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Configuring VAT Masters (Kenya)

Tally.ERP 9 facilitates defining VAT details at different levels. This provides the convenience of applying tax rules at the highest level, which is the company level, as well as the flexibility to modify, override or define details at the lower levels, based on one's business requirement.

For example ,

The business is dealing with different types of batteries and if all the items are attracting the same VAT rate, the tax rate can be defined at the company level.

If the business is dealing with batteries and leather goods, then the tax rates are different, then the tax rate can be defined in the stock group level.

The user can define the rules at the company level and override at the lower level. The rules can be inherited as follows:

● Company

● Stock Group

● Stock Item

● Ledger Group

● Ledger

● Transaction

● Transaction Entry

Note: The rules that are defined at the voucher type or voucher type class level will be used as 'template', thereby it will be used ONLY to fill the values in the transaction by default in create mode.

VAT rates

After migrating to release 5.2, you can start recording invoices. If these are transactions that have statutory implications, then the required masters have to be configured. In most scenarios the business can define the tax rules in few minutes and start recording transactions.

Choose the scenario most suitable for your business and know how VAT details can be configured at different levels.

● I am dealing with stock items which have the same VAT rate.

● Most of the stock items that I deal with, fall under the same VAT rate, but a few stock items attract a different VAT rate.

● I am dealing with multiple stock items with multiple tax rates. The stock items can be classified into groups, such that each group has a common VAT rate. For example, batteries, leather goods, confectionery, etc.

● I am dealing with a wide variety of stock items with different tax rates, where as I have grouped the stock items based on my business need and not based on tax classifications.

● I don't deal with inventory. I maintain only accounts in my company.

Party ledger

The party ledger used in the transaction should have the following details defined to generate VAT returns accurately.

● Country/state

● Dealer Type

The Tax Rate Setup tool to easily update VAT rates for all stock groups and stock items after migration is available in Tally.ERP 9 release 5.2 onwards. Click here to know more.