Sometimes we need to generate Sales Order (or Purchase Order) with items that have different tax rates. Currently in SO and PO there is we can only apply the same tax to all items. How can we achieve this because it is a real case and my accountant is telling me that it is a common accounting practise?
Sorry about butting in @umair . I am having the same problem and I followed the instructions on the link that you mentioned. I set taxes on each item individually, as many of my items have different taxes ranging from 18/10/5/0 rates but no item has two different rates. either an item belongs to an 18% category, or 10, 0 etc. Whenever i try to do pos invoice, so or quotation it is not picking up the item taxes but what I have defined in the accounts—>selling tax master. if i put them to zero the invoice has no tax if i set default to 10% then the invoice items all show 10%. The taxes being set on the items are being ignored totally. I am testing v4.00 for production. Reading your link I understood that the taxes set on items has priority?
To have tax rate being applied in the transaction, you should have tax accounts updated in the Tax and Other Charges table on the transaction. Please ensure you have specific Tax and Other charges master in the POS Setting. This tax master should have all the tax account listed in it, with tax rate mentioned as zero.
When tax accounting between item and Tax and Other Charges master is mapped, it will apply tax rate mentioned in the item master.
Thanks @umair. Beginning to understand tax system now.