How to add 18% GST and Nill rated item in the same Sales Invoice with proper tax breakup

I have two items, One is taxed at 18% GST, and another item is Nill rated. I have defined their respective rates in the item master and marked the other item as Nill-rated. However, When I try to create an Invoice, It does two things incorrectly.

  1. It assumes the transaction to be “In State GST”, Whereas I have added the address correctly in the Customer section, which indicates It is an Out of State GST scenario. How can I ensure it picks up the correct template based on the address?

  2. It ignores all the settings in the item master and applies 18% GST on both items.

I am attaching images of the required sections.

@Chintan_Shah1 Have you configured tax category ?

Like adding in state as tax category in your in state customer and then map this category in instate tax row at item level.

Thanks @Hardik_Gadesha for quick response

No, I did not. However, I configured it now. With this, I was able to solve issue partially. This What happened

  1. I defined two tax categories, In State and Out State
  2. For the customer, I assigned him Out state
  3. When creating an invoice, I define Tax Category at the Invoice level too
  4. Now, when I add both items, It pickup up the location correctly and applies IGST however, the rates it is applying are reversed. So, The Nill-rated item is now taxed at 18%, and the 18% item is taxed at 0%. Not sure how that works.

@Chintan_Shah1 have you added proper taxes template at item level ?

Yes, Please have a look at the screenshots

@Chintan_Shah1 No need to set taxes row in nill rated items,

Also you taxes setting seems wrong in 18% too.

Minimum ret is something like if you item net rate is 500 then apply 12% else 5%.

can you please share item tax template SS