Creating India GST Tax Rate Rules

The India Localization SuiteTax Engine SuiteApp uses the India GST tax rate rules to calculate GST on sales and purchase transactions.

The SuiteApp determines the GST rule to apply to an item for tax calculation based on the HSN or SAC code selected for the item.

You can create a tax rate rule with a unique combination of the following information. However, you cannot create both taxable and nontaxable rules with the same combination in the same effective period.

• Subsidiary Registration Type – Regular, Composite Dealer, Exempted, or SEZ.

• Available On – Sales transactions or Purchase transactions

• Vendor or Customer Registration Type – Regular, Composite Dealer, SEZ, Unregistered, or Overseas.

• Classification of Supply – Interstate or Intrastate.

• HSN or SAC Code

• Effective From – Date from which the rule is valid.

• Compensation Cess – Specify whether the rule should calculate Compensation Cess.

To enter India tax rate rule for GST:

1. Go to Setup > India Localization > GST Tax Rate Rules.

2. Click New Tax Rate Rule.

3. In the Subsidiary Registration Type field, select the subsidiary’s registration type.

4. In the Available On field, select the type of transaction to which this rule applies.

   • Purchase Transactions – If you select this transaction type, the Vendor Registration Type field becomes available.

   • Sales Transactions – If you select this transaction type, the Customer Registration Type field becomes available.

5. In the Customer or Vendor Registration Type field, select the entity's registration type.

6. In the HSN or SAC Code field, select the HSN or SAC code for this rule.

7. In the GST Rate field, select the tax rate applicable to the rule.

   Note:

   The Ineligible for ITC box is checked by default for Nil Rated or Exempted tax rates because Nil Rated and Exempted supplies cannot claim Input Tax Credit (ITC).

8. In the Classification of Supply field, select the classification of supply. The field is unavailable when the subsidiary registration type is SEZ.

   • Inter-State Supply – This classification type attracts Integrated Goods & Services Tax (IGST). The tax rate remains the same as GST rate. You can view the tax code and tax rate in the Tax Code and Rate column.

   • Intra-State Supply – This classification type attracts Central Goods & Services Tax (CGST), State Goods & Services Tax (SGST), or Union Territory Goods and Services Tax (UTGST). The tax rate and tax amount are divided equally between SGST and CGST or UTGST. You can view the tax code and tax rate in the Tax Code and Rate column.

     When you select intrastate supply, check any of the following boxes:

     • Within the State – Check this box if the supply of goods and services is within the same state.

     • Within the Union Territory – Check this box if the supply of goods and services is within the union territory.

9. In the Effective From field, enter the date from which the tax rule is valid.

10. In the Valid Until field, enter the date till which the tax rule is valid.

11. Check the Taxable box if this tax rule is taxable.

12. Check the Amount Based box if this rule is amount-based. In an amount-based rule, the HSN or SAC Code determines the tax rate to apply based on an amount range.

    1. In the From Amount and To Amount fields, enter the amount range.

13. Check the Reverse Charge box if reverse charge applies to transactions that use this tax rule. This box is available only for purchase transactions.

14. Check the Ineligible for ITC box if the tax rule is not eligible for ITC under GST. The tax amount should be added to the related item or expense cost. If this box is checked, the tax rule applies to purchase transactions.

15. Check the Compensation Cess box to calculate Compensation Cess using this rule. GST Cess is calculated based on the values in the following fields:

    1. Cess Rate Type – Select the GST Cess rate type from the following types:

       1. Percentage – This calculates GST Cess based on percentage.

       2. Quantity – This calculates GST Cess based on the cess rate per unit and units.

       3. Percentage + Quantity – This calculates GST Cess based on cess percentage and cess rate per unit.

       4. Percentage or Quantity (Higher) – This calculates GST Cess based on cess percentage or cess rate per unit, whichever is set higher.

    2. Cess% – Enter the cess percentage that you want to apply.

    3. Cess Rate Per Unit – Enter the cess rate per unit that you want to apply.

    4. Units – Select the units value that you want to apply.

16. Click Save.

Related Topics

• Setting Up Default Unique Quantity Code (UQC) for Items
• Setting Up India GST Tax Registrations for Entities
• Assigning India Tax Nature to Items
• Assigning Tax Accounts to India GST Types
• Creating HSN or SAC Codes for India GST
• Creating India GST Tax Rate Rules

General Notices