Tax engine - Configuration of tax type and tax rates
Configure tax types, their input parameters, components, and rates to support tax calculation and posting to G/L accounts.
Tax types
Different taxes can apply to a company. Examples of tax types include:
- GST: Goods and Services Tax.
- TDS: Tax deducted at source.
- TCS: Tax collected at source.
- WHT: Withholding tax.
Tax entities
Tax entities are tables associated with a tax type. They restrict the list of tables available in tax configuration lookups. A tax entity can be a master table or a transaction table.
- Examples of master tables: Customer, Vendor, Location, and Item.
- Examples of transaction tables: Purchase Line, Sales Line, Transfer Line, and Gen. Journal Line.
Input parameters
Tax attributes are input parameters for tax calculation or reporting. For example:
HSN Code: It's a parameter to find GST rate of an item and it can also be used as a parameter for filing of online tax to the government.
You can link an attribute to an existing table field or assign it to an entity as a generic attribute. Generic attributes work similarly to item attributes.
An attribute includes the following information:
- Name.
- Type: Option, Text, Integer, Decimal, Boolean, or Date.
- Visible on Interface: Controls whether the attribute appears in the Tax Information FactBox.
To map an attribute to a table field, specify Mapping Field Name for the entity mapping. Without a field mapping, the value is stored as a generic attribute for the entity record. For attributes of type Option, you can add or view the available values.
Tax components
Tax types can have components that are computed during tax calculation. Examples include:
- CGST: is a component of Tax Type GST.
- SGST: is a component of Tax Type GST.
- TDS: is a component of Tax Type TDS.
- E-Cess: is a component of Tax Type TDS.
Rate setup
For each tax type, define the columns used to find a tax rate and the values returned by that rate.
Rate columns can have the following types:
| Type | Description |
|---|---|
| Tax Attributes | Uses a tax attribute, such as HSN Code or GST Group Code, to find a rate. |
| Value | Uses a value mapped in the use case, such as From State or To State, to find a rate. |
| Range From and Range To | Defines a range with a lower and upper bound, such as a date range. The rate setup displays separate From and To values. Range From and Range To support one-sided ranges. |
| Component | Stores the component percentage returned by the rate. Component formulas use these percentages to calculate tax amounts. |
| Output Information | Stores additional values returned by the rate, such as a threshold amount. |
Hinweis
Use Allow Blank when a rate column can be blank. A blank value can provide a fallback when an exact match isn't found. For example, you can configure a GST rate without an HSN/SAC code when several HSN/SAC codes in one GST group share the same rate.
Tax rates
Define tax rates for combinations of the parameters in Rate Setup for a tax type. You can't create duplicate rate setups for the same combination.
To review the setup, open Tax Types, select a tax type, and choose Rate Setup or Tax Rates. In Rate Setup, use Sequence to control the order of columns and Visible on Interface to control whether a column appears in the Tax Information FactBox.