Taxes (India)

GST or the Goods and Services Tax is a tax system that replaces the several indirect taxes with a single tax. This tax is applicable across India and will be levied on all goods and services.

Components of GST

GST will follow 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.

The new GST tax structure will have four slabs:

Zero rate - 0%
Lower rate - 5%
Standard rate - 18%
Higher rate / Luxury or Sin Goods Rate - 40%

Enable GST

If your organisation was created with India as the country, you will be able to enable GST and your users can apply the appropriate GST to their expenses. Here’s how:

Go to Settings on the left sidebar.
(OR)
Click Settings in the top right corner of the page.
Click Taxes under Taxes & Compliance.
Click Enable GST in the top right corner.
Mark the Is your business registered for GST? option.
Enter your 15-digit GSTIN.
Mark the Is your business registered for composition scheme? option if you are registered under the composition scheme.

Insight: Small business owners can get rid of tedious GST formalities and pay GST at a fixed rate of turnover. This scheme can be opted by any taxpayer whose turnover is less than Rs. 1.5 crore. In case of North Eastern states and Himachal Pradesh, the limit is Rs 75 lakh.

Enter your Composition Scheme Percentage. Composition Scheme Percentage is 1% for manufactures and traders, and 5% for restaurants (serving without alcohol).
Click Save.

Once you save your GST Settings, a set of default taxes will be enabled for you and your employees will be able to apply it to their transactions.

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. Here’s how:

Go to Settings on the left sidebar.
(OR)
Click Settings in the top right corner of the page.
Click Taxes under Taxes & Compliance.
Go to GST Settings and slide the toggle next to the Is your business registered for GST? option.
Read and verify the details in the pop-up and click Continue.
Click Add New GSTIN and Associate Locations.
Enter the GSTIN for the location.
Enter the necessary details.
In the Associated Locations field, select the locations you want to link to the GSTIN.

Note: The Associated Locations 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.

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 on the left sidebar.
(OR)
Click Settings in the top right corner of the page.
Go to Locations under Organization.
Click Associate GSTIN next to the location you want to update.
Select one of the following options in the Associate Type field:
- To add new GSTN and associate it with a locations, select the Add New GSTIN & Associate, enter the GSTIN and and all the other necessary information and click Save.
- To associate an existing GSTIN, select Associate Existing GSTN, click the GSTIN dropdown and select a GSTIN, and click Save.

The GSTIN will be associated with the location.

After associating GSTIN with the location, you can mark the location as active by clicking the dropdown next to the location and select Mark as Active.

Manage Additional GSTINs

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

Click Vendors on the left sidebar.
Select the vendor for whom you want include the additional GSTIN.
Click Add Additional Address in the Overview tab and enter the required details.
Go to the Tax Information dropdown and select Manage Tax Informations to add or select the GSTIN that must be associated with this address.
Click the Add New Tax Information button in the pop-up.
Enter the GSTIN/UIN and the Place of Supply will be automatically populated.
Click Save and Select and the tax information will be associated with the additional address.

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

Add New Tax

Besides the default set of taxes, you can create a new tax. Here’s how:

Go to Settings on the left sidebar.
(OR)
Click Settings in the top right corner of the page.
Click Taxes under Taxes & Compliance.
Go to the Tax Rates tab.
Click the + New dropdown and select New Tax.
Enter the Tax Name, Tax Rate, and choose the Tax Type you want to add.
Click Save.

Add New Tax Group

For some expenses, multiple taxes may be applied. For this purpose, you can club these taxes under a tax group. Here’s how:

Go to Settings on the left sidebar.
(OR)
Click Settings in the top right corner of the page.
Click Taxes under Taxes & Compliance.
Go to the Tax Rates tab.
Click the + New dropdown in the top right corner and select New Tax Group.
Enter the Tax Group Name and select the taxes you would like to add to your tax group.
Click Save.

The newly created tax group can now be selected while creating an expense.

Edit Tax Rates

Here’s how you can edit tax rates:

Go to Settings on the left sidebar.
(OR)
Click Settings in the top right corner of the page.
Click Taxes under Taxes & Compliance.
Go to the Tax Rates tab.
Hover over the tax rate you want to edit and click the dropdown.
Click Edit.
Make the necessary changes and click Save.

Mark Tax Rate as Inactive

Here’s how you can mark a tax rate as inactive:

Go to Settings on the left sidebar.
(OR)
Click Settings in the top right corner of the page.
Click Taxes under Taxes & Compliance.
Go to the Tax Rates tab.
Hover over the tax rate you want to mark as inactive and click the dropdown.
Click Mark as Inactive.

The tax rate will be marked as inactive.

Mark an Inactive Tax Rate as Active

Go to Settings on the left sidebar.
(OR)
Click Settings in the top right corner of the page.
Click Taxes under Taxes & Compliance.
Go to the Tax Rates tab.
Hover over the tax rate you want to mark as active and click the dropdown.
Click Mark as Active.

The tax rate will be marked as active.

Delete Tax Rates

Here’s how you can delete tax rates:

Go to Settings on the left sidebar.
(OR)
Click Settings in the top right corner of the page.
Click Taxes under Taxes & Compliance.
Go to the Tax Rates tab.
Hover over the tax rate you want to delete and click the dropdown.
Click Delete.
Confirm your action by clicking OK in the pop-up.

View Records Associated With a Tax Rate

Here’s how you can view the records associated with a tax rate:

Go to Settings on the left sidebar.
(OR)
Click Settings in the top right corner of the page.
Click Taxes under Taxes & Compliance.
Go to the Tax Rates tab.
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 transactions associated with the tax rate will be displayed in the Associated Records pane.

Apply GST to Expenses

Your employees can apply GST to the expenses they record in Zoho Spend. Here’s how:

Go to Expenses under Travel & Expense on the left sidebar.
Click + New Expense in the top right corner.
Enter the Date, Category, and Amount.
Under the Tax Type dropdown, select the tax type.
Select whether the expense is incurred on goods or a service.
Enter the GSTIN of the merchant if it’s mentioned in the receipt.
Mark the Is Reverse charge applicable? option, if reverse charge is applicable to that expense.
Select the place at which the good or service was received under the Destination of Supply dropdown.
In the Tax dropdown, select the tax rate you want to apply. If the amount you’ve entered is inclusive of GST, mark the Tax Inclusive option. If the expense is tax exempt, select Tax Exempt and provide a reason by clicking Update next to Exemption Reason. You can select an existing exemption reason or enter a new one.
Enter the HSN of the goods, and the SAC of the service if it’s mentioned in the receipt.

Insight:

Harmonized System of Nomenclature (HSN) is an internationally standardized system of names and numbers used to classify goods in trade and taxation. The HSN code helps identify products uniformly across countries and simplifies international trade, customs processes, and tax filing.
Services Accounting Code (SAC) is a system of classification used to identify and categorize services for taxation, especially under GST in India. Just like HSN codes classify goods, SAC codes classify services.

Click Save and Close to save your newly created expense.

Add Tax Exemptions

The government has introduced zero rated tax as part of the four slab GST structure. So, if your users incur expenses on zero rated or exempted goods, they can add the reason for tax exemption and exempt line items from tax while creating an expense.

Here’s how you can add tax exemptions:

Go to Settings on the left sidebar.
(OR)
Click Settings in the top right corner of the page.
Click Taxes under Taxes & Compliance.
Navigate to the Tax Exemptions tab.
Click + New Tax Exemption in the top right corner.
Enter the Exemption Reason and provide Description.
Click Save.