Purchase Tax vs Sales Tax

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erpnext has sales tax masters & purchase tax masters, but in the item master there is only one place to enter the appropriate tax code.

Does this mean that apart from manual override for each item at time of sale, that the Purchase tax code & the sales tax code must be the same?

This would also mean that the purchase and sales tax rate would need to be the same?

Is it possible as a default to enter a Sales Tax code that is different from the purchase tax code ?




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Hello Brian,

You can also enter Purchase Taxes applicable on item in the Item Tax table.

Creating separate tax ledger or using common for both sales and purchase is dependent on your preference. Both the option is workable.

If you create separate accounting ledger, then both Sales and Purchase taxes should be added in Item master. Whereas, in the Sales and Purchase tax master, only relevant tax ledger will be selected.

If using common tax ledger, same tax rate will be pulled when selling or buying item.

Hope this helps.


On Mon, Oct 7, 2013 at 1:29 PM, Brian Walsh <br...@gmail.com> wrote:

erpnext has sales tax masters & purchase tax masters, but in the item master there is only one place to enter the appropriate tax code.

Does this mean that apart from manual override for each item at time of sale, that the Purchase tax code & the sales tax code must be the same?

This would also mean that the purchase and sales tax rate would need to be the same?

Is it possible as a default to enter a Sales Tax code that is different from the purchase tax code ?




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Thanks and Regards,

Umair Sayyed
www.erpnext.com

I am still not entirely clear on this.
I have seperate tax ledgers created
To have a different purchase tax to the sales tax for the same item -
Are you saying that you would

enter two taxes in the item master - one for sales tax and one for purchase tax
the erpnext would only use the one appropriate tax depending whether the transaction was a sale or a purchase ?



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Brian,

You got it right.

In the item master, both Sales and Purchase tax ledger will be selected. For example:

Item A
Sales Tax - 10%
Purchase Tax - 12%

When making Sales transaction, Item's tax rate applicable will be pulled from Item master for tax ledger selected in Sales Tax and Charges master.

Sales Tax and Charges Master:
Sales Tax - 10%

Same way, in Purchase transaction, item's tax rate applicable will be pulled from item master for ledger selected in Purchase Tax and Charges master.

Purchase Tax and Charges Master:
Purchase Tax - 12%


On Mon, Oct 7, 2013 at 3:07 PM, Brian Walsh <br...@gmail.com> wrote:
I am still not entirely clear on this.
I have seperate tax ledgers created
To have a different purchase tax to the sales tax for the same item -
Are you saying that you would

enter two taxes in the item master - one for sales tax and one for purchase tax
the erpnext would only use the one appropriate tax depending whether the transaction was a sale or a purchase ?



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To unsubscribe from this group and stop receiving emails from it, send an email to erpnext-user-forum+un…@googlegroups.com.

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--
Thanks and Regards,
Umair Sayyed
www.erpnext.com
It is still not working as I would expect.
I do have an entry in Purchase Tax Master

I have added a purchase tax & a Sales tax in the item master for the items
when selecting the item in a purchase order, no tax information is brought across 
I still have to manually select the tax.

unless there is a default tax selected in the purchase tax master, 
then all items inherit the default tax rate overriding the individual item rates
I must be missing something




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To enter tax amounts in the purchase transaction, either you should create Purchase Tax Master or enter manually.

Once you create Tax Master, all the taxes entered in the Master will be fetched in the transaction. While calculation, tax rate will be override by the tax rate defined in item master, the same is applicable if you enter taxes manually as well.

If you want to apply taxes mentioned in the item master always, you can make a Purchase Tax Master with all the taxes (applicable to purchase cycle) with zero rate. That way, tax rates mentioned in item master will always be applied while calculation and you do not have to select tax codes every time.


On 07-Oct-2013, at 5:30 PM, Brian Walsh wrote:

It is still not working as I would expect.
I do have an entry in Purchase Tax Master

I have added a purchase tax & a Sales tax in the item master for the items
when selecting the item in a purchase order, no tax information is brought across 
I still have to manually select the tax.

unless there is a default tax selected in the purchase tax master, 
then all items inherit the default tax rate overriding the individual item rates
I must be missing something





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