How to Set Up Razorpay, COD and GST on Your Shopify Store

Last month, a founder in Pune messaged us in a panic. She’d launched her ethnic wear brand on Shopify two weeks earlier, taken 47 orders, and then realized she hadn’t set up GST invoicing. Her CA was not pleased. Neither was she when she had to manually create invoices for every single order.

Here’s the thing. Setting up a Shopify store is easy. Setting it up correctly for India? That’s where most people stumble. If you’re wondering how to set up Razorpay on Shopify India, you’re already asking the right question. But Razorpay is just one piece of the puzzle.

Every Indian D2C store needs three things configured properly before taking real orders: a payment gateway that handles UPI and cards, a COD option that doesn’t destroy your margins with returns, and GST-compliant invoicing that keeps your accountant happy. Miss any of these, and you’re building on a shaky foundation.

I’ve set up this exact stack for over 80 stores in the past two years. Let me walk you through exactly how we do it, including the steps most tutorials conveniently skip.

Part 1: Setting Up Razorpay on Your Shopify Store

Razorpay is the default choice for most Indian Shopify stores, and honestly, that’s the right call. PayU and Cashfree work fine, but Razorpay’s dashboard is cleaner, their support is better, and their Shopify app has fewer bugs. I’ve tested all three extensively. Razorpay wins.

Step 1: Create Your Razorpay Account

Head to razorpay.com and sign up with your business email. You’ll need your PAN, Aadhaar, bank account details, and GST number (if registered). The verification process takes 24-48 hours for most businesses, though I’ve seen it done in 6 hours for straightforward cases.

One thing people miss: make sure your bank account name matches your business name exactly. Mismatches cause delays. We had a client in Jaipur whose account was stuck in verification for a week because his bank had “Pvt Ltd” and his PAN had “Private Limited.”

Step 2: Install the Razorpay App on Shopify

Go to the Shopify App Store and search for “Razorpay.” Install the official app. There are a few knockoffs, so make sure it’s published by Razorpay Software Private Limited. The app is free; Razorpay makes money on transaction fees (2% for most domestic transactions).

After installation, you’ll need to connect your Razorpay account. The app will ask for your API keys. You’ll find these in your Razorpay Dashboard under Settings → API Keys. Copy both the Key ID and Key Secret. Don’t share these with anyone except your developer.

Step 3: Configure Payment Methods

This is where the Shopify India payment gateway setup gets interesting. In your Razorpay dashboard, enable the payment methods you want:

UPI is non-negotiable. Over 60% of our clients’ transactions come through UPI. Enable both UPI Collect and UPI Intent (the latter opens the customer’s UPI app directly on mobile, which is much smoother).
Debit and credit cards still matter, especially for orders above ₹2,000. Enable both.
Wallets like Paytm, PhonePe, and Amazon Pay are worth enabling, though they account for maybe 10-15% of transactions on most stores we manage.
Net Banking should be enabled. Some customers, especially older ones buying gifts, still prefer this.
If your average order value is above ₹5,000, definitely enable EMI. Razorpay offers no-cost EMI options that can boost conversions significantly.

Step 4: Test With a Real Transaction

Never skip this. Place a test order on your own store using a real payment method. I usually do a ₹1 test product. Check that the payment goes through, the order appears in Shopify, and the money lands in your Razorpay dashboard. Then process a refund to make sure that works too.

For a deeper dive into Razorpay configuration options, check our complete Razorpay on Shopify guide.

Part 2: Enabling Cash on Delivery (COD) Without Killing Your Margins

Here’s the uncomfortable truth about COD: Indian customers love it, and it will probably increase your conversion rate by 30-40%. But it will also increase your return-to-origin (RTO) rate. The trick is setting it up smartly.

Enable COD in Shopify Admin

Go to Settings → Payments → Manual payment methods → Cash on Delivery. Enable it. That’s the easy part.

Set Pin Code Availability

Don’t offer COD everywhere. Seriously. Some pin codes have RTO rates above 40%, and you’ll lose money on every order. Use a pin code serviceability app (we like “Pincodes” by Jeebly or the COD features built into Shiprocket’s app) to restrict COD to serviceable and reliable pin codes.

Most of our Shopify COD setup India projects involve creating three tiers: pin codes that get COD by default, pin codes that require prepaid only, and pin codes you don’t ship to at all. This single change reduced RTO by 22% for a footwear brand we worked with in Chennai.

Add COD Verification to Reduce Fake Orders

This is the step most tutorials skip, and it costs people money. Install a COD verification app that sends an OTP or confirmation WhatsApp message after a COD order is placed. If the customer doesn’t confirm within 30 minutes, the order gets flagged for manual review.

