In an invoice, when the VAT calculated on the assessable value of a stock item exceeds two decimals, it gets rounded-off to two decimals. This round-off is done for the VAT amount calculated on each such stock item in the invoice.
The VAT return filing requirements of many states are commodity-based, wherein VAT has to be calculated commodity-wise. For commodity-wise calculation, the VAT amount has to be rounded-off for each stock item in the invoice to ensure that it matches the amount captured in computation, annexures and returns.
In the following example, you can see the difference in tax amount rounded-off at the stock item level in Release 4.9x and 5.x.
|
Name of Stock Item |
Assessable Value |
Tax Rate |
Tax Amount |
Amount Rounded-off |
|
|
Release 4.9x |
Release 5.x |
||||
|
Item A |
1091 |
14.50% |
158.195 |
158.20 |
158.20 |
|
Item D |
225 |
14.50% |
32.625 |
32.63 |
32.63 |
|
Item E |
405 |
14.50% |
58.725 |
58.73 |
58.73 |
|
Item H |
165 |
14.50% |
23.925 |
23.91 |
23.93 |
When the same VAT/Tax Classification was selected for all the stock items, the total tax amount was calculated as a percentage of the total assessable value. Due to this, a mismatch was observed in the round-off method applied for calculating the tax amount for each stock item.
Record a sales invoice as shown below:
In the above screen, VAT is rounded-off as given below:
Assessable value * VAT rate = VAT amount, which is, 1,886 * 14.5% = 273.47 .
The Statutory Details screen displays the tax break-up as shown below:
The VAT annexure appears as shown below:
In the above images of Statutory Details screen and Annexure-II , you will observe that upward rounding method is applied for calculating tax on each stock item except Item H.
The round-off is done as follows:
Tax on Item A is 158.195 , rounded-off to 158.20 .
Tax on Item D is 32.625 , rounded-off to 32.63 .
Tax on Item E is 58.725 , rounded-off to 58.73 .
Tax on Item H is 23.925 , rounded-off to 23.91 . This has to be rounded-off to 23.93 as done for the above stock items.
When the same tax rate is applied for all stock items in the invoice, the tax amount is calculated as a percentage of the assessable value of each stock item, and then rounded-off to two decimals. This is to ensure that the amount captured in the invoice matches the amount captured in computation, annexures and returns.
Record a sales invoice as shown below:
The Tax Analysis screen appears as shown below:
The VAT annexure appears as shown below:
In the above images of Tax Analysis screen and Annexure-II , the same rounding-off method is applied for all stock items.
The round-off is done as follows:
Tax on Item A is 158.195 , rounded-off to 158.20 .
Tax on Item D is 32.625 , rounded-off to 32.63 .
Tax on Item E is 58.725 , rounded-off to 58.73 .
Tax on Item H is 23.925 , rounded-off to 23.93 .
'Round-off in Invoice for Stock Item Values Having More Than Two Decimals (VAT)' has been shared with
