Indian SaaS invoices carry GST, and the first mistake in a revenue schedule is allocating the gross invoice. This worked example takes an ₹11,80,000 invoice that includes 18% GST, removes the tax from the transaction price, allocates the net ₹10,00,000 between onboarding and a cloud subscription by relative standalone selling price (SSP), and lays out the 12-month schedule. Every figure comes from a run of the Soluqube engine.
What is the contract in this example?
A customer is invoiced ₹11,80,000 including 18% GST, so the net consideration is ₹10,00,000. The contract runs 12 months from April 2026 and has two performance obligations: onboarding, recognised at a point in time, with an SSP of ₹1,50,000, and a cloud subscription, recognised ratably, with an SSP of ₹9,00,000.
Ind AS 115 applies to companies covered by the Ind AS roadmap under the Companies (Indian Accounting Standards) Rules, 2015, broadly listed companies and companies above specified net-worth thresholds. Check the current MCA notification for whether your entity is in scope.
Why is GST excluded from the transaction price?
Ind AS 115 paragraph 47 defines the transaction price as the consideration the entity expects to be entitled to, excluding amounts collected on behalf of third parties. Output GST is collected on behalf of the government, so the ₹1,80,000 is a liability, not revenue, and only ₹10,00,000 is allocated to the obligations.
The US has a parallel: ASC 606-10-32-2A lets an entity elect to exclude sales and similar taxes from the transaction price. The mechanics differ, but the outcome for this example is the same: allocate the net amount, not the invoice.
At invoice, the entry is:
| Account | Debit | Credit |
|---|---|---|
| Trade receivable | ₹11,80,000 | |
| Deferred revenue (contract liability) | ₹10,00,000 | |
| GST output liability | ₹1,80,000 |
GST is isolated from revenue; the ₹1,80,000 output GST liability arises on the invoice. It is not spread across the revenue schedule.
How is ₹10,00,000 allocated by relative SSP?
Each obligation receives the net transaction price multiplied by its SSP over total SSP of ₹10,50,000. Onboarding receives ₹1,42,857.14, rounded to the paisa. The subscription is listed last, so it receives ₹10,00,000 minus onboarding, ₹8,57,142.86, absorbing the rounding residual. The two sum to exactly ₹10,00,000.00.
Net transaction price: ₹10,00,000.00
| Obligation | SSP | Share | Allocated |
|---|---|---|---|
| Onboarding | ₹1,50,000 | 1,50,000 / 10,50,000 | ₹1,42,857.14 |
| Cloud subscription | ₹9,00,000 | 9,00,000 / 10,50,000 | ₹8,57,142.86 (absorbs residual) |
| Total | ₹10,50,000 | ₹10,00,000.00 |
The allocation guidance is ASC 606-10-32-28 to 32-41 and the corresponding Ind AS 115 paragraphs 73 to 86. Why the last obligation carries the residual is covered in the residual-cent post.
What does the 12-month schedule look like?
April 2026 recognises ₹2,14,285.71: all of onboarding plus the first ₹71,428.57 of subscription. Each month to February 2027 recognises ₹71,428.57. March 2027 recognises ₹71,428.59, carrying a ₹0.02 terminal remainder, so the deferred balance ends at ₹0.00 and total revenue is ₹10,00,000.00.
| Month | Onboarding | Subscription | Revenue | Deferred |
|---|---|---|---|---|
| Apr 2026 | ₹1,42,857.14 | ₹71,428.57 | ₹2,14,285.71 | ₹7,85,714.29 |
| May 2026 | — | ₹71,428.57 | ₹71,428.57 | ₹7,14,285.72 |
| Jun 2026 | — | ₹71,428.57 | ₹71,428.57 | ₹6,42,857.15 |
| ... | — | ₹71,428.57 each month | ||
| Jan 2027 | — | ₹71,428.57 | ₹71,428.57 | ₹1,42,857.16 |
| Feb 2027 | — | ₹71,428.57 | ₹71,428.57 | ₹71,428.59 |
| Mar 2027 | — | ₹71,428.59 | ₹71,428.59 | ₹0.00 (+₹0.02 remainder) |
| Total | ₹10,00,000.00 |
Each month's entry debits the contract liability and credits revenue. You can open the same contract as the sample "Example Software India" on app.soluqube.com.
What does this example not cover?
The engine applies one term to every obligation, recognises point-in-time obligations in month 1 with no delivery-date input, and spreads ratable months equally with no daily proration. It has no billing or contract-asset modelling, no usage-based or variable consideration, and no contract modifications.
GST is handled at invoice only; it is not a GST return or tax-liability schedule.
How can you try it on your own INR contracts?
Run your own onboarding and subscription split, on the net amount after GST, in the SSP allocation calculator to see each allocation and the schedule. See the relative SSP method and standalone selling price glossary entries, or send three contracts for a free 3-contract workpaper.
Is GST part of revenue under Ind AS 115?▼
No. Paragraph 47 excludes amounts collected on behalf of third parties from the transaction price. Output GST is collected for the government, so it is recorded as a liability when invoiced and never passes through revenue or the allocation.
Why does March 2027 recognise ₹71,428.59?▼
The subscription allocation of ₹8,57,142.86 does not divide into 12 equal paisa amounts. Eleven months take ₹71,428.57 and the final month absorbs the ₹0.02 left over, so the schedule ends at exactly ₹0.00.
Does the same allocation apply to a US contract?▼
The relative SSP method is the same under ASC 606. A US contract in this engine carries no GST; whether sales tax is excluded depends on the entity's ASC 606-10-32-2A election.