have to enable online filing.
Online Filing Settings
Zoho Invoice lets you to connect your organisation with the GSTN to file your returns directly or push your data to the portal and file your returns. For this, you will have to enable online filing in Zoho Invoice. Here’s how:
- Go to Settings and select Taxes.
- In the Taxes pane, select Online Filing Settings.
- Enter your GSTN Username as issued to you by the GSTN.
- Select your Reporting Period. This can either be quarterly or monthly.
- Select the month from which you would like to generate returns in Zoho Invoice under Generate First Tax Return From.
- Enable approval process for filing GST Returns if you would like the users to submit returns to the admins before submitting the returns to the GST portal.
- Select the approvers if you had enabled GST return approvals.
- Click Save.
Default Tax Preference
Based on the goods and services you deal with, you will be able to select the default tax rate that’s applicable for your business. You will be able to manually update the tax rate for each item in its creation page or this tax rate will be applicable. To set this:
- Go to Settings and select Taxes.
- In the Taxes pane, select Default Tax Preference.
- Select the Intra State Tax Rate and Inter State Tax Rate.
- Click Save.
Tax Rates
In this section, you can create the tax rates that are applicable for your business based on the goods and services your business deals with.
Create Tax Rates (#create-tax)
If you have registered for GST, default tax rates will be created for you already. If you would like to create a new tax rate:
- Go to Settings and select Taxes.
- In the Taxes pane, select Tax Rates.
- Click + New Tax in the top-right corner and in the popup that appears:
- Enter the Tax Name and Rate%.
- Select the Tax Type.
- Click Save.
You can create a tax rate for digital services by marking This tax will be applicable only on digital services for overseas customers in the pop-up. You will have to enter the required tax rates and select the country to which you’re trading.
Create Tax Groups
You can group more than two taxes together and apply it on your transactions. Let’s say you have to charge your customers a newly introduced cess rate, you can then create a tax group with your regular tax rate and the cess to apply them on your invoices.
The same is the case for your regular GST tax rates, the rate 18% is tax group of 9% CGST and 9% SGST which is available by default for you.
To create a new tax group:
- Go to Settings and select Taxes.
- In the Taxes pane, select Tax Rates.
- Click the dropdown next to + New Tax and select + New Tax Group.
- Enter a Tax Group Name.
- Select the taxes you want to associate with this tax group.
- Click Save.
Edit/Delete Tax Rates
To edit or delete a tax rate:
- Go to Settings and select Taxes.
- In the Taxes pane, select Tax Rates.
- Hover over the existing tax rates.
- Click the Trash icon to delete a tax rate or click Edit to update any details. Select the transactions in which the updated tax rates have to be applied in the popup.
Warning: Editing the tax rates will update them in active recurring profiles you had created as well.
- Click Save.
Tax Exemptions
Some goods and services under the GST regime are exempted from tax. Businesses will also not be able to claim ITC on their sales. You can create tax exemptions in Zoho Invoice and apply them to items while creating invoices. Here’s how:
- Go to Settings and select Taxes.
- In the Taxes pane, select Tax Exemptions.
- Click + New Tax Exemption in the top right corner.
- Enter the reason for exemption, provide a description and select the type.
- Click Save.
Adding GSTIN to Customers
You can enter the GSTIN of your customers in the customer creation page.
Here’s how to add GSTIN to your customers:
- Go to Customers.
- Click + New at the top right corner.
- Select a GST Treatment under Other Details.
- Enter your customer’s GST number in GSTIN / UIN.
- If you have not entered a shipping address for a customer, billing address will be taken as the default state. If there’s no address associated to the customer, it will be considered as an intra state transaction(i.e transaction within the same state as your organisation).
Items
You will need to classify all your items as Goods or Services before entering the SAC and HSN code for those items.
To add SAC or HSN,
- Go to Items.
- Click + New at the top-right corner.
- Enter the SAC code for services and the HSN code for goods.