## Zoho Billing - Product, solutions, integrations, support, and resources Index

Access the complete documentation index at:
https://www.zoho.com/in/billing/llms.txt

Use this file to discover all available documentation pages before proceeding.

# GST in India

Zoho Billing 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. 

**Note:** This document is applicable only for the India Edition of Zoho Billing.

**Note:** The Government of India has revised the GST structure, effective September 22, 2025. To help you comply with the revised tax rates, Zoho Billing is ready to support the new tax rates for your items based on their HSN code.

## Update to GST 2.0 Rates in Zoho Billing

Zoho Billing makes it easy to switch to the new GST rates. You can review the new tax rates for all items based on their HSN Codes, Composite Items, and any subscriptions. Once reviewed, you can schedule the update. Zoho Billing will then apply the new GST rates across all transactions. To review and update:

*   Go to your Zoho Billing organisation’s Home page.
*   Click **View Details** from the _GST Slab Update_ banner.
*   Click **Review Updates** to apply the new tax rates automatically.
*   Review the tax changes and click **Proceed** to Schedule Update.
*   If your organisation has more than 250 items, the preview will not be available.
*   You can download the Tax Update file from the generated link to view the new tax rates for all items, along with their HSN Codes, Composite Items, and Subscriptions.
*   Once you have reviewed the items and tax rates, click **Schedule Update Now**.

**Note:** If you create a transaction dated before the scheduled update, the new tax rate will be applied by default. You can manually change the tax rate from the item’s _Edit_ page if needed.

Alternatively, you can update the new tax rates manually. To do so, [export](/in/billing/help/product-catalog/items/manage-items.html#export-items) all your items, composite items, and subscriptions, update the new tax rates in a spreadsheet, and re-import the updated files into Zoho Billing.

### What Happens After GST Rates Are Updated

Once the new GST rates are updated:

*   The **Tax Rates** under _Taxes_ in _Settings_ will display both the old and new tax rates.
*   Items will be updated with new tax rates based on their selected HSN Code. For items without an HSN Code, you must update the new tax rates manually.
*   Any transaction created after the update will have the new tax rate set as the default. You can still manually change the tax rate from the transaction’s _Edit_ page if needed.

## GST Settings

If your business has been registered for GST, you can configure your taxes in Zoho Billing. These taxes will be included while you create a transaction, generate tax reports and so on. You might 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 your settings, here’s how you can do it:

*   Go to _Settings_.
*   Select **Taxes** under _Taxes & Compliance_ in the _Organization Settings_ pane.
*   In the _Taxes_ pane, select **GST Settings**. 
*   Select **Yes** for the option **Is your business registered for GST?**.
*   Enter your 15 digit **GSTIN** and enter the date of GST registration. 
*   Click **Get Taxpayer 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.

*   Select your business registration type in the **Registration Type** dropdown.
*   If you are registered under _Composition Scheme_, select the GST rate from the _Composition Scheme Percentage_ field.

**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.

*   Enter your business legal name and trade name.
*   Mark **Enable reverse charge in sales transactions** if your customer is liable to pay the taxes for certain transactions. 
*   Mark **My business is involved in SEZ/Overseas Trading** if you import or export goods and deal with supplies to SEZs. Enabling this option helps you to create Bills of Supply and Shipping Bills. 
*   Select the **Custom Duty Tracking Account** from the dropdown.
*   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.

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## Enable GST for Locations Enabled Organizations

If you have enabled locations in your organization and want to enable GST, it is mandatory to associate a GSTIN with every active location.

**Note:** If you don’t want to associate a GSTIN with a location, you can [mark it as inactive](/in/billing/help/settings/locations/other-actions-locations/#deletemark-location-as-inactive) and activate it later if needed.

To associate GSTIN for your active locations and enable GST:

*   Go to _Settings_.
*   Select **Taxes** under _Taxes and Compliance_ in the _Organization Settings_ pane.
*   Navigate to _GST Settings_ and slide the toggle next to the _Is your business registered for GST?_ option.
*   Read the details in the _Associate active locations with GSTINs to enable GST in Zoho Billing_ pop-up that appears, and then click **Continue**.
*   Click **Add New GSTIN and Associate Locations**. In the _New GSTIN_ pop-up,
    *   Enter the **GSTIN** for the location.
    *   Enter all the other necessary details.
    *   In the _Associated Locations_ field, select the locations you want to link to the GSTIN. Note that the dropdown will display locations based on the state code, which is derived from the first two digits of the GSTIN you enter.
    *   Click **Add**.

Similarly, add a GSTIN for each of your locations. You can view the locations that are not associated with GSTIN, by clicking **View Unassociated Locations** in the _GST Settings_ page.

