Configuring VAT masters

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.

For a business with all stock items having the same VAT rate, the tax rates can be defined in the company level. The rates once defined, will be automatically applied to all the stock items.

To define VAT rates at the company level

1. 1. 1. Go to Gateway of Tally > F11: Features > Statutory & Taxation.

      2. Set the option Enable Value Added Tax (VAT) to Yes.

      3. Enable the option Set/Alter VAT Details.

      4. Enter VAT Details.

         1.  Enable Set/alter tax/rate details.

         2. Enter the Tax Rate and Tax Type.

      5. Press Enter to save.

When a transaction is recorded, the defined rate will be applied automatically.

One of the following modes can be applied.

Mode 1: Define tax rate at the company level, and apply it for the stock items with common VAT rate. Define tax rates at the stock group level or stock item level for the items that different from the common VAT rate.

Mode 2: Define tax rates at the stock group level/stock item level

The tax rate can be defined at the stock group level.

In this case, the tax rate can be defined at the stock group level. In case if any of the stock items have a different VAT rate from the stock group, then the tax rate can be defined at the stock item level. This will override the details specified in the stock group level.

To use the custom commodity and tax details

Enable  VAT commodity and tax details as masters.

Create Commodity Masters.

Assign the VAT Commodity to Stock Groups/ Stock Items.

In this case, the tax rates can be configured either in the sales/purchase ledger.

To define tax rates at the ledger level

1. 1. 1. Go to Gateway of Tally > Accounts Info. > Ledgers>
         Alter.

      2. Select the required purchase/ sales ledger.

      3. Enable Set/ Alter statutory details.

      4. Select Applicable in the field VAT Applicable.

      5. Enable Set/ Alter VAT Details.

         In the VAT Details screen,

         1. 1. Enter the VAT Rate.

            2. Select the Tax Type.

      6. Press Enter.

      7. Press Ctrl+A.