Taxes defines tax rates applied on sales, purchases, and other transactions. Configure rate, tax type, applicability, and opening balance for each tax.
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Each tax is a ledger account with a Rate, Tax Type, and optional membership in a Tax Group. On sale and purchase bills, expenses, and vouchers, tax lines debit or credit the tax account according to Applicable To (Taxable Amount, Tax Amount, Base Value, Per Unit) and whether the tax is output or input.
Display name in Bills is the label printed on invoices. Non Creditable marks input tax that cannot be claimed as credit. Taxes can be chained through Applicable To Tax for compound tax calculations.
Tax amounts are resolved from the item's Tax Class — which maps directly to individual taxes for the supply type — then posted on approve of sale invoices, purchase invoices, credit/debit notes, expenses, and import tax vouchers. A tax's Tax Group is used only to group and total related taxes in reports. Reverse-charge scenarios use RCM Tax instead of standard purchase tax accounts.
Connected reports: Tax Report, Tax Reports, GSTR1, GSTR2, GSTR3B, Tax Report India, Country Specific Tax Reports, Bill Wise Tax Wise Purchase.
Where are taxes used?
On sale and purchase bills, expenses, and tax reports. Tax groups combine multiple tax components.
Can I change tax rate on old invoices?
Approved documents keep saved tax. New rate applies to new entry only.
What is RCM tax?
Reverse charge mechanism taxes — configure in RCM Tax when applicable.
How do taxes post to GL?
Tax accounts map through transaction account map and post on bill/expense approve.
Which report shows tax liability?
Tax Reports and country-specific GST/VAT reports.