Understanding Taxes


Hi All,

May be it is very straight forward, but I don’t quite get how the taxes are being managed in the system.
I want each product to have a predefined tax associated with it which will be pulled along with the item in a document.

Now the problem I don’t quite get how the Item tax details and Tax Templates are linked. How do I actually pull a Tax Template for an Item?
And how do I actually use it in a document like Quote / SO? I am definitely missing something here, a help will be greatly appreciated.

I see I can pull a Tax Template while creating a document (Sales Other Charges), but is this can be product dependent ?

I thought this must have been discussed already and was trying to look in the groups posts, but yes, there were similar queries and thus answers, but nothing
yet makes it very clear.

Can anyone please explain this a bit or may be point to a rite post?

Thanks,
Dev

Hi Dev,

Taxes rates are based on Account first then item.

If you have 12% vat your account head (for eg VAT12) will have 12% rate. If you have different rates for items, then you will have to update it in the Item master.

Say you have one item which has a reduced rate of 6%, in the Item master for table Item Tax, select the tax head (VAT12) and set the rate for 6.

In your transaction, the system will calculate 12% for all items other than the one item and 6% for the one item.

Hope it helps. Please see Umair's blog on this.

http://erpnext.blogspot.in/2011/02/how-to-manage-quotations-in-erpnext.html

- Rushabh


-----------------------------------------------------
ERPNext - Business Operating System

W: https://erpnext.com
T: @rushabh_mehta

On 05-Apr-2012, at 4:01 PM, Dev wrote:


Hi All,

May be it is very straight forward, but I don't quite get how the taxes are being managed in the system.
I want each product to have a predefined tax associated with it which will be pulled along with the item in a document.

Now the problem I don't quite get how the Item tax details and Tax Templates are linked. How do I actually pull a Tax Template for an Item?
And how do I actually use it in a document like Quote / SO? I am definitely missing something here, a help will be greatly appreciated.

I see I can pull a Tax Template while creating a document (Sales Other Charges), but is this can be product dependent ?

I thought this must have been discussed already and was trying to look in the groups posts, but yes, there were similar queries and thus answers, but nothing
yet makes it very clear.

Can anyone please explain this a bit or may be point to a rite post?

Thanks,
Dev

Hi Rushabh,

I think the taxation part is missing things like this:

  • Item A is VAT 12% and is defined in the Item Table
  • Item B is VAT 5% and is also defined in the Item Table.

Now the system works well if the seller is selling on VAT rate, that to customers within the state but the things become more complicated when the seller is selling items to customers out of state.

Now if the seller is selling items to customer out of state then you have 2 options:

  1. Whether Sales is against C-Form
  2. Whether Sales is without C-Form (this case is similar to the above case where the VAT rate is charged as tax)

But in case 1 the rate of C-Form tax is applied to all the items whether Item A or Item B.


Now how can that be implemented in the system.


On Friday, April 6, 2012 10:58:03 AM UTC+5:30, Rushabh Mehta wrote:
Hi Dev,

Taxes rates are based on Account first then item.

If you have 12% vat your account head (for eg VAT12) will have 12% rate. If you have different rates for items, then you will have to update it in the Item master.

Say you have one item which has a reduced rate of 6%, in the Item master for table Item Tax, select the tax head (VAT12) and set the rate for 6.

In your transaction, the system will calculate 12% for all items other than the one item and 6% for the one item.

Hope it helps. Please see Umair’s blog on this.


- Rushabh


-----------------------------------------------------
ERPNext - Business Operating System

W: https://erpnext.com
T: @rushabh_mehta

On 05-Apr-2012, at 4:01 PM, Dev wrote:


Hi All,

May be it is very straight forward, but I don't quite get how the taxes are being managed in the system.
I want each product to have a predefined tax associated with it which will be pulled along with the item in a document.

Now the problem I don't quite get how the Item tax details and Tax Templates are linked. How do I actually pull a Tax Template for an Item?
And how do I actually use it in a document like Quote / SO? I am definitely missing something here, a help will be greatly appreciated.

I see I can pull a Tax Template while creating a document (Sales Other Charges), but is this can be product dependent ?

I thought this must have been discussed already and was trying to look in the groups posts, but yes, there were similar queries and thus answers, but nothing
yet makes it very clear.

