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Invoicing, Taxation & Proration

Fype features an automated invoicing engine that calculates compliance taxation and handles complex mid-cycle subscription changes (upgrades and downgrades) with proration credits.

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GST Compliance & Tax Splitting

Fype calculates and applies Indian Goods and Services Tax (GST) automatically.
  • Standard Tax Rate: 18% is applied to taxable products (SAC Code: 997331).
  • Precision Calculation: Calculations are completed in Paise (subunits) to avoid floating-point rounding errors: Taxable Value=⌊Base Amount1.18⌋\text{Taxable Value} = \lfloor \frac{\text{Base Amount}}{1.18} \rfloor Total Tax Amount=Base Amount−Taxable Value\text{Total Tax Amount} = \text{Base Amount} - \text{Taxable Value}

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State-Boundary Tax Routing

Fype determines how to split GST based on the merchant’s corporate location versus the customer’s state boundary:
  • Intra-state (Merchant State == Customer State): Splits the total tax equally between CGST (Central GST - 9%) and SGST (State GST - 9%).
  • Inter-state (Merchant State != Customer State): Allocates the entire 18% tax amount to IGST (Integrated GST).
All generated invoices automatically populate these splits in their tax_details metadata payload.

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Mid-Cycle Plan Changes (Proration)

When a customer upgrades or downgrades their subscription mid-cycle, Fype calculates the unused credit on the existing plan, calculates the cost of the new plan for the remaining time in the billing period, and generates a net balance adjustment.

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Proration Mathematics

  1. Unused Credit (Old Plan): Credit=Old Plan Price×Remaining Time in Current Billing PeriodTotal Time in Current Billing Period\text{Credit} = \text{Old Plan Price} \times \frac{\text{Remaining Time in Current Billing Period}}{\text{Total Time in Current Billing Period}}
  2. Prorated Cost (New Plan): Cost=New Plan Price×Remaining Time in Current Billing PeriodTotal Time in Current Billing Period\text{Cost} = \text{New Plan Price} \times \frac{\text{Remaining Time in Current Billing Period}}{\text{Total Time in Current Billing Period}}
  3. Net Adjustment: Adjustment=New Plan Cost−Old Plan Credit\text{Adjustment} = \text{New Plan Cost} - \text{Old Plan Credit}
  • Upgrade (Net positive adjustment): Fype creates an invoice representing the difference. If a card or mandate is linked, Fype attempts to collect the balance immediately.
  • Downgrade (Net negative adjustment): Fype creates a negative invoice (Credit Note) and applies the surplus balance to the customer’s credit balance (which is automatically deducted from future invoice cycles).
Fype also synchronizes the updated plan with the underlying gateway (e.g. Razorpay subscription modification APIs) to ensure future automated billing periods charge the correct rate.

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API Examples

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Change a Subscription’s Plan

Upgrade or downgrade a customer’s subscription. Fype will calculate proration and return the updated subscription and the generated adjustment invoice.

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Response Payload Snippet