Getting GST right on your Shopify store is one of the most important technical tasks for any Indian ecommerce business. A misconfigured tax setup means incorrect invoices, potential GSTIN compliance notices, and reconciliation nightmares at return filing time. This guide walks through every step — from IGST versus CGST+SGST logic to HSN codes and TCS for marketplace sellers.
IGST vs CGST+SGST: When Each Applies
Indian GST splits into two scenarios based on the buyer and seller’s state of registration. When a seller in Maharashtra sells to a buyer in Delhi, it is an inter-state sale — collect Integrated GST (IGST) at the full rate (e.g., 18% IGST). When a seller in Maharashtra sells to a buyer also in Maharashtra, it is an intra-state sale — collect Central GST (CGST) at half the rate plus State GST (SGST) at the other half (e.g., 9% CGST + 9% SGST = 18% total). Shopify’s automatic tax engine handles this distinction once you configure your seller address and tax registration correctly.
GSTIN Registration and Linking on Shopify
Register for GST on the GST Portal (gstin.gov.in) once your annual turnover exceeds ₹40 lakh (₹20 lakh for service providers, ₹10 lakh for special category states). Once you have your 15-digit GSTIN, go to Shopify Settings → Taxes → India → Tax Registration and enter your GSTIN. This ensures it appears on all Shopify-generated invoices. If you operate from multiple states (multiple GSTINs), Shopify allows you to add multiple registrations and map them to warehouse locations.
Common Ecommerce HSN Codes
| Product Category | HSN Code | GST Rate |
|---|---|---|
| Men’s / Women’s Apparel (over ₹1,000) | 6101–6114 | 12% |
| Footwear (over ₹1,000) | 6401–6405 | 18% |
| Mobile Phones | 8517 | 12% |
| Laptops / Computers | 8471 | 18% |
| Skincare / Cosmetics | 3304 | 18% |
| Books (printed) | 4901 | 0% |
| Packaged Food | 2106 | 18% (branded) |
HSN codes must appear on B2B tax invoices. For B2C invoices under ₹50,000, HSN codes are optional but best practice. Enter the HSN code for each product in Shopify under Products → [Product] → Tax → HSN/SAC code field (available with Indian tax apps like Tera GST or EasyEcom).
Tax-Inclusive Pricing on Shopify
Indian ecommerce convention displays GST-inclusive prices — the buyer sees “₹1,180 (incl. GST)” rather than “₹1,000 + ₹180 GST”. Enable this in Shopify under Settings → Taxes → India → “All prices include tax”. This affects how your product prices are entered — you set the inclusive price, and Shopify back-calculates the tax component. Your invoices will then show the price breakdown automatically.
For a complete Indian Shopify tax setup including GSTIN configuration, HSN mapping, and invoice templating, our Shopify development team handles this end to end.
GST Invoice Generation
Shopify’s native order confirmation email is not a valid GST invoice. For compliant GST invoices, use apps such as Tera GST, GST Invoice Generator, or QuickBooks GST. These generate invoices showing: GSTIN of seller and buyer (for B2B), invoice number, HSN codes, taxable value, CGST/SGST or IGST amounts, and place of supply. This is mandatory for any business that is GST-registered.
TCS for Marketplace Sellers
If you sell through an ecommerce operator (Amazon, Flipkart, Meesho), the platform deducts Tax Collected at Source (TCS) at 1% (0.5% CGST + 0.5% SGST or 1% IGST) before remitting your sales proceeds. This TCS appears in your GSTR-2A and is claimable as credit in your GST return. On your own Shopify store, you are the seller of record — TCS does not apply, but you must still file GSTR-1, GSTR-3B, and GSTR-9 on the standard schedule.
Frequently Asked Questions
What is the GST registration threshold for Shopify sellers in India?
The mandatory threshold is ₹40 lakh in annual aggregate turnover for most goods-based businesses. Service providers and businesses in special category states have lower thresholds of ₹20 lakh and ₹10 lakh respectively. Sellers on ecommerce marketplaces (Amazon, Flipkart) must register regardless of turnover — there is no threshold exemption for marketplace sellers.
How does Shopify handle IGST vs CGST/SGST automatically?
Shopify calculates the correct tax based on your registered seller address and the customer’s shipping address. For inter-state orders, it applies IGST. For intra-state orders, it splits into CGST and SGST. This requires your GSTIN and business address to be correctly entered in Shopify’s tax settings — with a wrong state code, all calculations default incorrectly.
Do I need a separate GST app on Shopify for invoice generation?
Yes. Shopify’s native order emails are not GST-compliant invoices. You need a dedicated GST invoice app such as Tera GST, GST Invoice Generator, or a full accounting integration like Zoho Books or Tally Prime. These generate invoices in the format prescribed by GSTN, including GSTIN, HSN codes, and separate CGST/SGST/IGST line items.
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