The general rate of VAT charged is 16% and zero rated. However, traders also charge VAT 12% on some designated goods and services. Once all the required statutory configurations are made, recording transactions is very simple. The configurations applied will automatically apply all the necessary tax rules, as defined. Hence, no expertise in statutory laws and rules is required to record transactions.
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VAT is imposed at 3 tax rates, which are:
● 16%: This is the general rate of tax and is applicable to all taxable goods and taxable services.
● 12%: This rate is charged on the purchase of electricity.
● 0%: This applies to certain categories of goods and services, which includes exports, agricultural inputs, pharmaceutical products and supplies to privileged persons.
You can select the required ledgers and record the transaction. The tax amount will be calculated, as defined.
Note: The VAT/Tax classifications set in your previous versions will be ignored. The nature of transaction and the VAT rates will be inferred from the configurations made in the masters.
Although the statutory details defined in the masters drive the tax calculation for a transaction, you have the flexibility to modify the details in the transaction.
National Traders has recorded a sales of xyz at the rate of 16%. After recording the transaction, the user realizes that the stock item is exempt of VAT, according to the department notification. The user can modify the details directly in the transaction.
As there is a modification made, which is a deviation from the statutory rules defined, there are three check points. These check points allow validation of the modification made.
● On saving the transaction, a message box to notify that there are modifications made is displayed.
● The modification made will be tagged with * symbol in the Tax Analysis screen to indicate that the value has been overridden by the user.
● After saving, the transaction will be listed under Transactions accepted with tax information conflicts in the reports. The exception has to be resolved to allow the transaction have statutory implications on the data.
Note: If the user has the appropriate security level assigned, tax rates can be overridden while saving the transaction.
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