Apps like “COD Confirmation” or “Kwik COD” handle this well. Yes, there’s some friction. But fake COD orders, placed by competitors, bored teenagers, or people who change their mind, cost ₹150-300 each in shipping and handling. Verification cuts these by 60-70%.

Incentivize Prepaid Orders

Offer a ₹50-100 discount on prepaid orders. Display it prominently on product pages and checkout. “Pay online and save ₹75” works surprisingly well. We’ve seen this shift the prepaid-to-COD ratio from 40:60 to 55:45 on several stores. Over thousands of orders, that’s lakhs saved in RTO costs.

This is one of those CRO strategies that pays for itself within the first month.

Set Up Auto-Confirmation SMS

Use a tool like MSG91 or your shipping provider’s built-in SMS feature to send order confirmations immediately. Include the order details, expected delivery date, and a link to track. Customers who forget they ordered something are your biggest RTO risk, and regular communication reduces this.

Part 3: GST-Compliant Invoicing That Won’t Annoy Your CA

If you’re selling taxable goods in India (and you probably are), you need GST invoices. Shopify doesn’t generate these by default, at least not in a format that satisfies Indian tax requirements. You’ll need an app.

Install a GST Invoice App

The two apps we recommend are “GST Invoice India” by Jeebly and “Easy Invoice+” by Softpulse. Both generate invoices that include all the mandatory fields: your GSTIN, the customer’s GSTIN (for B2B), HSN codes, tax breakdowns, and invoice serial numbers.

The Jeebly app costs around ₹249/month. Worth every rupee, and cheaper than paying your CA to fix problems later.

Configure Your GSTIN and Tax Rates

In the app settings, enter your GSTIN and business address. Then set up your tax rates. This is where it gets slightly complicated:

IGST applies when you ship to a customer in a different state than your registered business address. Standard rates are 5%, 12%, 18%, or 28% depending on your product category.
CGST + SGST applies for same-state transactions. Each is half the total GST rate (so for an 18% GST product, it’s 9% CGST + 9% SGST).

Most apps auto-detect which applies based on shipping address. But double-check with a few test orders. We had a client whose app was charging IGST on all orders because the state field wasn’t mapping correctly. They had to file corrections for three months of invoices.

Set Up HSN Codes

Every product category has an HSN (Harmonized System of Nomenclature) code. Your CA can give you the right codes, or you can look them up on the CBIC website. Enter these in your product metafields or in the invoice app settings. Getting this wrong causes problems during GST filing.

Test the Full Flow

Place a test order and check the generated invoice. Verify: your GSTIN is correct, the tax breakup shows correctly, the invoice number follows your series, and a PDF downloads/attaches properly. Email this to your CA and ask them to confirm it’s compliant. Five minutes of verification now saves hours of pain later.

For more complex setups, like stores with multiple GST registrations or B2B pricing, you might need custom Shopify API integration.

Common Setup Mistakes We See Every Month

After doing this for years, I can almost predict where stores go wrong:

Using Razorpay’s test mode in production sounds obvious, but we’ve seen stores lose orders because they forgot to switch to live mode. Always verify with a real ₹1 transaction.
Offering COD on high-value orders is asking for trouble. COD on a ₹15,000 order rarely ends well. Set a COD limit. We recommend ₹3,000-5,000 for most product categories.
Not backing up invoice serial numbers causes headaches. If your app crashes or you switch apps, you need continuity in your invoice numbering. Export your invoice data monthly.
Ignoring failed payment webhooks means lost sales. Razorpay sends webhook notifications for failed payments. Set up a system (even just email alerts) to catch these. Some failed payments are customers who want to retry, so reach out to them.
Not testing on mobile is a common oversight. Over 75% of your customers will checkout on their phones. Test the entire payment flow on mobile, including UPI app redirection. A well-designed mobile checkout experience can significantly boost your conversion rate.

Your Quick-Reference Setup Checklist

Print this or screenshot it. Check off each item before you consider your store “launch ready”:

Razorpay account verified and connected to Shopify
UPI, cards, and wallets enabled in Razorpay dashboard
Test transaction completed successfully (payment + refund)
COD enabled with pin code restrictions
COD verification system active
Prepaid discount incentive live on store
GST invoice app installed and configured
GSTIN and HSN codes entered correctly
Tax rates verified (IGST vs CGST+SGST logic working)
Test invoice reviewed and approved by CA
Full checkout tested on mobile device

Missing even one item from this list can cause problems. Sometimes small irritations, sometimes costly mistakes. The Pune founder I mentioned at the start? She’s now running smoothly, doing ₹8-10 lakh monthly. But she spent a weekend manually creating 47 invoices to get there. Don’t be that founder.

Get the setup right from day one. Your future self and your CA will thank you.

Want us to set this up on your store? Book a free Shopify audit →

How to Set Up Razorpay, COD and GST on Your Shopify Store