RisingERP - Purchase Taxes and Charges Template

Purchase Taxes and Charges Template

Taxes and charges associated with purchases play a crucial role in determining the overall cost of items. The Purchase Taxes and Charges Template, akin to its Sales counterpart, facilitates the systematic application of taxes and charges to items purchased. These templates are utilized within Purchase Orders and Purchase Invoices for internal record-keeping purposes.

To access the Purchase Taxes and Charges Template, navigate to: > Home > Procurement > Settings > Purchase Taxes and Charges Template

1. Adding Purchase Taxes/Charges via a Template

Before creating a new template, note that templates are pre-existing for commonly used taxes.

1. Click on New.
2. Provide a title for the tax.
3. Specify the type, indicating how the tax will be calculated and the applicable rate. Five calculation options are available:
4. Actual: Based on the actual amount of each item.
5. On Net Total: Applied to the grand total of all items.
6. On Previous Row Amount: Compounds charges over the amount to which tax was previously applied.
7. On Previous Row Total: Similar to the above, applied to the total bill rather than just the item amount.
8. Select an account head with pre-set tax rates or create a custom one.
9. Choosing "default" applies this template by default for new Purchase transactions.
10. Save.

Is Inter State: Ignore for Nigeria. For India. When selecting a customer in Sales Invoice or Delivery Note, if the VAT codes of the place of supply and customer shipping address don't match, the template with 'Is Inter State' checked becomes the taxes template. If the addresses match, the default taxes template applies. This also applies to Purchase Invoice based on the Supplier's addresses.

2. Features

2.1 Purchase Taxes and Charges Table

Consider Tax or Charge for:

1. Total: For the sum of all items.
2. Valuation: Applied to each item.
3. Valuation and Total: Applicable to both.

Add or Deduct: Specify whether to add or deduct the tax from the item.

Reference Row #: If tax is based on "Previous Row Total," select the row number serving as the base for this calculation (default is the previous row).

Is this Tax included in Basic Rate?: If checked, the tax amount is considered as already included in the Print Rate / Print Amount.

Account Head: The Account ledger under which this tax will be booked. Choosing preset heads, such as VAT, automatically fills in the rate.

Cost Center: If the tax/charge is an income (e.g., shipping) or expense, it needs to be booked against a Cost Center.

Description: A brief description of the tax for print on invoices/quotes.

Rate: The tax rate, e.g., 7.5 = 7.5% tax.

Amount: The tax amount to be applied, e.g., 750.00 = ₦750 tax.