Tax Rules & Tax Templates

A tax rule allows you to select sales or purchase tax for a specific item or item group or customer type, etc. and apply a tax template if those conditions / filters are met. So you can apply different tax rates for different items - and separate taxes for sales and purchases and separate taxes it sales country is different. For example export sales may have different tax rate than import purchases for same item. So far so good.

However, the Sales Taxes and Charges Template does NOT allow you to apply the rate to an item amount. It can only be applied to a Net Total - which is sum of all item amounts. The moment the tax rule for 1 item is triggered / applied - that appropriate template is applied to the whole order and now all items get taxed by that Sales Tax template.

Strangely ERPNext also allows a sales tax template to be applied to Item Quantity but NOT to item amount. I can understand that there may be an import tax based on the quantity (usually $/kg) but the option is not amount/item qty it is rate per item qty. So the tax calculated for 1 qty at rate of 2% is 0,02. 1 case of 10 bags will also result in a TAX of 0.02 (not rate). 10 bags will result in a tax of 2.

Dont know if the Item Qty choice is a bug - but for sure ERPnext needs to have option to apply a Sales tax template to an Item Total (item amount) - qty* price = amount. Tax on this amount. Then only tax rule filter by item would work. If a sales tax template can only be applied to Net Total of an entire order why bother creating a tax rule filter of applying rule only to item?

Am I missing something or there is another way of doing this? Applying a tax at the item level - will apply the same tax to the item no matter where / how purchased and where / how sold. The account head will also be the same…

Something not right here… Appreciate your thoughts…

Did you try Item Taxes Template ?

Set it on the time directly in section Item taxes

Then when added to quote, order or invoice

@FHenry - thank you much for your prompt reply. If you select the item tax template - it will apply that tax for all sales and purchase transactions of that item? That was the purpose to attempt to use a tax rule - so that you could automatically apply different tax rates to the item based on the conditions - whether for export customer or domestic customer, etc…