Taxes are disabled by default in WooCommerce. Enable them:

1. Go to WooCommerce → Settings → General
2. Find "Enable taxes" and check the box
3. Click Save changes

A new Tax tab will appear in WooCommerce Settings.

Go to WooCommerce → Settings → Tax to configure global tax behaviour.

Prices Entered With Tax

This is the most important setting — it determines whether the prices you enter on your product pages are inclusive or exclusive of tax.

"Yes, I will enter prices inclusive of tax"

• Your product price of ₹1,000 includes GST
• The displayed price is ₹1,000, and GST is calculated as already included
• Best for B2C retail stores where you want to display clean prices

"No, I will enter prices exclusive of tax"

• Your product price of ₹1,000 does not include GST
• Displayed price becomes ₹1,180 (₹1,000 + 18% GST)
• Better for B2B stores where customers care about the pre-tax price

Calculate Tax Based On

• Customer shipping address — Tax calculated based on where the product is delivered (recommended for most physical goods)
• Customer billing address — Tax based on billing address
• Store base address — Always use your store's tax rates regardless of customer location

For India: Store base address works for most domestic stores. All customers are charged the same GST regardless of their state.

Shipping Tax Class

• Standard — Apply the standard tax rate to shipping
• Cart items' tax class — Apply the same rate as the highest-taxed item in the cart
• Zero rate — Shipping is always tax-free

For India, most stores set shipping as Standard (charged at the same rate as the products).

Additional Tax Classes

By default, WooCommerce provides "Standard", "Reduced Rate", and "Zero Rate" tax classes. For India, you might add:

• 5% GST Class (essential goods)
• 12% GST Class
• 18% GST Class
• 28% GST Class

Add classes under the "Additional tax classes" field: enter GST 5%, GST 12%, GST 18%, GST 28% (separate by line breaks) and save.

Prices Display in Shop

For B2C retail: Including tax is standard. For B2B stores: Excluding tax with a note showing tax amount is clearer for business buyers.

Go to WooCommerce → Settings → Tax → Standard Rates (or your custom tax class tab). Click Insert Row to add each tax rate.

Standard GST Rate (18%) for India

Explanation:

• Country: IN (India's country code)
• State: Leave blank to apply to all states (or specify state codes for state-specific rates)
• Rate %: 18 (or your applicable rate)
• Tax Name: "GST" (what appears on invoices and checkout)
• Priority: 1 (if using CGST+SGST, use priorities 1 and 2 for the two components)
• Compound: No (for standard GST)
• Shipping: Yes (if shipping is also taxed)

Multiple GST Rates for Different Product Categories

For stores selling products at different GST rates:

1. Go to WooCommerce → Settings → Tax
2. In the "Additional tax classes" field, add: GST 5%, GST 12%, GST 18%, GST 28%
3. New tabs appear for each class
4. Click GST 5% tab → Insert Row: Country: IN, Rate: 5, Tax Name: GST, Priority: 1
5. Repeat for 12%, 18%, 28%

Now assign tax classes to individual products: Open any product → Product Data → General → Find "Tax class" dropdown → Select the appropriate GST rate class.

Exempt products (Zero rate)

Some products in India are GST-exempt (certain food items, books, medical supplies). For these:

1. In the product editor, Tax class → "Zero Rate"
2. Go to WooCommerce → Settings → Tax → Zero Rates and add a row with Rate: 0%

This ensures exempt products display correctly at checkout with ₹0 tax, while still showing in tax summaries.

IGST vs CGST + SGST

India's GST system has three components:

• CGST (Central GST) — collected by central government on intra-state sales
• SGST (State GST) — collected by state government on intra-state sales
• IGST (Integrated GST) — on inter-state sales

Simple setup (most small B2C stores): Just configure a single rate labelled "GST" — your accountant handles the IGST/CGST+SGST split based on your filing.

Technically correct setup (CGST + SGST on invoices):

1. Add two rows for each intra-state rate
2. First row: CGST at half the total rate (e.g., 9% for 18% GST)
3. Second row: SGST at half the total rate (9%), set to Priority 2, Compound: No

This shows separate CGST and SGST lines on customer invoices — technically compliant but complex to configure.

GST Invoicing Plugin (Recommended for India)

For fully GST-compliant invoices with GSTIN fields, HSN codes, and proper tax summaries, install a dedicated plugin:

• WooCommerce India GST by MakeWebBetter (free) — Adds GSTIN field to checkout for B2B customers, generates proper GST invoices with CGST/SGST/IGST breakdown
• WooCommerce PDF Invoices & Packing Slips — configure with GST fields for professional invoicing

HSN Codes

For B2B sales and proper GST compliance, each product should have an HSN (Harmonised System of Nomenclature) code. Add a custom product field via a GST plugin or custom field to store HSN codes per product.

Before going live, test the complete checkout:

1. Add a taxable product to your cart
2. Proceed to checkout
3. Enter an Indian address

Verify:

• The tax amount is calculated correctly
• The tax name (GST) displays correctly
• The total price reflects the correct tax-inclusive amount
• The order confirmation email shows tax details

Test edge cases:

• Zero-rated products: verify no GST is charged
• Multiple products with different rates: verify each applies the correct rate
• Mixed cart (taxable + zero-rated): verify only the taxable items show GST