[SOLVED] Determination of Material rate in BOM includes VAT but it shouldn't


I bought 125 units of item A costing 2.47€ per unit totalling 308.75€.
But my purchase receipt has VAT (23%) so the final total is 379.76€.

When I try to use item A in a BOM its rate is 3.04€ instead of 2.47€.
I assume this is because VAT is being added to it.

But, being a company, VAT isn’t really a cost since I’ll get it back.

What am I doing wrong and how can I configure ERPNext so that VAT is not considered a cost?
Must I remove VAT from the Purchase Receipt? Actually I can do this since I’m not using ERPNext for my accounting. Just to control stocks, manufacturing and sales. But this sounds like a workaround and not like a real solution.

Please advise.


Have you tried using a Price List rate instead of Last Purchased Rate/Valuation for the BOM?

1 Like

Ah! I hadn’t tried it. It makes sense and it worked. Problem solved. Thanks!

Is it possible to apply VAT to a specific item instead of applying on the total in purchase order?