Setting Up India GST — End to End
This article shows how to configure REDA so Indian GST is then calculated correctly on every invoice. Indian GST has one twist that doesn’t exist in a flat VAT country: the same 18% is collected as CGST + SGST within a state, or as a single IGST across states. Get the setup right and REDA decides which, per invoice, from the two parties’ states. We’ll configure the chain with a catalogue that spans the GST slabs, then post sales to prove it.
Access you'll need. Setting up the tax rulebook requires the Accounting Admin v2 or Accounting Controller v2 permission set. The Accounts Payable v2, Accounts Receivable v2, and Read Only v2 sets can view the setup but not change it.
The configuration chain
| # | What | Why it exists | Source |
|---|---|---|---|
| 1 | Jurisdiction | IN + each state (GSTIN is state-specific) | Seed |
| 2 | Tax Type | CGST, SGST, IGST, Compensation Cess | Seed |
| 3 | Tax Profile | One per GST slab | Seed |
| 4 | Fiscal Operation | Intra-state vs inter-state — derived from the two states | Seed |
| 5 | Tax Rule | CGST+SGST for intra; IGST for inter; per slab | Seed |
| 6 | Product Fiscal Profile | Puts your product in its slab | You |
| 7 | Party Tax Profile | Registered B2B / Composition / Unregistered | Seed + you assign |
| 8 | GL Mapping | Output payable & input-credit (ITC) accounts | Seed |
| 9 | Registration + defaults | A GSTIN per state you operate in | You |
Our example catalogue — across the slabs
The per-product decision is the slab. We’ll configure five items spanning the GST rate bands:
| Product / service | Slab | Intra (CGST + SGST) | Inter (IGST) |
|---|---|---|---|
| Branded packaged food | 5% | 2.5% + 2.5% | 5% |
| Cotton garments (> ₹1,000) | 12% (legacy) | 6% + 6% | 12% |
| Management consulting | 18% | 9% + 9% | 18% |
| Air conditioner | 28% | 14% + 14% | 28% |
| Large SUV (luxury) | 40% special | 20% + 20% | 40% |
Step 1 — Jurisdictions
The seed creates IN plus every state and union territory. States matter here in a
way they don’t for VAT: a GSTIN is state-specific, and the engine compares the
seller’s state with the buyer’s to decide intra vs inter. Confirm the states you
trade in exist (e.g. IN-MH Maharashtra, IN-KA Karnataka).
Step 2 — Tax Types
| Tax Type | What it is | Recoverable (ITC)? |
|---|---|---|
IN-CGST | Central GST — intra-state, central half | Yes |
IN-SGST | State GST — intra-state, state half | Yes |
IN-IGST | Integrated GST — inter-state, single levy | Yes |
IN-CESS | Compensation Cess — on sin/luxury goods | No |
The three GST components are recoverable as input tax credit on the purchase side — the reason GST is (largely) a tax on value added, not a cost. Compensation Cess ships non-recoverable in the seed; if your business is entitled to a cess credit pool, switch the flag on the Tax Type and add a purchase-side GL mapping.
Step 3 — Tax Profiles (the slabs)
One Tax Profile per slab — these are the buckets you assign products to:
| Tax Profile | Slab |
|---|---|
IN-GOODS-5 | 5% |
IN-GOODS-12 | 12% (legacy) |
IN-GOODS-18 | 18% |
IN-GOODS-28 | 28% (legacy) |
IN-GOODS-40 | 40% special |
Step 4 — Fiscal Operations (the intra/inter switch)
This is the India-specific link. Two fiscal operations
ship — IN-INTRA (same state) and IN-INTER (different states).
The engine derives which applies by comparing the seller’s and buyer’s
jurisdictions; you don’t set it on the invoice. It then steers the line to the CGST+SGST
rules or the IGST rule:
| Seller state vs buyer state | Fiscal Operation | Taxes that fire |
|---|---|---|
| Same (e.g. MH → MH) | IN-INTRA | CGST + SGST |
| Different (e.g. MH → KA) | IN-INTER | IGST (single) |
Step 5 — Tax Rules (slab × intra/inter → rate)
Each slab ships three rules: a CGST and an SGST rule scoped to IN-INTRA, and an
IGST rule scoped to IN-INTER. The 18% slab, for example:
| Rule | Tax Profile | Fiscal Operation | Rate |
|---|---|---|---|
IN-CGST-18 | IN-GOODS-18 | IN-INTRA | 9% |
IN-SGST-18 | IN-GOODS-18 | IN-INTRA | 9% |
IN-IGST-18 | IN-GOODS-18 | IN-INTER | 18% |
So an intra-state 18% sale fires two rules (9% + 9%); an inter-state one fires a single 18%. Same money to the exchequer, split differently — and the fiscal-op scoping is what keeps them from both firing.