Can anyone please explain this a bit or may be point to a rite post?

Thanks,
Dev

My understanding goes as per following.

1) ITEM A & B is pulled,

I have created a new tax called “mix tax” , I pull the same

respectively the tax calculations happens as per tax defined in item master.


This is within the state.

For outside state, I dont go by default item tax, but override it by pulling a seprate tax called CS…@2, this is against C form.

I write “against C Form” in instruction area… which gets shown in std print format, however, not gets printed in custom print format


developers may correct me if I am doing it in the right way ?

Regards,
Mahesh


On Mon, Apr 9, 2012 at 10:36 AM, Aditya Duggal <ad…@rigpl.com> wrote:
Hi Rushabh,

I think the taxation part is missing things like this:
  • Item A is VAT 12% and is defined in the Item Table
  • Item B is VAT 5% and is also defined in the Item Table.

Now the system works well if the seller is selling on VAT rate, that to customers within the state but the things become more complicated when the seller is selling items to customers out of state.

Now if the seller is selling items to customer out of state then you have 2 options:

  1. Whether Sales is against C-Form
  2. Whether Sales is without C-Form (this case is similar to the above case where the VAT rate is charged as tax)

But in case 1 the rate of C-Form tax is applied to all the items whether Item A or Item B.


Now how can that be implemented in the system.


On Friday, April 6, 2012 10:58:03 AM UTC+5:30, Rushabh Mehta wrote:
Hi Dev,

Taxes rates are based on Account first then item.

If you have 12% vat your account head (for eg VAT12) will have 12% rate. If you have different rates for items, then you will have to update it in the Item master.

Say you have one item which has a reduced rate of 6%, in the Item master for table Item Tax, select the tax head (VAT12) and set the rate for 6.

In your transaction, the system will calculate 12% for all items other than the one item and 6% for the one item.

Hope it helps. Please see Umair's blog on this.


- Rushabh


-----------------------------------------------------
ERPNext - Business Operating System

W: https://erpnext.com
T: @rushabh_mehta

On 05-Apr-2012, at 4:01 PM, Dev wrote:


Hi All,

May be it is very straight forward, but I don't quite get how the taxes are being managed in the system.
I want each product to have a predefined tax associated with it which will be pulled along with the item in a document.

Now the problem I don't quite get how the Item tax details and Tax Templates are linked. How do I actually pull a Tax Template for an Item?
And how do I actually use it in a document like Quote / SO? I am definitely missing something here, a help will be greatly appreciated.

I see I can pull a Tax Template while creating a document (Sales Other Charges), but is this can be product dependent ?

I thought this must have been discussed already and was trying to look in the groups posts, but yes, there were similar queries and thus answers, but nothing
yet makes it very clear.

Can anyone please explain this a bit or may be point to a rite post?

Thanks,
Dev


Hi,


I face a similar problem.

In our previous setup we had tax groups & tax classes. So VAT / CST / CST against form C  (tax group) will have multiple classes / rates (12.5% , 5% etc…)

Currently i believe we just cannot create a single invoice with items with different tax rates.

Ideally each item will have associated with it multiple groups and 1 class from each group. Based on this at the quotation / SO / Invoice / PO etc . stage automatic tax calculation can be achieved.

Also a monthly report could be generated which can give details of each tax classwise which will be useful for monthly returns and tracking form C etc.



On Thursday, April 5, 2012 4:01:58 PM UTC+5:30, Dev wrote:

Hi All,

May be it is very straight forward, but I don’t quite get how the taxes are being managed in the system.
I want each product to have a predefined tax associated with it which will be pulled along with the item in a document.

Now the problem I don’t quite get how the Item tax details and Tax Templates are linked. How do I actually pull a Tax Template for an Item?
And how do I actually use it in a document like Quote / SO? I am definitely missing something here, a help will be greatly appreciated.

I see I can pull a Tax Template while creating a document (Sales Other Charges), but is this can be product dependent ?

I thought this must have been discussed already and was trying to look in the groups posts, but yes, there were similar queries and thus answers, but nothing
yet makes it very clear.

Can anyone please explain this a bit or may be point to a rite post?

