Setting up taxes
when you are setting up the new e-commerce store, It is very important to set up the tax settings for the products that you are selling and taxes will vary depending on the location of the customer. It might be the country, state, or city where you want to sell with respect to your government tax system, for example, I am staying in Hyderabad in India we follow the GST Taxation system.
For the demonstration of tax, I have selected A product of 19 rupees and added it to the cart and it is showing the cart total of 19 rupees only which is not a good sign as it must show the price including the tax. so we will learn how to set the taxes in this blog.
If you are following our articles then you might know that we have installed the Woo-Commerce plugin and added the products to the Woo-Commerce site. now it’s time to set the taxes to your e-commerce store and in this blog, I will show you how to set up the taxes of your woo-commerce site.
To start you first click on the Settings button under the Woo-Commerce option on the WordPress dashboard. After clicking you will be redirected to the Woo-Commerce settings page.
Before setting up the taxes you must have to go to the General and make sure to enable the “tax rates and calculations” by that only you can see the tax settings option.
After clicking on the Tax you will see all the tax class options which are available to you at the top section Standard Rates, Reduced rate rates, and Zero rate rates. You can also add the different rates by adding the tax classes.
Before setting the tax classes you must enter the correct tax options in which you will see (1) – yes I will enter prices inclusive of the tax & (2) – No I will enter prices exclusive of tax by which you can show your product prices. I would suggest you go with the 2nd one as it would be good to show the taxes to the customers on the checkout page.
Next, you will see the calculated tax based on customer shipping or billing address or shop-based address generally taxes are calculated based on where we are sending the product from the store so depending upon that you need to select the right option for your need.
In India, we charge based on the customer’s location I mean which state or city based on that we add the tax(CGST, SGST). so, it is better to select the customer shipping address to calculate the tax and if you are having various tax options then select shipping tax class based on cart item for your shipping tax class.
In the Additional tax classes, we can add the tax options manually and also set the parameters for them and it will display in the top tax options tab along with the standard tax and zero tax.
In India, we follow the GST tax system for the demo I added the IGST and CGST then click just save changes as you can see in the below image and also select the Display prices in the shop and cart by excluding the tax to show the tax in the checkout page and also it will be better to select Display tax totals as itemized so that tax is shown to the particular product and don’t forget to click the save changes and we are done with the general tax options.
Now it is time to add the tax rates to the particular tax classes for demonstration click on one of the tax classes. Let’s select the “standard rates” and click on the insert row where you can see the
- Country code
- State code
- Rate %
- Tax name
In the first one, you have to enter the country code if you don’t know the country code just click on “country code” itself, then you will see the code and can enter the required code. Then select the state and zip code according to the location where you want to sell. You can also enter * so that it will select all.
For example, if I enter the * in the zip code and * in the city it will select all the cities. for example, you live in Hyderabad have filled IN for county code and TS for Telangana state, and all the Cities of the Telangana state will be covered in this tax class, and also you have to set the 18% GST tax slab for the state.
You will learn more about GST in my next article. You can also enable shipping and hit “save changes” to finish.
Now it’s time to assign the tax to the products and to apply the tax, you need to go to the products page of Woo-Commerce where you can see the list of all the products and click the product which you want to apply the tax. Go to the tax status in the product data where you can select the taxable or shipping. Select ‘taxable’ to apply the suitable tax class which you have created as you can see you have created the standard tax class and it will apply to the product.
To verify whether the tax applied correctly click on the “view product” and click on the “add to the cart”. if you see tax along with the price on the checkout page then congrats you have added the tax to your e-commerce store.
if you have any doubts , please feel free to reach out to us at firstname.lastname@example.org.