*   Click **Save** once you’re done.
*   Click **Enable GST** in the confirmation popup that appears.

GST will now be enabled for your organization.

**Note:** If you wish to change the GSTIN associated with a location, go to _Settings > Organization > Locations_. Click the dropdown next to the desired location and select _Edit_, enter the new _GSTIN_ and click **Save**.

### Associate GSTIN and Mark a Location as Active

If you’ve previously marked a location as inactive and now want to activate it and associate a GSTIN with it, you must first associate the GSTIN with the location, and then mark the location as active. Here’s how:

*   Go to _Settings_.
*   Select **Locations** under _Organization_ in the _Organization Settings_ pane.
*   In the _Locations_ page, click **Associate GSTIN** next to the location you want to update.
*   In the _Associate GSTIN_ popup that appears, select one of the following options in the _Associate Type_ field.
*   To add new GSTIN and associate it with a locations,
    *   Select **Add New GSTIN & Associate**.
    *   Enter the GSTIN and all the other necessary information.
    *   Click **Save**.
*   To associate an existing GSTIN,
    *   Select **Associate Existing GSTIN**.
    *   Click the _GSTIN_ dropdown and select a GSTIN.
    *   Click **Save**.

The GSTIN will be associated with the location.

After associating GSTIN with the location, you can mark the location as active. To do this:

*   Click the dropdown next to the location, and select **Mark as Active**.

The location will be marked as active.

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## Manage Additional GSTINs

If your business is eligible for multiple GSTINs, you can associate an additional GSTIN with a customer’s new address and track the taxes in your transactions accordingly. To associate GSTIN:

*   Go to **Customers**.
*   Select the customer for whom you want include the additional GSTIN.
*   Click **Add Additional Address** in the _Overview_ tab and enter the required details.
*   In the _Tax Information_ dropdown, select **Manage Tax Informations** to add or select the GSTIN that must be associated with this address.
*   In the popup that appears, click **Add New Tax Information**.
*   Enter the **GSTIN/UIN** and the _Place of Supply_ will be automatically populated by Zoho Billing.
*   Save the tax information and it will be associated with the additional address.

Each time you choose an address while creating a transaction, the corresponding GSTIN will be used.

**Insight:** The Tax Information (GSTIN and Place of Supply) associated with the address while creating the contact will be considered as the primary tax information.

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## Default Tax Preference

Based on the goods and services you deal with, you can select the default tax rate applicable to your business. You can also manually update the tax rate for each item on its creation page, or the default tax rate will be applied. To do this:

*   Go to _Settings_.
*   Select _Taxes_ under **Taxes & Compliance** in the _Organization Settings_ pane.
*   In the _Taxes_ pane, select the GSTIN for which you want to set a default tax rate.
*   Navigate to the **Default Tax Preference** tab.
*   Select the default **Intra State Tax Rate** and **Inter State Tax Rate** applicable to your business.
*   Click **Save**.

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## Tax Rates

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

If you are registered for GST, default tax rates will already be created for you. If you would like to create new tax rates:

*   Go to _Settings_.
*   Select **Taxes** under _Taxes & Compliance_ in the _Organization Settings_ pane.
*   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**.
*   Check the option, **This tax will be applicable only on digital services for overseas customers** to create a tax rate for digital services and select the **Country/Region** you are trading with.

### Create Tax Groups

You can group two or more taxes together and apply them to your transactions. For example, if you need to charge your customers a newly introduced cess in addition to your regular tax rate, you can create a tax group that combines both and apply it to your invoices. Similarly, the standard GST rate of 18% is available by default as a tax group, which combines 9% CGST and 9% SGST.

To create a new tax group:

*   Go to _Settings_.
*   Select **Taxes** under _Taxes & Compliance_ in the _Organization Settings_ pane.
*   In the _Taxes_ pane, select **Tax Rates**.
*   Click the dropdown next to _\+ New Tax_ and select **New Tax Group**.
*   In the _New Tax_ Group pop-up:
    *   Enter a **Tax Group Name**.
    *   Select the taxes you want to associate with this tax group.
    *   Click **Save**.

### Edit Tax Rates

To edit a tax rate:

*   Go to _Settings_.
*   Select **Taxes** under _Taxes & Compliance_ in the _Organization Settings_ pane.
*   In the _Taxes_ pane, select **Tax Rates**.
*   Hover over the existing tax rate that you want to edit.
*   Click the dropdown that appears next to the tax rate and select **Edit** to update any details.
*   Enter the necessary details and click **Save**.

**Warning:** Editing the tax rates will also update them in all the active subscriptions you have created.

The tax rate will be updated.