Thanks,
Dev
Hi,

You can create two different tax template for customer outside state. One for customers who gives c-form (2%) and other who don't (12.5%). You need not mention it on item level. but directly in other charges master only.

Also c-form related detail (like c-form registered - Yes / no) can be captured in customer master which will be pulled in transactions with other customer details.

Looking at c-form detail of customer, you can make out which tax master to be selected.
--
Thanks and Regards,
Umair Sayyed
um...@erpnext.com
www.erpnext.com

---- ERPNext - World's most affordable ERP ----


On Thu, Apr 26, 2012 at 9:58 PM, Tarun Gupta <gu...@gmail.com> wrote:
Hi,

I face a similar problem.

In our previous setup we had tax groups & tax classes. So VAT / CST / CST against form C (tax group) will have multiple classes / rates (12.5% , 5% etc...)

Currently i believe we just cannot create a single invoice with items with different tax rates.

Ideally each item will have associated with it multiple groups and 1 class from each group. Based on this at the quotation / SO / Invoice / PO etc . stage automatic tax calculation can be achieved.

Also a monthly report could be generated which can give details of each tax classwise which will be useful for monthly returns and tracking form C etc.



On Thursday, April 5, 2012 4:01:58 PM UTC+5:30, Dev wrote:

Hi All,

May be it is very straight forward, but I don't quite get how the taxes are being managed in the system.

I want each product to have a predefined tax associated with it which will be pulled along with the item in a document.

Now the problem I don't quite get how the Item tax details and Tax Templates are linked. How do I actually pull a Tax Template for an Item?

And how do I actually use it in a document like Quote / SO? I am definitely missing something here, a help will be greatly appreciated.

I see I can pull a Tax Template while creating a document (Sales Other Charges), but is this can be product dependent ?


I thought this must have been discussed already and was trying to look in the groups posts, but yes, there were similar queries and thus answers, but nothing
yet makes it very clear.

Can anyone please explain this a bit or may be point to a rite post?


Thanks,
Dev






I had requested earlier that if there is a 'C' Form transaction, there should some trigger / flag which will force following statement to appear in the print format (invoice) as "AGAINST "C" FORM"

is this possible ?

Regards,
Mahesh

On Fri, Apr 27, 2012 at 2:44 PM, Umair Sayyed <um...@iwebnotes.com> wrote:
Hi,

You can create two different tax template for customer outside state. One for customers who gives c-form (2%) and other who don't (12.5%). You need not mention it on item level. but directly in other charges master only.


Also c-form related detail (like c-form registered - Yes / no) can be captured in customer master which will be pulled in transactions with other customer details.

Looking at c-form detail of customer, you can make out which tax master to be selected.


Thanks and Regards,

Umair Sayyed
um…@erpnext.com
www.erpnext.com

---- ERPNext - World’s most affordable ERP ----



On Thu, Apr 26, 2012 at 9:58 PM, Tarun Gupta <gu...@gmail.com> wrote:
Hi,

I face a similar problem.

In our previous setup we had tax groups & tax classes. So VAT / CST / CST against form C (tax group) will have multiple classes / rates (12.5% , 5% etc...)

Currently i believe we just cannot create a single invoice with items with different tax rates.

Ideally each item will have associated with it multiple groups and 1 class from each group. Based on this at the quotation / SO / Invoice / PO etc . stage automatic tax calculation can be achieved.

Also a monthly report could be generated which can give details of each tax classwise which will be useful for monthly returns and tracking form C etc.



On Thursday, April 5, 2012 4:01:58 PM UTC+5:30, Dev wrote:

Hi All,

May be it is very straight forward, but I don't quite get how the taxes are being managed in the system.

I want each product to have a predefined tax associated with it which will be pulled along with the item in a document.

Now the problem I don't quite get how the Item tax details and Tax Templates are linked. How do I actually pull a Tax Template for an Item?

And how do I actually use it in a document like Quote / SO? I am definitely missing something here, a help will be greatly appreciated.

I see I can pull a Tax Template while creating a document (Sales Other Charges), but is this can be product dependent ?


I thought this must have been discussed already and was trying to look in the groups posts, but yes, there were similar queries and thus answers, but nothing
yet makes it very clear.

Can anyone please explain this a bit or may be point to a rite post?


Thanks,
Dev