GST

Path: Business functionality > Local functionality > India > GST · tier official · system localization · narrative reviewed (checked by Opus)

Overview

This section covers Goods and Services Tax handling in the India localization. It starts with setup pages (GST, Compensation Cess, GST TDS and TCS, bank charges) and then walks through transaction scenarios. Most pages describe one scenario, with intra-state (CGST/SGST) and inter-state (IGST) treatment and the resulting GL entries, often with and without input tax credit.

Transaction pages are grouped by party and type. Sales cover registered and unregistered customers, exempted sales, exports, SEZ and overseas place of supply, and returns. Purchases cover registered, unregistered (reverse charge), composite, SEZ and foreign vendors and services with an overseas place of supply. Separate return pages cover registered, unregistered, composite or exempted, foreign and overseas place of supply cases. Further pages cover advance payments, journals, bank charges, service management, service and stock transfers, and Input Service Distribution.

Compliance and period-end pages cover E-Invoice, E-Way Bill, GST reconciliation with GSTR-2A, credit adjustments and settlement of net payment liability. Start with “Setting up Goods and Service Tax”, then open the page for the transaction type you need.

Key points

• Setting up Goods and Services Tax covers the tax engine, rates, registration numbers, accounting periods, GST groups, HSN/SAC codes and posting accounts.
• Purchases from registered vendors use CGST/SGST or IGST with credit availment options. Unregistered vendors attract GST only for notified services under reverse charge. Composite vendors and exempted goods have no GST impact.
• Imports from foreign vendors fall under reverse charge, with IGST on GST Assessable Value plus Basic Custom Duty. Purchases from SEZ vendors also carry IGST on that base, with or without bill of entry.
• GST Compensation Cess has five calculation types: Cess%, Threshold, Cess% + Amount/Unit Factor, whichever higher of Cess% or Amount/Unit Factor, and Amount/Unit Factor.
• GST TDS is set up at 2% on payments above INR 250000, and e-commerce operators collect GST TCS at 1%. Separate pages cover vendor and customer payments.
• Advance payments are covered for customers and vendors, including application to invoices, un-application, interim accounts and GSTR-1 reporting.
• E-Invoice generates JSON invoices and imports signed responses with IRN validation. E-Way Bill exports a template to Excel for goods over INR 50,000.
• GST reconciliation matches purchases to GSTR-2A, and settlement of net payment liability discharges tax monthly using credit offsets in priority order.

