Tax code in item master

I am wondering about what is TAX CODE In item master meant. Is it same as TAX ID or Tax Rule or something else. I am confused.


Product Tax Code is a label that is assigned to a product or product group and indicates the tax obligations and exemptions customers have when they purchase this product. These tax obligations are taken into account when a customer (user) submits an order. Product Tax Codes (PTC) are codes in Seller Central that are mapped to GST rates noitified by the Government.

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Does this Product Tax code have any significance while calculating the UAE VAT 201 report

Can we set the Tax code to the same value as the “Item Tax template” of the Item Master