To set up GST on an Indian Shopify store you need four things: a GST registration (compulsory if you ship to other states), the right rate for each product under the GST 2.0 slabs, Shopify’s tax settings configured so in-state orders carry CGST plus SGST and out-of-state orders carry IGST, and a separate app for GST-compliant invoices, because Shopify does not produce them. This guide walks through each, including the part most stores get wrong since September 2025: rates that depend on the price of the item.
1. Registration: you probably need it from day one
The usual turnover threshold does not help most online stores. Section 24(i) of the CGST Act makes registration compulsory for anyone making inter-state taxable supplies of goods, whatever the turnover. If your Shopify store ships from Jaipur to a customer in Pune, that is an inter-state supply, so you need a GSTIN before the first such order.
The small-seller relief introduced from 1 October 2023 (Notification 34/2023) does not change this. It applies to suppliers selling through an e-commerce operator within a single state, below the threshold, with no inter-state supplies.
One relief that does apply: Section 52 tax collected at source is a marketplace obligation. When you sell your own goods on your own Shopify store, Shopify is not collecting consideration on behalf of other suppliers, so there is no TCS on those sales. If you also sell on Amazon, Flipkart or Myntra, those orders carry TCS and are reported differently.
2. Rates after GST 2.0
From 22 September 2025 the rate structure was rebuilt around two main slabs, 5% and 18%, with a 40% rate for a short list of demerit goods, alongside the existing nil and special rates. For many D2C categories the change was a cut. For two of the biggest Shopify categories it introduced a price test:
| Category | Rate | Test |
|---|---|---|
| Apparel and clothing accessories | 5% | Sale value up to ₹2,500 per piece |
| Apparel and clothing accessories | 18% | Sale value above ₹2,500 per piece |
| Footwear | 5% | Sale value up to ₹2,500 per pair |
| Footwear | 18% | Sale value above ₹2,500 per pair |
The test is per piece or per pair, not per order. A ₹1,800 kurta and a ₹3,200 saree in the same cart are taxed at different rates on the same invoice. Check your own HSN and rate against the notifications for anything outside apparel and footwear; we are not listing every category here.
3. How Shopify actually charges GST
Shopify’s own India GST guidance is the place to start, and three of its points shape everything else:
- One tax line, not two. Shopify cannot show CGST and SGST as separate lines on an order. For in-state orders you configure it to charge the sum of the two.
- Defaults are placeholders. A new Indian store starts with a country tax of 9% labelled CGST, every state except Karnataka set to 18% IGST “instead of” the country tax, and Karnataka set to 9% SGST “added to” it. Shopify says plainly that these are a starting point, not your rates.
- Different rates need collection overrides. Shopify cannot know each product’s rate. You create hidden collections for each tax category and override the rate for each collection.
A worked setup for an 18% business in Maharashtra
- Set the country tax to 9% (this is the CGST half).
- For Maharashtra, set the state tax to 9%, name it SGST, behaviour “added to” the country tax. In-state orders now carry 18%, split 9% and 9% in your books.
- For every other state, set 18%, name it IGST, behaviour “instead of” the country tax.
- Correct Karnataka, which starts with SGST “added to”: change it to IGST 18% “instead of”.
- Turn on “All prices include tax” if you show tax-inclusive prices, which almost every Indian B2C store should.
- Place test orders to an address in your state and one outside it, and check the tax on each.
Handling the ₹2,500 test
Shopify has no price-based tax rule, so the threshold has to be handled through collections. Create two hidden collections, for example “GST 5% apparel” and “GST 18% apparel”, override their rates, and put each product in the right one based on its selling price. Three things break this if you are not careful:
- Variants that straddle the line. If one size sells at ₹2,400 and another at ₹2,700, a product-level collection cannot hold both rates. Split them into separate products, or price them on the same side of the threshold.
- Sales and discounts. A ₹2,800 saree on a 15% sale sells at ₹2,380. Review collection membership whenever prices change, and agree with your adviser how invoice-level discounts are treated.
- Automation. With a large catalogue, a small script or Shopify Flow rule that reassigns products by price is safer than doing it by hand.
4. Invoices: Shopify does not make GST-compliant bills
This catches many first-time sellers. Shopify’s help centre states that it does not create a GST-compliant bill; you need a GST invoicing app or a local invoicing service. Whatever you use, check that each invoice carries your GSTIN, a consecutive invoice number, the place of supply with state name for inter-state orders, the rate and tax amount split correctly, and HSN codes where required.
On HSN, Notification 78/2020 sets the floor by the previous year’s aggregate turnover: above ₹5 crore, at least six digits on every invoice; up to ₹5 crore, at least four digits on B2B invoices, with B2C invoices exempt from the requirement. Many stores print HSN on every invoice anyway because it makes the HSN summary in GSTR-1 easier.
5. The details that cause notices
- Shipping charges. Delivery billed together with the goods is generally treated as part of a composite supply and taxed at the rate of the goods, not as a separate service. Set Shopify to charge tax on shipping, and with mixed-rate carts agree the method with your adviser.
- Returns and refunds. A refund after the invoice is issued needs a credit note, and the tax reversal has to follow it into your return.
- E-invoicing. Applies to B2B and export invoices once aggregate turnover crosses ₹5 crore. Ordinary B2C invoices are outside it.
- E-way bills. Required for consignments above ₹50,000, subject to the exceptions in the rules. Most couriers generate them, but the obligation is yours.
- GSTR-1 reporting. Inter-state invoices to unregistered buyers above ₹1 lakh go in B2C Large (the threshold fell from ₹2.5 lakh on 1 August 2024). Everything else to consumers goes in B2C Small, by state and rate.
Shopify collects the tax. Your books, your invoices and your return still have to agree with it.
6. Getting from Shopify orders to a filed return
The orders report in Shopify does not map neatly to GSTR-1: it mixes payment gateways, discounts, refunds and shipping in ways your return does not. The reliable route is to post every order and refund into your accounting system as a proper voucher, with tax split by place of supply, and file from there. We explain that process step by step in Shopify to Tally Prime, and our own app, LedgerBridge, does it automatically for Tally Prime and Razorpay.
Want your GST setup checked?
Send us your store URL. We check the tax settings, collection overrides, invoices and shipping tax, and tell you what to fix.
Get a GST setup reviewFrequently asked questions
Does Shopify calculate GST automatically in India?
Only once you configure it. Shopify applies the rates you set: a country rate, state-level rules for CGST plus SGST in your home state and IGST elsewhere, and overrides by collection for different product rates. Its defaults are placeholders.
Can Shopify show CGST and SGST separately?
Not on the order itself. Shopify charges a single tax line, so in-state orders show the combined amount. Your GST invoicing app and your accounting entries split it into CGST and SGST.
Is Shopify Payments available in India?
No. India is not on Shopify’s list of supported countries for Shopify Payments, so Indian stores use a third-party gateway such as Razorpay, Cashfree or PayU.
Do I need GST registration for a small Shopify store?
If you ship goods to customers in other states, yes, regardless of turnover, because inter-state supply of goods requires compulsory registration under Section 24(i).
Related: Shopify development in India, Shopify to Tally Prime, Shopify SEO checklist.