Tax Management

I have a bill from Telco and for local calls, there is GST. But for ovreseas call, GST is exempted. These transactions come in the same bill. How do I setup and record?

Highnix ERP can handle a common issue that is difficult to resolve for users who are not using the system. This issue is the need to apply different GST rates to different types of calls on a telco bill. In this scenario, local calls are subject to GST, while overseas calls are exempt. Highnix ERP can handle this by setting up a simple one-time rule. This rule can then be applied to different vendors, customers, and products.

1. Assuming that the tax type of TX (current tax rate say 8%) and ZP (Zero Tax) tax type have already been setup in the system. (Note: The system supports two tax types: TX (8%) and ZP (zero tax). Note that zero tax is not the same as tax exemption. Zero tax is still a tax, but the rate is zero. If zero tax is applied, the system will record the input value of the purchase, but the tax amount will be zero. Tax exemption, on the other hand, means that there is no tax liability at all. If tax exemption is applied, the system will not record the input value or the tax amount.)
2. Setup a tax group say "Purch Invoice with TX & ZP" (System Setup-> GST Tax Group). Under the Select the taxes that are included in this group, check the "ZP" and "TX" check boxes and save it.
3. Setup an item tax exemption type "Items Not Taxable - ZP and ZR 0%". Under the "Select which taxes this item tax type is exempt from.", check all boxes except ZP and ZR. This is to tell the system that the product will be taxes but the tax rate is zero. The ZR is for Sales or output tax.
4. Similarly we also need to create a item tax called "Items Taxable - SR and TX-Prevailing Rate". Under the "Select which taxes this item tax type is exempt from.", check all boxes except SR and TX.
5. Create a Supplier say "Telephone Company". (Purchase Mgt->Maintenance->Add and Edit Supplier Records). In the Tax Group pull-down box, select "Purch Invoice with TX & ZP" created in the previous step.
6. Create a product "Local Phone Calls" (Inventory/Product Mgt->Maintenance->Add and Edit items) and in the Item Tax Type field, use the pull down menu and select "Items Taxable - SR and TX-Prevailing Rate"
7. Create another product call "Overseas Phone Calls" and in the Item Tax Type filed, use the pull down menu and select "Items Not Taxable - ZP and SR-Prevailing Rate"
8. Now you can enter a bill from "Telephone Company" which has 2 items:
   1. Overseas Phone Calls
   2. Local Phone Calls.
9. With this setup, the system will be able to record all the taxable and non-taxable input purchase.
10. Note: dfdf

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