FrontAccounting forum — paid tax entering problem

Re: paid tax entering problem

2013-07-20T20:28:33Z

anoopmb,

I cannot claim to be an authority of matters of taxation, and it must be said that I am new to FA as well.
However, I believe that my earlier notes about the setting-up of the General Ledger Control Account, Tax system and Items to simply follow a Sales tax (in your case at 5%) would allow you to report upon your sales transactions in both detail and summary forms.

As a further suggestion, personally I have created a separate "dummy company" in my FA system which allows me to try different things when I am trying to work-out how to set-up certain things, or when certain new products or procedures begin in the business, and as I am not working on live production data, it doesn't matter if I make a mistake, or if the FA system does not at first behave as I would expect or want it to.

Xero

Re: paid tax entering problem

2013-07-20T05:39:38Z

hi thanks very much xero am anoop from india and am dealing with pharmaceuticals we purchase items from a manufacturer @ 1% interstate tax against c-form, also i have modified fa according to my needs to include expiry ,batch,MRP and other things. we sell our product @5% VAT as tax on MRP.

Lets say we purchase item A at a cost of 50 rupees and @1 tax so total we pay 50.50 rupees to supplier

the purchase tax go to the their state government as it is a interstate purchase

MRP (maximum Retail Price) of the item A is 105 rupees

VAT calculated as Tax on MRP that is ( [vat] * [mrp] ) / (100 + [vat] ) = (5*105) /( 100+5) = 5 rupees

We sell item A to the retailer at a rate of 70 rupees plus VAT(tax on MRP) that is 5 rupees So total we get 75 rupees

and at next month we pay total tax amount (here 5 rupees) to our state government

so i have to get 5 rupees in my tax report to submit it to my chartered accountant

i have created one account in chart of accounts as interstate purchase @ 1% and it is used for purchase

thanks in advance

Re: paid tax entering problem

2013-07-19T19:55:31Z

I am sure that there will be more wise and experienced people in this forum who can give you further advice about this.

However, in my experience, when using the Tax System in FA, it is crucial that the set-up is done in such a way as to properly and correctly record your transactions in accordance with the taxation laws and rules that apply to you. In my case, I have to follow VAT in the UK, which operates on the basis much as you have described in your above post (ie in simplest and most basic terms, you pay the net difference to the tax authorities, of what you have paid to your suppliers and collected from your customers).

If however (as you appear to suggest above) that you wish simply to record a tax on Sales only, then I suggest that you set-up a separate tax control account for Sales-Tax only in your General Ledger, Set-up the Tax in Tax module, and then set any Items appropriate for those Sales which attract the sales tax. You may of course if you wish, also separately follow Purchase taxes in the same way if desired, but this would IMHO ideally need to use a separate General Ledger control account, and further entries in the Tax Module, and relevant Item entries as well.
Once all the set-up is done in such a way (recommend that you try to follow the Wikki), then you will be able to accurately report on each of the taxes that you wish to follow with the tax reports and other relevant reports.

Perhaps if you can tell the forum where-abouts in the world you are, then there may well already be people here who have a more intimate knowledge of your local taxation requirements and how to set them up in FA.

Hope that helps

Xero

Re: paid tax entering problem

2013-07-19T04:20:33Z

thanks for reply
i have to submit the tax report for every month to my ca but when i print my tax report it shows unwanted entries and wrong values
ie;
input tax if it is purchase tax i am already paid during purchase from my supplier

Re: paid tax entering problem

2013-07-18T17:46:31Z

Personally, I would simply enter a journal,

ie. Debit Tax Control Account - Credit Bank Account

(this assumes that I owe the tax authorities monies rather than reclaiming tax from them, in which case the journal would be the opposite of the above)

Xero

paid tax entering problem

2013-07-18T17:27:19Z

am confused how to enter sales tax paid for the last month sales in current month? please help me and which account i have to use ?