### Delete Tax Rate

To delete a tax rate:

*   Go to _Settings_.
*   Select **Taxes** under _Taxes & Compliance_ in the _Organization Settings_ pane.
*   In the _Taxes_ pane, select **Tax Rates**.
*   Hover over the existing tax rate that you want to delete.
*   Click the dropdown that appears next to the tax rate and select **Delete**.
*   Click **OK** in the popup that appears.

**Warning:** Editing the tax rates will also update them in all the active subscriptions you have created.

The tax rate will be deleted.

### Mark a Tax Rate as Inactive

To mark a tax rate as inactive:

*   Go to _Settings_.
*   Select **Taxes** under _Taxes & Compliance_ in the _Organization Settings_ pane.
*   In the _Taxes_ pane, select **Tax Rates**.
*   Hover over the existing tax rate that you want to mark as inactive.
*   Click the dropdown that appears next to the tax rate and select **Mark as Inactive**.

The tax rate will be marked as inactive.

### View Records Associated With a Tax Rate

To mark a tax rate as inactive:

*   Go to _Settings_.
*   Select **Taxes** under _Taxes & Compliance_ in the _Organization Settings_ pane.
*   In the _Taxes_ pane, select **Tax Rates**.
*   Hover over the tax rate for which you want to view associated records.
*   Click the dropdown that appears next to the tax rate and select **View Associated Record**.

All sales transactions associated with the tax rate will be displayed in the _Associated Records_ pane.

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## 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. Here’s a [list of all the items](https://www.zoho.com/in/books/gst/exemptions-in-gst.html) that are exempt from tax. You can create tax exemptions in Zoho Billing and apply them to items while creating invoices. Here’s how:

*   Go to _Settings_.
*   Select **Taxes** under _Taxes & Compliance_ in the _Organization Settings_ pane.
*   In the _Taxes_ pane, select **Tax Exemptions**.
*   Click **\+ New Tax Exemption** in the top right corner.
*   In the _New Tax Exemption_ popup, enter the **Exemption Reason**, provide a **Description** and select the **Type**.
*   Click **Save**.

Once created, you can apply the tax exemptions to your invoices.

**Note:** To bulk create tax exemptions in the Tax Exemptions page, click the dropdown next to _\+ New Tax Exemption_ and select **Bulk Create Tax Exemptions**.

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## MSME Settings

On October 2, 2006, the Government of India introduced the concept of Micro, Small, and Medium Enterprises (MSMEs) through the Micro, Small, and Medium Enterprises Development (MSMED) Act, 2006 aiming to promote the growth of MSMEs in India. This provides benefits to businesses based on their size, investment in machinery or equipment, and revenue.

To ensure MSME businesses get paid on time, the Government of India has added a new clause, clause (h), in section 43B of the Income Tax Act of the Finance Act 2023. This clause states that if you make a purchase from an MSME-registered business and make a payment for that purchase within 45 days from the date of purchase, the purchase amount will be allowed as a deduction on an accrual basis (as of the bill date). However, if you make the payment after 45 days of the purchase, the purchase amount will still be allowed as a deduction on a cash basis (as of the payment date). If the payment date falls in the next financial year while the bill is in the current financial year, this will increase your tax liability for the current financial year.

In Zoho Billing, if your organisation is registered as an MSME, you can add its MSME details. You can also enter the MSME/Udyam registration number in your organisation’s address to stay compliant with section 43B(h) of the Finance Act 2023.

### Add Your Organisation’s MSME Details

If your organisation is registered as an MSME, you can enter your organisation’s MSME details in Zoho Billing. Here’s how:

*   Go to _Settings_.
*   Select **MSME Settings** under _Taxes & Compliance_ in the _Organization Settings_ pane.
*   Change the toggle near _Is your organisation MSME registered?_ to **Yes**.
*   Select your organisation’s **MSME/Udyam Registration Type**.
*   Enter your organisation’s **MSME/Udyam Registration Number**. Ensure that it is in the format UDYAM-XX-00-0000000.
*   Click **Save**.

### Add MSME Number to Your Organization Address

If your organisation is MSME registered, it is mandatory that you add your organisation’s MSME/Udyam Registration Number to your organisation’s address to stay compliant with section 43(h) of the Finance Act 2023. Here’s how:

*   Go to _Settings_.
*   Click **General** under _Setup & Configurations_ in the _Organization Settings_ pane.
*   Scroll down to the _Organisation Address Format_ section.
*   Click **Insert Placeholders**.
*   Select **MSME/Udyam No Label** and **MSME/Udyam No**.
*   Click **Preview** to preview your changes.
*   Click **Save**.

Your organisation’s MSME/Udyam registration number will now be displayed in the transaction PDFs sent to your customers.

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