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Tax Configuration

Overview

Primaseller allows you to create flexible sales tax models depending on your local laws using Tax Classes, Tax Rules and Tax Categories.

Tax Classes define the rates in percentage and the name of the tax.

You can assign these classes to your list of products or services by creating some very simple tax rules. You can set your tax rules-based on:

  1. From and To Location(Country and/or State): Depending on where you are selling your product or service from and where you are shipping, Primaseller applies different tax classes on your invoices
  2. Tax Categories (Optional): This is a categorisation of SKUs independent of Product Categories. The sole purpose of this set of categories is the classify your SKUs based on Different tax rates. This is relevant in countries where taxes vary by the kind of products as classified by governments. Example: HSN codes in India.

Tax Configuration Navigation

  1. Click on Settings icon from the left menu.
  2. Click on Tax Configuration.

Tax Classes

A Tax Class contains rates which are set on individual order items and invoice items. There can be various types of taxes applicable, like VAT, CST, GST, Service Tax, etc., depending on the country of your operation.

Creating a Tax Class

  1. Click on Tax Classes.
  2. You will land on a page with a list of current tax classes
  3. To create a new tax class click on Add New tax class in the top right corner
  4. Give a name to the tax class. Usually, you can combine your tax class and tax rate to create a tax class name. For example, if your tax name is VAT and its rate is 30 you can create a tax class name as vat 30%
  5. Provide a Class Code. This should again be a unique code without a space or Sign (Without % or / etc). Example : Vat30
  6. Rate type can be single, Multiple, or compounded and that will be applicable. Fill the tax name like VAT, CST, Service Tax and the values.
  7. Click on Save.

Creating Tax Categories

Tax Categories are used if you have different tax rates depending on the type of products you sell.

Create Tax Categories and subsequently you can add items to that Category. Next you can create Tax Rules to assign a specific Tax Class to each tax Category. Tax Category Code can also be the HSN code for some countries

Tax Categories and Product Categories
Product Categories found in the Catalog navigation serve a purpose of classification of your catalog.

Tax Categories allow you to categorize basis taxes. It is possible that two items in the same Product Category may belong to different Tax Categories.

Creating a Tax Category

  1. From Taxation settings, select the Tax category Tab.
  2. Click on Add New Tax category
  3. Fill in the details of Category Name and Category code. If you are under a HSN regime, use HSN code for both Name and Category code.
  4. Click on Save.

5. Next, go to Category SKU Mapping

6. Click on Add New Tax category Mapping

7. Then search SKU by name or code and select it.

8. Select the tax category of the SKU.

9. Click on Save.

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Tax Rules

Tax Rules allow you to use Tax Classes and apply them to transactions based on the source and destination of the physical products involved as well as Tax Categories(Optional) if any.

Creating Tax Rules

  1. Click on Taxation Rules.
  2. You will land on a page with a summary of tax rules you would have applied earlier
  3. To create a new tax rule, click on Add taxation rule in the to the right corner of the page
  4. Provide a Name for the Tax Rule.
  5. Select the Selling From and Selling To fields that correspond to the item you are selling
  6. Apply the tax rule and Tax category from the already created tax rules and Tax category respectively.

Tax Application Logic

This section determines how to handle order level discounts as well as whether taxes are inclusive or exclusive.

Order Discount Application for Tax Calculations

This configuration is for order level discount and you can apply tax either “Before deducting order discount” or “After deducting order discount” as per your requirement.

Order Item Prices (Inclusive or Exclusive of Taxes)

You can configure whether your prices in all your orders will be inclusive or exclusive in this Tax configuration. This can be overridden at a channel level as well.

Hierarchy of “tax rules
Each Rule Assigns a Tax Class and Tax category to a combination of Products and Locations. Each option has a certain hierarchy as explained below.

Tax Category based hierarchy
If a tax category exists, and it has been used in a rule for a particular set of source and destination locations, then that rule will apply to all SKUs in that tax category. Else a more generic rule will apply.

Country and State Hierarchy
You can keep a generic rule for All Countries to All Countries to keep a standard tax class for all transactions
Specific Country-All States rule will override All Countries-All States
Specific Country-Specific State rule will override Specific Country-All States

Updated on October 9, 2020

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