Zoho Books GST Setup Guide for Indian Businesses (2026)

This guide covers the main steps involved in configuring GST in Zoho Books, from entering GSTIN details and mapping HSN/SAC codes to setting up e-invoicing, reviewing GST reports, configuring TDS and understanding applicable state-specific Professional Tax requirements.

It also discusses relevant GST updates, including the rate changes effective from September 2025 and Phase 3 of HSN reporting in GSTR-1/1A, implemented from the May 2025 return period.

Zocoden Technologies is a certified Zoho Premium Partner, providing Zoho implementation and consulting services across India and the GCC. Our experience includes working with businesses in manufacturing, trading, professional services and technology.

Businesses that have purchased Zoho Books and need to configure GST before creating their first invoice.

Businesses reviewing their GST settings, tax preferences, invoices and reporting configurations.

CAs, accountants and finance managers responsible for configuring Zoho Books and managing business accounting workflows.

Companies moving from Tally to Zoho Books that need to transfer accounting data and configure their GST settings.

Finance teams investigating GSTR-1 mismatches, DRC-01C notices or e-invoice IRP rejections and looking to identify configuration-related issues.

What Changed in 2026 – GST E-Invoicing and Compliance Updates

Who Needs E-Invoicing in India?

E-invoicing is mandatory for registered businesses whose aggregate annual turnover exceeded ₹5 crore in any preceding financial year from 2017–18 onwards, subject to applicable exemptions. The threshold was reduced to ₹5 crore from 1 August 2023 under CBIC Notification No. 10/2023–Central Tax dated 10 May 2023.

Aggregate turnover is calculated on an all-India basis across all GST registrations associated with the same PAN. Once a business crosses the prescribed threshold in any relevant financial year, the e-invoicing requirement continues to apply even if its turnover falls below the threshold in subsequent years.

E-invoicing generally covers specified transactions, including B2B supplies, exports and supplies to SEZs. Certain categories of registered taxpayers are exempt under applicable GST notifications. Businesses should verify their eligibility before enabling e-invoicing.

E-Invoice Cancellation: Understanding the 24-Hour Rule

Ane-invoice can only be cancelled within 24 hours of IRN generation. To cancelwithin 24 hours: open the invoice in Zoho Books → Actions → Cancel E-Invoice →select a reason. This cancels the invoice in both Zoho Books and the IRPsimultaneously.

After24 hours, the Cancel E-Invoice option is no longer available. You must cancelmanually on the GST portal, then return to Zoho Books and use Actions → Mark asCancelled to update the status. Cancellation is irreversible — the IRN cannotbe reactivated. To re-issue the invoice, use Actions → Clone Invoice to createa new invoice, then push it to the IRP to generate a new IRN.

Ane-invoice can only be cancelled within 24 hours of IRN generation. To cancelwithin 24 hours: open the invoice in Zoho Books → Actions → Cancel E-Invoice →select a reason. This cancels the invoice in both Zoho Books and the IRPsimultaneously.

How to Set Up E-Way Bills in Zoho Books

An E-Way Bill is generally required for the movement of goods when the consignment value exceeds ₹50,000, subject to applicable GST rules, exceptions and state-specific provisions.

Zoho Books provides E-Way Bill functionality for eligible transactions, subject to the supported integration and account configuration.

Important: 180-Day E-Way Bill Document Date Rule (Effective 1 January 2025)

From 1 January 2025, the NIC E-Way Bill portal restricts E-Way Bill generation against documents such as invoices, bills of supply and delivery challans dated more than 180 days before the generation date. The portal also limits E-Way Bill extensions to 360 days from the original generation date.

To avoid delays, businesses should generate E-Way Bills promptly when goods are ready for dispatch and verify document dates before submission. If an old document exceeds the permitted period, consult your accountant about the appropriate documentation before proceeding.

How to Configure TDS in Zoho Books India

TDS(Tax Deducted at Source) in Zoho Books is configured under Settings → Taxes →TDS. Enable TDS, add your TAN (Tax Deduction Account Number) in organisationsettings, and configure which transactions attract TDS deduction. Zohopre-creates common TDS sections — you can add custom rates for specificscenarios.

Common TDS Sections and Rates

Withouta valid PAN from the vendor, TDS is deducted at the higher rate — 20% for mostsections, or 5% under Section 194Q. In Zoho Books, if a vendor's PAN is notentered, the system automatically applies the higher rate.

How TDS Works in Zoho Books

AssignTDS sections to vendors under their Tax Info tab. When you create a bill for aTDS-applicable vendor, Zoho calculates the TDS automatically and shows the netamount payable to the vendor. The TDS amount is tracked separately in a TDSPayable liability account. TDS is deposited via Challan ITNS 281 by the 7th ofthe following month.

ForSection 194Q (purchase of goods), TDS applies only on the amount above ₹50 lakhpaid to a single vendor in a financial year. For example, if you pay a vendor₹60 lakh in the year, TDS at 0.1% applies on ₹10 lakh (the amount above ₹50lakh) — not on the full ₹60 lakh.

Wherea vendor holds a Section 197 lower or nil deduction certificate, set a customTDS rate on that vendor matching the certificate rate. Record the certificatenumber and validity period in the vendor's notes for audit reference.

