TamilAccounting

Taxes

Taxes is where the system learns how to calculate what you owe and what you can reclaim. Managing it properly is what keeps you compliant, keeps your financial reporting accurate, and stops every invoice needing a manual correction. It covers sales tax, VAT, GST and the regional variants.

The three layers

Tax in TamilAccounting is built in layers, and setting them up in this order is what makes the calculation work.

#	Layer	What it defines
1	Taxes	Individual components — CGST 9%, SGST 9%, VAT 20% — each with its rate and GL accounts.
2	Tax Groups	Bundles of components, assigned to people — customers and suppliers.
3	Item Tax Types	Taxability, assigned to items — fully taxable, partly exempt or exempt.

A tax on its own never appears on an invoice. Components have to be bundled into a group before anything uses them, which is why a newly created tax that "does not work" is almost always one that was never added to a group.

How a rate is decided

On any transaction the system takes the tax group from the customer or supplier and the item tax type from the line item, and applies only the taxes that both permit. That is what lets one customer be zero-rated while another is not, and one product be exempt while the rest of the order is taxed.

Regional additions

Setting	Applies to
HSN/SAC Codes	Indian GST — statutory classification codes for goods and services.
TDS and TCS Settings	Indian withholding — tax deducted at source on payments, collected at source on sales.