Recently the Indian government introduced GST tax in the market to replace all those different taxes and bunch them together under a single tax class. This tax is popularly known as GST – Goods and Services Tax, “One Nation One Tax”. It’s a common indirect tax for the whole nation applied right from the manufacturer to the consumer to make India a unified market. A robust and comprehensive IT system would be required to implement GST regime in India. Whole Ecommerce community is in a race to quick implement the tax rule to streamline with this new GST tax.
When it comes to Ecommerce, how can Magento be behind in this race to the win? As per the Magento, considering its popularity and usability in market, more than 250000 stores run on this platform. Being the ruling Magento developers, we have come with the easy guide to create GST tax rule in Magento to quick start implementing GST to your Magento products and services.
Let’s learn to create GST tax rule in Magento
- First of all, create a new product tax class to easily identify while applying GST tax to the products. Go to Sales > Tax > Product Tax Classes and click on “Add New”. Name your tax class as GST to easily identify it while applying tax rules to products.
- Create tax rates for both SGST and CGST. Indian goods and services have been classified under 4 tax rates, those are 5%, 12%, 18% and 28%. Take a look at tax rates to find your products fall under which category. Here, we are implementing the tax rule on one of the clients selling fish & meats and thus their products fall under GST rates of 5% and thus we need to create SGST and CGST tax rules for 5%.
Go to Sales > Tax > Manage Tax Zones & Rates and click to Add New Tax Rate, and create tax rates for both CGST and SGST.
Know that CGST and SGST are equally divided to half of the amount of tax rate. As per the rule declaration, store owners and sellers also need to bifurcate CGST and SGST taxes separately in the order details and invoices. So if the tax rate is 5%, you need to create SGST with 2.5% and CGST with 2.5% tax rates to show them separately in invoice.
To bifurcate GST taxes to show separately in all the order related documents, go to app\design\frontend\base\default\template\tax\order\tax.phtml,
Find below code:12<!--?php if ($isFirst): ?-->getValueProperties()?> rowspan=" 1 <!--?php echo count($rates); ?-->"><!--?php echo $_order->formatPrice($amount); ?-->
Copy the whole file and paste at app\design\frontend\[theme_package]\template\tax\order And replace code as shown below:12<!--?php //if ($isFirst): ?-->getValueProperties()?> rowspan=" 1 <!--?php //echo count($rates); ?-->"><!--?php echo $_order->formatPrice($amount / ($percent/(float)$rate['percent']) ); ?-->
Now go to System -> Sales -> Tax -> Shopping Cart Display Setting and set Yes to Display Full Tax Summary.
- Create new tax rules from Sales > Tax > Manage Tax Rules. Click on Create New and set each options as shown below.
Once you create and save both the rules, you can see them enlisted.
- Now once you have created and saved GST tax rates and rules, you need to assign the tax class to your products. Here, we have only created tax rates for 5% but if you have wide range of products those fall under various tax rates, you need to create rates and rules for all and assign the related class to the products.
- So we are done with creating GST tax rules in Magento and once it’s assigned to the products, you can see the detailed tax charges with the bifurcation of SGST and CGST taxes in cart, checkout, invoice, credit memo, shipment, my account order view and Emails.
Understanding GST and creating tax rules in Magento is not rocket science but proper implementation can only lead to exact rules implementation and tax assignments. Above, I have tried to properly elaborate rules configuration along with the government terms and norms. Still if you have any questions or confusions regarding creating GST tax rules in Magento, don’t hesitate to contact me through commenting, I’ll be happy to help.