Learn pages

• Calculation of Income Tax TDS and GST on Purchase Transactions: Learn how to calculate Income Tax TDS and GST on purchase transactions in Business Central for India.
• Calculation of TCS as per the Income Tax Act, 1961 and GST on Sales Transactions: Learn how to calculate TCS under the Income Tax Act, 1961, and GST on sales transactions in Business Central.
• Cess Calculation: Learn how GST Compensation Cess is calculated in Business Central for India, including calculation types, methods, and examples.
• E-Invoice: Learn about the E-Invoice feature in Business Central for India, including how to generate, export, import, and manage e-invoices in compliance with GST requirements.
• E-Way Bill: Learn how to generate and manage E-Way Bills for goods transportation in India using Business Central.
• Export of Goods and/or Services to Foreign Customer: Learn how to export goods and services to foreign customers in India, including GST treatment, invoice creation, and accounting entries.
• GST and Kerala Flood Cess on Sales Transaction: Information about GST and the discontinued Kerala Flood Cess on sales transactions in India.
• GST and TCS on Advance Customer Payments: Learn how GST and TCS are applied to advance customer payments in Business Central for India, including calculation and posting details.
• GST and TDS on Vendor Advance Payments: Learn how GST and TDS are applied to vendor advance payments in Business Central.
• GST Credit and GST Liability adjustment for open Reverse Charge Goods and Services Invoices: Explains how to adjust GST credit and GST liability for open reverse charge service invoices in Business Central India localization.
• GST Exempted Sales: Learn how to process GST exempted sales in Business Central, including creating sales invoices and credit memos for exempt customers in India.
• GST Input Service Distribution Overview: Overview of GST Input Service Distribution functionality in Business Central for India, including setup steps and configuration requirements.
• GST Input Tax Credit Adjustments: Learn how to manage and adjust GST input tax credit in Business Central for India, including credit reversals, reavailment, and reverse charge transactions.
• GST on Advance Payment application with Purchase Invoice: Learn how GST is applied when advance or normal payments are made to vendors and later applied to purchase invoices in Business Central for India.
• GST on Advance Payment Application with Sales Invoice: Learn how GST is applied on advance payments and their application to sales invoices in Business Central for India.
• GST on Advance Payment made to Vendor, with reverse charge: Learn how GST is calculated and applied on advance payments made to vendors under reverse charge in Business Central India localization.
• GST on advance payment received from customer: Learn how GST is calculated and reported on advance payments received from customers in Business Central for India.
• GST on Bank Charges Transaction: Learn how GST is applied to bank charges transactions in India, including calculation methods, accounting entries, and compliance requirements for Business Central.
• GST on Journals where Services paid directly through Cash or Bank: Explains GST calculation on journals for services paid directly via cash or bank in Business Central India localization.
• GST on Service Management: Learn how GST is applied to service management processes in Business Central for India, including service orders, invoices, and credit memos.
• GST Reconciliation: Provides an overview and setup instructions for GST reconciliation in Business Central for India.
• GST Settlement of Net Payment Liability: Provides information about the GST settlement process for net payment liability in Business Central for India.
• GST TCS on Vendor Payment: Learn how GST Tax Collected at Source (TCS) is applied and processed on vendor payments in Business Central for India.
• GST TDS and GST TCS on Customer Payments: Learn how to apply GST TDS and GST TCS on customer payments in Business Central for India.
• Import from Foreign Vendor: Learn how to process imports from foreign vendors in India, including GST and reverse charge procedures for goods and services.
• Input Service Distribution Process: Describes the process of distributing input service GST credits across locations in Business Central for India.
• Purchase Credit Memo or Return Order to Foreign Vendor: Learn how to create a purchase credit memo or return order to a foreign vendor in India, including GST and reverse charge considerations.
• Purchase from Composite Vendor or Purchase of exempted goods and services with no GST Impact: Explains how to record purchases from composite vendors or for exempted goods and services that have no GST impact in Business Central India localization.
• Purchase from Registered Vendors: Learn how to process purchases from registered vendors in India, including GST setup, invoice creation, and accounting entries in Dynamics 365 Business Central.
• Purchase of Goods from an Unregistered Vendor (Reverse Charge): Learn how to process purchases from unregistered vendors in India under the GST reverse charge mechanism in Dynamics 365 Business Central.
• Purchase of Goods from SEZ Vendor: Learn how to process the purchase of goods from a Special Economic Zone (SEZ) vendor in India, including GST calculation and accounting entries in Business Central.
• Purchase of Services for Overseas Place of Supply from Registered Vendor: Learn how to process the purchase of services from a registered vendor in India when the place of supply is overseas, including GST calculation and accounting entries.
• Purchase Return of Goods and Services to Composite Vendor or Purchase Return of exempted goods and services with no GST Impact: Purchase Return of Goods and Services to Composite Vendor or Purchase Return of exempted goods and services with no GST Impact
• Purchase Return of Services for Overseas Place of Supply to Registered Vendor: Purchase return of services for overseas place of supply to registered vendor
• Purchase Return to Registered Vendor: Learn how to process purchase returns to registered vendors in India, including GST implications and accounting entries in Business Central.
• Purchase Return to Unregistered Vendor (Reverse Charge): Learn how to process purchase returns to unregistered vendors under GST reverse charge in Business Central India.
• Sale of Services to Overseas Place of Supply to registered customer: Explains how to process sales of services to registered customers when the place of supply is overseas, under GST regulations in India.
• Sales Return of Goods from Registered or Unregistered Customer: Learn how to process sales returns of goods from registered or unregistered customers in India.
• Sales returns from registered customers for goods with an overseas place of supply: Process for handling sales returns or issuing credit notes for services supplied overseas to registered customers in India.
• Sales to Registered or Unregistered Customer: Learn how to process and report sales to registered (B2B) and unregistered (B2C) customers in India.
• Service Transfer: Learn how to process service transfers between locations, branches, or divisions under GST in India, including order creation and accounting entries.
• Setting up for GST TDS and GST TCS: Learn how to configure GST TDS and GST TCS in Business Central for India, including setup steps and compliance requirements.
• Setting up Goods and Service Tax: Describes the essential steps for basic GST setup in Business Central for India.
• Setting up GST Compensation Cess: Describes the essential configurations needed to set up GST Compensation Cess.
• Setting up GST for Bank Charges: Learn how to configure GST for bank charges in Business Central, including setup steps for bank accounts, bank charges master, and deemed value calculations.
• Stock Transfer: Learn how to process stock transfers under GST in India, including steps for transfer orders, GST calculation, and handling bonded warehouse scenarios.
• Transactions for Input Service Distributor: Describes how to process and record transactions for Input Service Distributor in Business Central, including purchase and return scenarios with GST calculations.

Videos, posts and code changes

Linked by a Haiku matcher with a grounding quote from the item’s summary (link/topics.ts); machine-generated.

• #10100 [Bug 644091] Separate B2B and B2C HSN summaries in GSTR-1 report (code change): “The GSTR-1 report now handles B2B and B2C HSN summaries separately”
• #11154 Fix AL0254 compile error in Stock Register for Job Work report (code change): “Stock Register for Job Work report in GST Subcontracting (IN) now compiles”
• #11648 [MAIN]: When receiving a payment from an SEZ (Special Economic Zone) customer under the “Without Payment of Duty” scenario, GST is being calculated incorrectly in the Bank Receipt Voucher in the Indian version. (code change): “Fixed GST calculation for Special Economic Zone customers in Bank Receipt”
• #8935 [Main]-[Escalated] [Strategic] [BC-IN]Online: Performance issue in General journal line from June 17th 2026 - 2606170030006074 (code change): “Removed a redundant CurrPage.SaveRecord() call from 31 India journal and voucher page extensions in the GST”
• #9199 [Main]-Incident 21000001049308 : [BC-IN] Purchase invoice with a deferral schedule and Non-availment GST is not functioning correctly (code change): “purchase invoice with Non-availment GST can now be posted when a default deferral template is configured”
• #9354 Incident 51000001074180 : [BC-IN] GST Component code alignment issue in Pay GST Calculation details. (code change): “GST Settlement calculation now processes components in the configured Return & Reco Sequence order”
• #9550 [Main]-[BC-IN] Purchase invoice with a deferral schedule and Non-availment GST is not functioning correctly (code change): “Purchase invoices with non-availment GST and deferral templates now post correctly”
• #9968 [BC-IN] TDS Amount Not Calculated on Initial TDS Section Selection in Bank Payment Voucher (code change): “TDS/GST/TCS amount now calculates correctly when tax section code”

Source: Microsoft Learn (CC BY 4.0). Descriptions are Learn’s own.