Step 6 — Classify your catalogue (the real work)
Give each product a Product Fiscal Profile linking it to its slab (and record its HSN/SAC code — India’s classification code for goods and services — there for the GST return). Once done, intra vs inter is automatic on every future invoice:
| Product | Assign Tax Profile | HSN/SAC |
|---|---|---|
| Branded packaged food | IN-GOODS-5 | e.g. 2106 |
| Cotton garments | IN-GOODS-12 | e.g. 6109 |
| Management consulting | IN-GOODS-18 | e.g. 9983 |
| Air conditioner | IN-GOODS-28 | e.g. 8415 |
| Large SUV | IN-GOODS-40 | e.g. 8703 |
Step 7 — Party Tax Profiles
| Party Profile | Use for |
|---|---|
IN-REG-B2B — Registered B2B | Your entity, and GST-registered customers/vendors |
IN-COMP-B2B — Composition Scheme | A small supplier paying a flat composition rate (no ITC) |
IN-UNREG-B2C — Unregistered B2C | An end consumer / unregistered buyer |
Step 8 — GL mappings
Each GST component has an output (payable) and an input (ITC) account:
| Tax | Sales → Payable | Purchase → ITC asset |
|---|---|---|
| CGST | 2311-CGST-OUT-IN | 1511-CGST-ITC-IN |
| SGST | 2312-SGST-OUT-IN | 1512-SGST-ITC-IN |
| IGST | 2313-IGST-OUT-IN | 1513-IGST-ITC-IN |
| Cess | 2314-CESS-OUT-IN | — (seeded non-recoverable) |
Step 9 — Register per state & set defaults
IN-REG-B2B.The payoff — intra vs inter, automatically
Sell ₹10,000 of management consulting (18% slab). Change only the customer’s state and the configured data does the rest:
| Sale | Taxes | Total | Posts to |
|---|---|---|---|
| Maharashtra → Maharashtra (intra) | CGST ₹900 + SGST ₹900 | ₹11,800 | 2311 + 2312 |
| Maharashtra → Karnataka (inter) | IGST ₹1,800 | ₹11,800 | 2313 |
The intra-state journal — note the two halves:
| Account | Debit | Credit |
|---|---|---|
| Accounts Receivable | ₹11,800.00 | |
| Revenue | ₹10,000.00 | |
CGST Payable — 2311-CGST-OUT-IN | ₹900.00 | |
SGST Payable — 2312-SGST-OUT-IN | ₹900.00 |
Purchases & cess
On a purchase, GST is recoverable, so it debits the ITC asset accounts above (not expense) and
flows into your set-off. The seeded Compensation Cess rule (IN-CESS-LUXURY, 1%)
is scoped to the IN-GOODS-28 profile — a legacy-slab luxury line picks it
up automatically, alongside CGST+SGST or IGST, and posts it to its own account. Items whose
notified cess differs (tobacco, aerated drinks, large vehicles carry item-specific rates) need
their own cess rule at the correct rate, scoped to the right profile.
If GST is wrong, check the chain
- Both states set? If the customer’s Tax Jurisdiction is blank, the engine can’t tell intra from inter.
- Registration in the supplying state — with effective dates covering the invoice date.
- Product classified to a slab profile (Step 6), or no GST fires.
- Seeing 36% instead of 18%? That meant CGST+SGST and IGST both fired — the fiscal-op scoping prevents it; re-run the current seed if you’re on an old pack.
Where to go next
- UK VAT — a flat-rate country for contrast.
- Brazil (ICMS, IPI, PIS/COFINS) — the most complex multi-tax setup.
- Tax Rules — how GST intra vs inter-state rules match.
- Purchase-Side WHT (TDS on Bills) — India’s TDS on vendor payments.
- Tax Seeding Wizard — load India’s GST rulebook fast.
Frequently asked questions
The two states — your entity’s Tax Jurisdiction and the customer’s Tax Jurisdiction. Same state → CGST + SGST; different states → IGST. You never set it on the invoice; the engine derives the fiscal operation and scopes the rules accordingly.
GST 2.0 (Sep 2025) made 5% / 18% / 40% the working slabs, but 12% and 28% remain for legacy and transition items. They ship in the seed; assign them only to products that still legally attract those rates.
Yes — GST registration is state-wise. Create an Entity Tax Registration (GSTIN) for each state you supply from; the registrations are what establish nexus. The origin itself is the entity’s own Tax Jurisdiction, compared against the buyer’s.
A composition supplier pays a small flat rate on turnover and cannot collect GST or claim ITC. Assign such a party the IN-COMP-B2B profile so rules can recognise the status.
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