TDS Returns

Zoho Books generates the data required for Form 26Q (quarterly TDS return fornon-salary payments) and Form 16A (TDS certificates issued to vendors). Exportthe data from Zoho Books and import it into your TDS return filing software(such as TDS-RPU from the Income Tax Department website) to prepare and filequarterly returns.

Professional Tax in Zoho Payroll India — State-by-State Configuration

ProfessionalTax is a state-level levy (Article 276 of the Constitution) capped at ₹2,500per person per year. It is configured in Zoho Payroll India — a separatesubscription that integrates directly with Zoho Books. Select your state inZoho Payroll settings and the correct PT slabs, payment cycles, and returnschedules load automatically.

Maharashtra (PTRC + PTEC)

Maharashtra has two PT obligations: PTRC (Profession Tax Registration Certificate) foremployers deducting PT from employees, and PTEC (Profession Tax EnrolmentCertificate) for the business entity itself. Both are required for a companywith employees. Register at mahagst.gov.in within 30 days of becoming liable.

Male employees: nil up to ₹7,500/month; ₹175/month for ₹7,501 to ₹10,000; ₹200/monthabove ₹10,000 (₹300 in February). Female employees: nil up to ₹25,000/month(exempt since 1 April 2023); ₹200/month above ₹25,000 (₹300 in February).Employer PTRC return: annual if prior year liability below ₹50,000; monthlyotherwise.

Karnataka

Nil upto ₹25,000/month; ₹200/month above ₹25,000 — no February variation. Employerfiles monthly Form 5 and pays by the 20th of the following month.

Tamil Nadu (Half-Yearly)

TamilNadu PT is collected half-yearly by local bodies (e.g., Greater ChennaiCorporation). Slabs: nil up to ₹21,000; ₹180 (₹21,001-30,000); ₹425(₹30,001-45,000); ₹930 (₹45,001-60,000); ₹1,025 (₹60,001-75,000); ₹1,250 (above₹75,000) per half-year. Due dates: 30 September (April to September) and 31March (October to March).

Telangana

Nil upto ₹15,000/month; ₹150 for ₹15,001 to ₹20,000; ₹200 above ₹20,000. No Februaryspike. Pay by the 10th of each month via Form V.

West Bengal

Nil upto ₹10,000/month; ₹110 (₹10,001-15,000); ₹130 (₹15,001-25,000); ₹150(₹25,001-40,000); ₹200 above ₹40,000. Deposit within 15 days of the followingmonth.

Common GST Setup Mistakes
in Zoho Books — and How to Fix Them

Wrong GSTIN Entry

Asingle wrong character in the GSTIN causes every e-invoice to be rejected andbreaks GSTR-1 B2B matching. Verify your GSTIN digit-by-digit atgst.gov.in/searchtaxpayer. Also check that the GSTIN is active — a suspended orcancelled GSTIN causes identical symptoms to a wrong one. For multi-statebusinesses, verify each branch GSTIN is assigned to the correct state in ZohoBooks.

Outdated Tax Rates After GST 2.0

Ifyour Zoho Books still has 12% and 28% tax rates configured and assigned toitems, your GSTR-1 data will show incorrect tax amounts for supplies made after22 September 2025. Review every item's assigned tax rate against the currentCBIC rate notifications and update to 5%, 18%, or 40% as applicable. Archivethe old rates after all items are updated.

HSN Codes Entered as Free Text

Typingan HSN code directly rather than selecting from the dropdown means it will be rejected when GSTR-1 is pushed to the GSTN under the Phase-3 mandate. Go toItems → filter by items with free-text HSN → re-enter each code by selectingfrom the system dropdown. For large catalogues, use the bulk CSV re-import withcodes in the correct column.

Wrong Place of Supply Configuration

The place of supply determines whether CGST+SGST or IGST applies. A wrong statecode charges the wrong tax and misreports your GSTR-1. For B2B supplies, theplace of supply is the buyer's GSTIN state. For B2C supplies, it is the buyer'sdelivery address state. If you are using Branches, verify each branch's GSTINis assigned to the correct state — Zoho uses this to auto-apply intra orinter-state tax.

Filing GSTR-3B Without Reconciling GSTR-2B

Claiming ITC on purchases not in your GSTR-2B results in a DRC-01C notice (automaticmismatch intimation) and forced ITC reversal with 18% per annum interest. PullGSTR-2B between the 14th and 18th of each month and reconcile before filingGSTR-3B on the 20th. Do not skip this step.

Not Recording GST Payment After Filing

After paying GST on the portal, recording the payment in Zoho Books (GST Filing → GSTPayment → Record Payment) is a separate manual step. If you skip it, your GSTPayable balance remains on your balance sheet indefinitely — overstating yourliabilities and confusing your CA at every review. Record the payment the sameday you pay it on the portal.

Pushing GSTR-1 With Failed Transactions

When GSTR-1 is pushed and some transactions show "Failed" status, filingwith failed transactions creates gaps between your books and the GSTN database.Fix all failed transactions (missing GSTIN, invalid HSN, tax rate mismatch) andre-push before filing. Failed transactions that are filed without fixing willcause ITC mismatches for your buyers.