• Registered: 05/01/2013
  • Posts: 10

Topic: How to setup multiple vat types in Indian Chat of Accounts

Hi, Front accounting is really incredible erp software & I am really surprised how i could not discovered it earlier. I have spent well amount of time on reading the features of this product in this forum and stocked at one point. What i want to achieve is described below.

I from India and also installed Indian Chat of Accounts. On the taxation issue, I purchase some products with VAT @ 5 % and for some products VAT @ 13.5 %. Under certain circumstances (As i have SHRIN no, not TIN no), i want to sell all the products with a VAT @ 1% . Can i accomplish this ? Also i should have a provision to sell VAT @ 5 % & vat @ 13.5 % .

Further to this, is it possible to have drop down box feature for entering tax while purchasing and selling products (by choosing appropriate tax) ?

Any response from senior members or anybody have a solution to this will be highly appreciated.

Thanking you in advance

BKPDP

  • elax
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  • Registered: 05/17/2011
  • Posts: 326

Re: How to setup multiple vat types in Indian Chat of Accounts

On what depends the VAT ?
If it depends on the customer create a tax group which exclude the tax you don't want (and leave the VAT you need).
If it depends on the item, configure the item with the relevant VAT.

/Elax

  • Registered: 05/01/2013
  • Posts: 10

Re: How to setup multiple vat types in Indian Chat of Accounts

Hi Elax,

Thanks for your prompt reply. If i create a more than one tax i.e,  VAT @ 5% & VAT @ 1% it comes out error with "Selected GL Accounts cannot be used by another tax type". Should i need to create corresponding GL Account under current liabilities ?

Please advice.

Thanks

  • elax
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  • Registered: 05/17/2011
  • Posts: 326

Re: How to setup multiple vat types in Indian Chat of Accounts

Yes you need to create one GL account for each tax type (under liabilitie).

  • Registered: 05/01/2013
  • Posts: 10

Re: How to setup multiple vat types in Indian Chat of Accounts

I have created 3 tax rates like @1%, @5% & @13.5% and created the corresponding GL accounts. Now my concern is, if i purchase a product @13.5 % tax, can i sell it with VAT@1 % ?

  • elax
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  • Registered: 05/17/2011
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Re: How to setup multiple vat types in Indian Chat of Accounts

Yes you can. I strongly suggest that you read about the tax system in fa here. And then come back and answer question about what you don't understand (maybe we should be able then to update the wiki and make it clearer).

/Elax

  • Registered: 05/01/2013
  • Posts: 10

Re: How to setup multiple vat types in Indian Chat of Accounts

Hi Elax,

Thanks for your time and response. I am really feeling guilty that i could not achieved what i wanted to do.  I have gone through the wiki and i think i have messed up with huge information there.

I want if i purchase a product @13.5 % VAT, how can i sell it with VAT@1 % ?

While creating a new item, if i am choosing "Item Tax Type" say VAT@13.5% ,  that VAT @13.5% is coming on both purchase and sales invoice, where as i want VAT@1% should be reflected in the Sales invoice.

Hope you will help.

Thanks

  • elax
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  • Registered: 05/17/2011
  • Posts: 326

Re: How to setup multiple vat types in Indian Chat of Accounts

Basically, you set your item to both VAT 1% and 13.5%. (in fact, exclude everything else)/
Then you setup tax group one, 1% and the other 13.5%.
Assign your supplier to the 13.5 % group (so what you buy from him would be taxed as 13.5%)
and assigne your customer(s) the group 1%, so when you sell the same item, it would be taxed at 1%.

Simple, ;-)

(The trick if any, is to configure the item to all tax types, and create different groups to "filter" which tax are applied).

/Elax
Max

  • Registered: 05/01/2013
  • Posts: 10

Re: How to setup multiple vat types in Indian Chat of Accounts

Hi Elax,

Thanks for your beautiful tips. It seems that i am coming to the point. One more things at this stage i would like to request you to look into is, if i assign a supplier a specific tax group (Say 13.5%), is it possible to buy from that supplier, items having different tax rate (say @ 5%), as not all the products are comes under VAT @ 13.5 % however there are some items which comes under VAT @ 5% from that supplier.

Hope you will find a way..

Thanks again

  • elax
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  • Registered: 05/17/2011
  • Posts: 326

Re: How to setup multiple vat types in Indian Chat of Accounts

Yes, you just need to configure this supplier to use 5% and 13.5% rates.

You definitely needs to read the wiki, because everything is in it.

/Elax

  • Registered: 05/01/2013
  • Posts: 10

Re: How to setup multiple vat types in Indian Chat of Accounts

Hi Elax,

Thank you very much for your guidance & i really appreciate it. At last, i figured out how to do this. Thank you very much for your time & contribution to this healthy forum.

  • Registered: 05/01/2013
  • Posts: 10

Re: How to setup multiple vat types in Indian Chat of Accounts

Hi Elax,

I don't know what i have done to my tax setup. The current structure is as follows.

In the tax types, i have the following setup

VAT@1%              1.0             2150 Sales Tax @1%     2145 Purchase Tax @1%        
VAT@5%              5.0             2151 Sales Tax @5%     2146 Purchase Tax @5%        
VAT@13.5%     13.5     2152 Sales Tax @13.5%     2147 Purchase Tax @13.5%

In Tax Groups

Sales Tax@1%  (VAT@1%  is selected, others are unchecked)  - - This is meant for all sales invoice @ 1%   
Tax Exempt     (all are unchecked)   
Purchase Tax     (all three selected i.e, 1%, 5% & 13.5%)     -- For Suppliers

In Item Tax Types

VAT@1%             (VAT@1%  is exempted, others are selected)
VAT@5%             (VAT@5%  is exempted, others are selected)
VAT@13.5%     (VAT@13.5%  is exempted, others are selected)

I have created a supplier and assigned him to Purchase Tax Group.
I have created a customer and assigned him to Sales Tax@1%
I have created 3 items assigned them 3 tax types like 1%, 5% & 13.5% respectively.

While purchasing the above 3 items from the supplier, taxes are coming nicely in the purchase invoice for corresponding items. However my problem is that, when i sale the items, in the Sales Invoice (where taxes for all 3 items should be calculated as Sales Tax @ 1% , as i have assigned customer to Sales Tax @ 1%) , the only item (which have assigned the tax rate VAT@1% in the item master) is coming with 1% tax and other two are coming without any taxes.

I can understand that it will take your precocious time however i could not figure out what went wrong. Please help, if possible.

Thanks.

  • Registered: 05/01/2013
  • Posts: 10

Re: How to setup multiple vat types in Indian Chat of Accounts

To make it clear please note that.. where it says in the above post

In Item Tax Types

VAT@1%             (VAT@1%  is unchecked, others are selected in the Is exempt column)
VAT@5%             (VAT@5%  is unchecked, others are selected in the Is exempt column)
VAT@13.5%     (VAT@13.5%  is unchecked, others are selected in the Is exempt column)

Hope that help to understand better.

  • elax
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  • Registered: 05/17/2011
  • Posts: 326

Re: How to setup multiple vat types in Indian Chat of Accounts

As your items can be depending on external factor either %1 or %13.5 it's obviously not a good idea to create a 1% tax type and a 13.5% tax one.
YOU DON'T NEED a VAT@1% Item Tax type because you don't  have item which you buy at 1%
You should have only 2 item Item taxes
VAT@5% (1% AND 5% unchecked)
VAT@13.5% (1% AND 13.5%)

Then the purchase tax group should NOT select 1% but 5% and 13.5% (so depending of the product you get either 5 or 13.5 %)
The sales group is alright

That's my final answer.
/Elax