Tax master form allows you to specify the tax structure required as per the business needs. Every region (state or country or province) may have different tax structure and you must be aware of the tax rates and levels for all the regions for which you are going to do the transactions.
To create or modify the Tax master, go to Setup menu and click "Tax Master" menu command.
How to create Tax structure.
What is the use of Tax master:For any business enterprise, tax structure may or may not be mandatory and this can be specified per region, state or country on the tax master form.
How to use the Tax master.
Step 1: You must identify the tax structures applicable for your business such as VAT, CST, Service Tax or GST. Each tax structure must belong to specific region.
Step 2: Type in the name of the tax structure in tax description field. It can be anything that you can recall easily and use to pick up while creating transactions. e.g. LocalTax
Step 3: Each tax structure will have up to 3 tax levels. You will need to specify the tax rate applicable for the specific region at each level. So if you have additional taxes calculated on first tax then you can specify it as tax at level 2 or level 3 depending on your applicable region.
Step 4: Final step is to define the calculation part, i.e. The amount on which the tax will be applied, e.g. Basic amount or Tax 1 or Tax 2 etc.
Note: Once you create a Tax structure and if it is used on transaction forms then it cannot be modified otherwise it can be modified.
Where to use the Tax master.
Once tax master is defined, you can pick up the tax description from the drop down on transaction forms such as Quotation, Tax Invoice, Sales Invoice etc.
Applying different tax for each item.
If you want to apply the Tax for each and every item, then you can enable the "Multiple Tax" check box. Once it is enabled you can create tax structure for only 1 tax level.