The Beginners Guide to Understanding Taxes in Bagisto

Sanjana Singh

1 May 2026

Understanding taxes in an e-commerce store can be confusing, especially for beginners.

With the right setup, managing taxes becomes much simpler.

Many store owners struggle to set the correct tax rates for different regions.

This can cause pricing errors, compliance issues, and a poor customer experience.

Here, we explain how to create, configure, and manage tax in Bagisto.

This helps you apply the right tax rules and manage your store more efficiently.

Set up Taxes In Bagisto

Click on Settings>> Taxes >> Tax Rates >> Create Tax Rate as shown in the image below.

Enter the identifier, country, state, zip code, and tax rate.

Note: You can also define a ZIP code range so that the tax is applied only within the specified area.

After setting the details, click on Save Tax Rate.

To create a new Tax Category, add the tax code, name, and description, and select the tax rate as per your requirement.

Then click on Save Tax Category.

All the tax rates will be visible under the Tax Rates option, as shown in the image below.

In this case, the tax amount is not included in the product or service price.

To apply excluding tax in Bagisto, go to Configure >> Taxes, as shown in the image below.

Now select your tax category.

Tax categories are classifications for different types of taxes, such as sales tax, value-added tax, or excise tax.

They are used to organize and apply tax rates to products or services.

1) Select the calculation setting, i.e., calculation based on shipping address, billing address, or shipping origin using shipping methods.

2) Select the Product prices, i.e., excluding tax

3) Select the Shipping Prices, i.e., excluding tax

Now enter the Default Destination Calculation and select your country, state & pin code.

1) Select the Display Prices to excluding Tax

2) Select the Display Subtotal to excluding Tax

3) Select the Display Shipping Amount to excluding Tax

1) Select the Display Prices to excluding Tax

2) Select the Display Subtotal to excluding Tax

3) Select the Display Shipping Amount to excluding Tax

Now, click on the Save Configuration button.

As you can see, the tax amount is not included in the product or service price.

A tax-inclusive rate means a price that already includes taxes.

For example, the price of a service charged by a merchant.

Now, select your tax category.

Tax categories are classifications for different types of taxes, such as sales tax, value-added tax, or excise tax.

They are used to categorize and apply tax rates to manage products or services.