# Taxes revisisted

Hi,

I have been experimenting with the taxes, since I am not completely satisfied with the current handing.

I believe the situation where a discount is given to the VAT inclusive price is not uncommon.
Consequence of this is that VAT needs to be adjusted.

Product AAA has a net price of10 and VAT of 10% thus 1
So sales price is 11 and VAT 1

Now give a discount, of 1  so discounted sales price is 10  and the VAT-exclusive price on this 10/1.1= 9.0909 and the VAT 0.909.

How to implement this in ERPNext??

rgds robert

Hi Robert,

From what I understand, you want to use inclusive price on an item and
give a flat discount on it.

So to replicate your calculations, this is what I did.

1. Created Item ‘Scale’

2. Created Item ‘Discount’

3. Created Tax Account - ‘VAT @ 10’, with rate as 10%

4. Created an Invoice, entered Debit To.

5. In Invoice:
5a. Created a row in Tax table, of ‘VAT @ 10’, entered rate as 10 and
checked “included in print rate” (this is for inclusive pricing on all
items in the item table)
5b. Created a new row in Item table, Item Code: ‘Scale’ with basic rate as 11
5c. Created a new row in Item table, Item Code: ‘Discount’ with basic rate as -1

6. Save and Submit the Invoice, after filling in all the other
mandatory fields like Income Account and Cost Center.

7. To check the tax exclusive price, click on View Ledger.

I have attached the invoice and ledger for your reference.

I think this covers your scenario.
i.e.
if Item rate is 11 inclusive of tax and you give a flat discount of 1,
then your net total should be 10.
your tax exclusive price should be (11-1)/(1.1), i.e. 9.09, as seen
from the ledger.
your tax should be (1 - 0.09) = 0.91, as seen from the ledger

I hope you find this workaround acceptable.

Thanks,
Anand.

On Wed, Jun 6, 2012 at 7:50 PM, robert be...@gmail.com wrote:

Hi,

I have been experimenting with the taxes, since I am not completely
satisfied with the current handing.

I believe the situation where a discount is given to the VAT inclusive price
is not uncommon.
Consequence of this is that VAT needs to be adjusted.

Product AAA has a net price of10 and VAT of 10% thus 1
So sales price is 11 and VAT 1

Now give a discount, of 1 so discounted sales price is 10 and the
VAT-exclusive price on this 10/1.1= 9.0909 and the VAT 0.909.

How to implement this in ERPNext??

rgds robert

This is an interesting work around to create “discount items”. Let me study this solution and than I will come back, thanks, robert

On Thursday, June 7, 2012 8:01:08 AM UTC+2, Anand Doshi wrote:

Hi Robert,

From what I understand, you want to use inclusive price on an item and

give a flat discount on it.

So to replicate your calculations, this is what I did.

1. Created Item ‘Scale’

2. Created Item ‘Discount’

3. Created Tax Account - ‘VAT @ 10’, with rate as 10%

4. Created an Invoice, entered Debit To.

5. In Invoice:

5a. Created a row in Tax table, of ‘VAT @ 10’, entered rate as 10 and

checked “included in print rate” (this is for inclusive pricing on all

items in the item table)

5b. Created a new row in Item table, Item Code: ‘Scale’ with basic rate as 11

5c. Created a new row in Item table, Item Code: ‘Discount’ with basic rate as -1

6. Save and Submit the Invoice, after filling in all the other

mandatory fields like Income Account and Cost Center.

7. To check the tax exclusive price, click on View Ledger.

I have attached the invoice and ledger for your reference.

I think this covers your scenario.

i.e.

if Item rate is 11 inclusive of tax and you give a flat discount of 1,

then your net total should be 10.

your tax exclusive price should be (11-1)/(1.1), i.e. 9.09, as seen

from the ledger.

your tax should be (1 - 0.09) = 0.91, as seen from the ledger

I hope you find this workaround acceptable.

Thanks,

Anand.

On Wed, Jun 6, 2012 at 7:50 PM, robert <be…@gmail.com> wrote:

> Hi,

>

> I have been experimenting with the taxes, since I am not completely

> satisfied with the current handing.

>

> I believe the situation where a discount is given to the VAT inclusive price

> is not uncommon.

> Consequence of this is that VAT needs to be adjusted.

>

> Product AAA has a net price of10 and VAT of 10% thus 1

> So sales price is 11 and VAT 1

>

> Now give a discount, of 1  so discounted sales price is 10  and the

> VAT-exclusive price on this 10/1.1= 9.0909 and the VAT 0.909.

>

> How to implement this in ERPNext??

>

> rgds robert

>

>

>

>

>

>