Taxes Configuration India

Introduction

Here we will see the list and a brief description of the tax categories and tax rates that will be loaded once this module is installed and the corresponding dataset is applied as explained here.

To check the configuration follow these steps:

1. Login under the Administrator role of your client.

2. Go to Financial Management -> Accounting -> Setup -> Tax Category or just type "Tax Category" in the "Quick Launch".

3. You will see that the tax categories will be populated as under.

Tax Categories:

1.Excise Tax: An excise tax (sometimes called an excise duty) is a type of tax charged on goods produced within the country (as opposed to customs duties, charged on goods from outside the country). It is a tax on the production or sale of a good. This tax is now known as the Central Value Added Tax (CENVAT).

2. Exempt : This tax is used to exempt an entity from a single or multiple taxation laws.

3. KAVAT (Karnataka Value Added Tax): VAT is a state tax implemented by all the states of India w.e.f 01-Apr-05. This module provides tax categories for the state of Karnataka i.e. KAVAT.

Depending on the category/type of products sold, VAT is applied either at 14.5% or 5.5%.

4. Service Tax : Service Tax is a tax which is payable on services provided. The service provider can collect this tax from the consumer of service and deposit the same with the Government.

Current Service Tax Rate is 12.5%.

5. Service Tax with Professional Fee Along with Service Tax, it also includes : Education Cess: at 2% rate and Secondary and Higher Education Cess: at 1% rate.

6. TDS (Tax Deducted at Source): Through TDS a certain percentage of amounts are deducted by a person at the time of making/crediting certain specific nature of payment to the other person and deducted amount is remitted to the Government account. It is similar to "pay as you earn" scheme also known as Withholding Tax in many other countries e.g.USA.

TDS Rates depend on the Nature of Payments. List of commonly used Nature of Payments are available in the TDS module under Professional Version.

Tax Rates:

Tax Rates that are setup can be seen under:

1. Login under the Administrator role of your client.

2. Go to Financial Management -> Accounting -> Setup -> Tax Rate or just type "Tax Rate" in the "Quick Launch".

3. The accounting information is also set for each tax rate in the "Tax Due" and "Tax Credit" fields of the "Accounting" tab.

Available Versions

Dated on 02-04-2013 the first reviewed version of this module (2.0.0) is published in "QA Approved" maturity status to be installed in Openbravo 3 MP21.