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Tax Code

 
 
Welcome to AlignBooks. We are happy to have you on board. In this help studio tutorial, we will explore the Tax Code set up options.
Before we begin, let us understand about the need of Tax Code setup and the usage of this particular activity.
 
You will be required to set up your tax codes only if you are registered under Indirect Tax Laws of your country i.e. you are paying indirect taxes on your procurements and you are liable to collect indirect taxes on your sales e.g. GST in India. If it is so, you should configure “Tax applicable in Sales/Purchase – ON” in Configuration->General Setup
Generally tax rates are different for different items and their accounting treatment also differs from case to case. For the ease of work at the time of creating different purchase / sales documents you need to set Tax codes applicable to your various item you are dealing in.
 
Once you setup tax codes and link these with the items you are dealing with accurately, your sales / purchase document creation will be easy, accurate and fast. With this one time exercise you can be rest assured that you are duly complying with your Indirect Tax laws.
 
You can also edit and delete an already created set of information with required authorisation.
 
The key functions of a Tax code setup Module are:
·     Creation of a New Tax code;
·     Modification of an existing Tax code;
·     Deletion of an existing Tax code.
 
We will be going through the each of these set of information in detail.
 
If you are on home page, you need to click on  Icon  titled as “Configuration” . You will get many options available under Configuration Menu. Click on  to select this option.  The Screen appears will look like;
                                      
 
 
New Tax code Creation–
You can see the  option at top right of the screen. Click on this option and you will be directed to the relevant Tax code creation screen.  Here you will have four relevant sections where all the required data pertaining to a new Tax Code can be captured.
  
Tax Code
 
We will start with Basic first;
 
1

Description

Type a Description for your identification of nature of Tax code.
2

Tax Code

Enter a Tax Code of maximum of 4 numeric/alpha numeric.
3

Tax Rate

Enter Rate of Tax for this code.
4

Tax Rate For Export House

Enter Rate of Tax for special category (Export House). Alignbooks has provided the provision for the Special rebate given in taxes to Export house by GST Act. When Customer selected in entry having GST Category - Export House then these rates will be applied in the transaction.
5

Inactive

If for any reason a particular Tax Code has become  “Inactive” for the time being and you want that at the time of transactions name of that Tax Code does not appear in the list of Tax Codes,  keep Inactive as “ON” .
6

CGST %

Enter share of Central Government in total Tax Rate i.e. 2.5 % out of total 5 %
7

SGST %

Enter the Share of State Government i.e. Total Tax Rate – Share of Central Government
8

Sales Ledger

Select a General Ledger from the drop down list where you would like to post the Sales of this item. This filed is available only if you have configured “Posting Ledger Based on –Tax” in Sales Setup.
9

Purchase Ledger

Select a General Ledger from the drop down list where you would like to post the Purchase of this item. This filed is available only if you have configured “Posting Ledger Based on –Tax” in Purchase Setup.
 
 
We are now finished with the basic part and made a unique identification for the Tax Code. We will now look into the Input Ledgers of this Tax code
 
10

CGST Ledger

Alignbooks has already mapped the default Ledgers of Input credit for CGST if you wish to specify any other ledger then Select from the dropdown a General Ledger for posting input credit of CGST.
11

SGST Ledger

Alignbooks has already mapped the default Ledgers of Input credit for SGST if you wish to specify any other ledger then Select from the dropdown a General Ledger for posting input credit of SGST.
12

IGST Ledger

Alignbooks has already mapped the default Ledgers of Input credit for IGST if you wish to specify any other ledger then Select from the dropdown a General Ledger for posting input credit of IGST.
If the required ledger does not exist in the list, you can add a new one by clicking on   Icon or   within the dropdown list.
 
 
We are now finished with the Input Ledger selection for the Tax Code. We will now look into the Output Ledgers of this Tax code.
 
13

CGST Ledger

Alignbooks has already mapped the default Ledgers of Output payable for CGST if you wish to specify any other ledger then Select from the dropdown a General Ledger for posting output debit of CGST.
14

SGST Ledger

Alignbooks has already mapped the default Ledgers of Output payable for SGST if you wish to specify any other ledger then Select from the dropdown a General Ledger for posting output debit of SGST.
15

IGST Ledger

Alignbooks has already mapped the default Ledgers of Output payable for IGST if you wish to specify any other ledger Select from the dropdown a General Ledger for posting output debit of IGST.
If the required ledger does not exist in the list, you can add a new one by clicking on   Icon or   within the dropdown list.
 
 
We are now finished with the Output Ledger selection for the Tax Code. We will now look into the Reverse Charge Ledgers of this Tax code.
 
16

CGST Ledger

Alignbooks has already mapped the default Ledgers of Reverse charge for CGST if you wish to specify any other ledger then Select a GL for posting amount charged on Reverse Charge of CGST.
17

SGST Ledger

Alignbooks has already mapped the default Ledgers of Reverse charge for SGST if you wish to specify any other ledger then Select a GL for posting amount charged on Reverse Charge of SGST.
18

IGST Ledger

Alignbooks has already mapped the default Ledgers of Reverse charge for IGST if you wish to specify any other ledger then Select a GL for posting amount charged on Reverse Charge of IGST.
 
If the required ledger does not exist in the list, you can add a new one by clicking on   Icon or   within the dropdown list.
 
 
Save : Click on  to Save the values entered by you.
 
 
Exit : Click on  to exit from new tax code.
 
 
We are now back to the main screen for the Tax code.
 
Edit : Click on to edit the Tax code information. You can make the required changes and Save. If you want to delete this record, click on  and confirm the deletion. 
 
Delete : Click on   here if you want to delete a Tax code.  It is advisable not to delete a Tax code if some data are already entered against that Tax code rather you can make it “Inactive”.
 
Export : Click on  to Export data in an Excel Sheet.
 
Search : type on a text you are looking for to search in the list.
 
Group : If you want to group the data in the table on any particular field, hold the mouse on that field and drag it little upward, the table display will be grouped on that field. Drag the field back to its position to undo the grouping.
 
Sort : If you want to sort data on any particular field, click on the label of that field, your data will be sorted on that field. You can reverse the order of sorting by just Double clicking on the label of that particular field.
 
Click on   to close the Tax Code utility.”
 
 
We hope you enjoyed this tutorial. Please give us a call for further help.  Happy Aligning!
 
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