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Shopify India stores collect a single GST percentage per order but must file GSTR-1 with a CGST+SGST vs IGST split derived from each order's ship-to state under IGST Act Section 10 — while gateway payouts from Razorpay, PayU, or Cashfree arrive net of MDR, GST on MDR, and refund reversals that do not appear in the Shopify order export.
Run a three-way match: Shopify order export (gross revenue, tax, shipping, discount), gateway settlement report (MDR, GST on MDR, refunds, payout batches), and bank credit. Derive CGST/SGST/IGST per order from ship-to state compared to seller's registered state. Gross up the gateway net to true revenue, book MDR as expense with 18% ITC, and reverse refund-period output tax against the original sale period.
Shopify connector pulling order, tax, and shipping lines; gateway adapters for Razorpay, PayU, Cashfree payouts; seller-state master with intra-state vs inter-state logic; composite-supply rules for shipping GST; refund-period reversal logic keyed to original sale period.
A GSTR-1 filing with invoice-level SGST vs IGST split matching the ship-to state rule, a reconciled gateway payout with MDR ITC claimable, and refund reversals applied to the correct period — with no place-of-supply mismatches or output-tax overstatement.
A Shopify India store selling apparel ships to customers in 18 states. Each week the PayU payout lands as a single bank credit, net of MDR and GST on MDR, covering orders with a mix of intra-state and inter-state shipments. Shopify’s admin shows order-level tax collected, but not the SGST versus IGST split required for GSTR-1. This article is for finance teams at Indian D2C brands running Shopify storefronts with PayU, Razorpay, or Cashfree as the payment rail.
What Shopify India GST Reconciliation Involves
Shopify India GST reconciliation is the process of matching three data sets for each sales period: the Shopify order export (gross revenue, tax collected, shipping, discounts), the gateway settlement report (MDR deductions, GST on MDR, payout batches), and the bank statement (actual credit received). The output is a tax split — CGST + SGST versus IGST — that feeds GSTR-1 at invoice-level detail.
The complication unique to India is that Shopify’s native tax configuration treats GST as a single percentage on the order. The split between CGST, SGST, and IGST is not stored explicitly in most Shopify exports — it must be derived from the ship-to state compared with the seller’s registered state under Section 10 of the IGST Act. For a seller registered in Maharashtra, a Delhi customer generates 18% IGST while a Pune customer generates 9% CGST + 9% SGST on the identical product.
How Shopify Gateway Settlement Reconciliation Works
Deriving SGST vs IGST from Ship-To State
The first step is to classify each order as intra-state or inter-state. The seller’s registered GSTIN carries a state code (first two digits). If the shipping address state code matches, the order is intra-state and the 18% (or 12%, 5%) rate splits equally between CGST and SGST. If the codes differ, the full rate is IGST. Shopify’s order export contains the shipping address — the reconciliation logic reads the state from that field and applies the split automatically. This classification must happen at order level, not at aggregate level, because a single settlement batch contains both types.
Grossing Up the Gateway Payout
Razorpay, PayU, and Cashfree deduct MDR from the gross transaction value before payout. The reconciliation step is to reconstruct gross revenue from the net settlement using the gateway’s fee report. For a ₹5,000 order with 2% MDR and 18% GST on MDR, the deductions are ₹100 MDR + ₹18 GST on MDR = ₹118, and the net payout is ₹4,882. Revenue recognised in Tally must be ₹5,000 (with CGST + SGST or IGST as applicable), not ₹4,882. The ₹18 GST on MDR is ITC-eligible against the gateway’s tax invoice.
Matching Refunds to Original Orders
Shopify refunds initiated through the admin flow through the gateway back to the customer’s card or UPI. The refund appears as a negative line in the gateway report, typically in a settlement cycle later than the original sale. The reconciliation must match the refund back to the original order, reverse the revenue and output tax in the refund period’s GSTR-3B, and adjust GSTR-1 via a credit note if the refund crosses a filing period. Missing this mapping leaves output tax overstated in the original period.
Shopify India Gateway Settlement Reference
| Gateway | Default Settlement Cycle | Typical MDR | GST Invoice Source |
|---|---|---|---|
| Razorpay | T+2 cards, T+1 UPI | 2% cards, 0 to 0.4% UPI | Razorpay dashboard — monthly tax invoice |
| PayU | T+1 to T+2 | 1.75% to 2.5% cards | PayU dashboard — monthly commission invoice |
| Cashfree | T+1 standard | 1.75% to 2% cards | Cashfree dashboard — monthly GST invoice |
| Stripe India | T+7 | 2% + ₹3 per transaction | Stripe dashboard — consolidated monthly invoice |
India Compliance Angle: GSTR-1 Place of Supply
For Shopify sellers, GSTR-1 Table 7B captures inter-state B2C supplies where the invoice value is below ₹2.5 lakh — reported in aggregate by state and rate. Intra-state B2C supplies consolidate into Table 7A. Inter-state supplies above ₹2.5 lakh must be reported invoice-wise in Table 5A. The place-of-supply field in each table is the ship-to state, not the billing state. Applying the billing state instead is a recurring error for Shopify stores where billing and shipping addresses differ — common in gifting, corporate orders, and marketplace drop-ship. A correction through an amendment in the next period’s GSTR-1 is possible but creates audit exposure in a scrutiny assessment.
Finance teams using payment gateway reconciliation tooling can ingest Razorpay, PayU, and Cashfree reports in the same pipeline and match each payout to Shopify orders by order ID. GST reconciliation software extends this by deriving CGST + SGST versus IGST splits from the ship-to state at order level, feeding the split directly into GSTR-1 format. The CBIC portal publishes the place-of-supply rules under Section 10 that govern this classification.
The following questions address the GST and gateway settlement issues Shopify India merchants encounter most frequently.