Creating a Tax Rate
- Go to Settings → Tax Rates → Add Tax Rate
- Enter tax name
e.g. "VAT 15%", "GST 18%", "Zero Rated", "Exempt" - Enter percentage
For zero-rated or exempt items, enter 0%. - 4Save
Tax Groups
Tax Groups combine multiple taxes that apply together. Common use cases:
- India GST: CGST 9% + SGST 9% = 18% GST. Create both rates, then create a Tax Group that includes both. The invoice shows the breakdown.
- Federal + State tax: Federal 5% + State 3% = 8% combined. Same approach.
To create a Tax Group: Settings → Tax Rates → Tax Groups → Add Group. Name it (e.g. "GST 18%"), add the individual rates, and save. Use the Tax Group wherever you'd use a single rate.
Inline Tax vs Invoice Tax
| Type | How it works | When to use |
|---|---|---|
| Inline Tax | Tax is included in the displayed price (tax-inclusive pricing). The selling price already contains the tax — no extra amount is added at checkout. | Retail businesses that display tax-inclusive prices on shelves (e.g. "Rs. 150 inclusive of all taxes") |
| Invoice Tax | Tax is added on top of the listed price at invoice level. The selling price is the pre-tax price, and tax is shown as a separate line. | B2B businesses, service providers, or regions requiring tax to be shown separately on invoices |
Applying Tax to Products
You can apply tax in two places:
- Default tax: Set in Settings → Business Settings. Applied to all products unless overridden.
- Per-product tax: Edit a product → Tax field → select the specific rate for that product. This overrides the default.
GST Setup (India and other GST countries)
For Indian businesses:
- 1Create CGST rates (e.g. CGST 9%, CGST 6%, CGST 2.5%)
- 2Create SGST rates (e.g. SGST 9%, SGST 6%, SGST 2.5%)
- 3Create Tax Groups pairing them (e.g. GST 18% = CGST 9% + SGST 9%)
- 4Assign the correct tax group to each product
- 5Enable "Show tax breakdown on invoice" in Settings so CGST and SGST are shown separately as required by GST law
Enter your GSTIN (GST Identification Number) in Settings → Business Settings → Tax Number. It will appear automatically on all your GST invoices.
