Problem Overview
Proper tax configuration is critical for maintaining legal compliance and ensuring your financial reporting is accurate. Many users experience issues where the GST amount does not apply to the invoice total, the HSN/SAC code columns do not appear on the final PDF, or the reverse charge mechanism fails to trigger for specific B2B transactions.
This problem generally affects businesses that have recently registered for GST or those who are transitioning their accounting from manual spreadsheets to the BILLAZZ platform. The software strictly enforces tax rules based on the configuration of your Business Profile.
You will know you have a tax configuration issue if your invoice total simply sums the line items without adding the expected 5%, 12%, or 18% tax brackets, or if your clients reject your invoice due to missing mandatory tax identification numbers.
Common Reasons
- GST Mode is Disabled: The platform defaults to non-GST mode for freelancers. Tax features remain entirely hidden across the entire application until explicitly activated in settings.
- Incorrect GSTIN Format: A GSTIN must be exactly 15 alphanumeric characters. If it is shorter or contains special characters, the system rejects it and disables tax compliance features.
- Tax Exclusivity vs. Inclusivity: Users often mistakenly set their prices as "Tax Inclusive" while expecting the system to add tax on top of the final amount, leading to perceived calculation errors.
- Missing State Code: Interstate vs. Intrastate calculations (CGST/SGST vs. IGST) rely entirely on the state code of both your business and your client's address. If either is missing, it defaults to local tax.
- Client Profile Incomplete: If you are billing a registered business, but you haven't added their GSTIN to their client profile, the system will treat it as a B2C transaction and omit the B2B tax headers.
Complete Step-by-Step Solution
1 Enable Global GST Mode
You must tell the system that your business is legally required to collect tax.
Action: Navigate to Settings > Business Profile. Scroll down to the 'Taxation' section. Toggle the switch that says "My business is registered for GST".
2 Enter and Validate Your GSTIN
Your GSTIN is used to automatically determine your home state for IGST calculations.
Action: Type your 15-digit GSTIN into the field. The system will automatically parse the first two digits (State Code) and display your registered state next to the input field.
3 Configure Client Tax Details
To accurately split CGST/SGST or apply IGST, the client's location is required.
Action: Go to the Clients tab, edit your client, and ensure their 'State' is selected from the dropdown. If they are a registered business, enter their GSTIN in the provided field. Save the client profile.
4 Apply Taxes on the Invoice Builder
Taxes must be applied to individual line items for accurate ledger reporting.
Action: Open a new invoice. You will now see a 'Tax %' column next to the price column. Enter the rate (e.g., 18). The system will automatically calculate the amount and display the CGST/SGST split in the subtotal section at the bottom.
Tips & Best Practices
If you deal with multiple products, use the 'Products' database to save your HSN/SAC codes alongside the item descriptions. When you add that product to an invoice in the future, the HSN code and tax rate will auto-populate, saving you hours of manual entry and preventing compliance errors. Always double-check the IGST vs CGST split before hitting send.
Frequently Asked Questions
- Why is it showing IGST instead of CGST/SGST?
The system applies IGST when the client's state differs from your business's registered state. Ensure both addresses are correct in the profile and client settings. - How do I generate a Bill of Supply instead of a Tax Invoice?
If you are registered under the Composition Scheme, go to Tax Settings and select "Composition Scheme". The header will automatically change to 'Bill of Supply' and tax columns will be disabled. - Can I apply different tax rates to different items on the same invoice?
Yes, the tax column is per-line-item. You can have one item at 5% and another at 18%. The footer will display a consolidated tax summary breakdown. - Do I need to manually calculate Reverse Charge?
No, simply check the "Reverse Charge Applicable" box in the invoice settings panel, and the PDF will automatically include the mandatory legal declaration. - Is e-Invoicing supported?
We currently provide JSON exports that are fully compatible with the government IRP portal for businesses exceeding the e-invoicing turnover threshold. Automatic portal upload requires the Enterprise plan.
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