Preparing the System for
Tax-Wise Sales
and Purchase Statements
Backgrounder
To identify the tax status of any item we need to inform the system about three details…
- The Location of the Vendor (Purchase Party)
- The Location of the Customer
- Type of Item
For eg.
If the “A” is purchased from “X”, the tax for the item would already have been paid i.e. the item A is considered Tax-Paid. But if the same item “A” is purchased from “Y”, the applicable tax has to be paid ie. the item A is Taxable. Again, the tax status would be still different if the items are sold to a out-of-state customer. |
MedWhl allows you...
- To define all the possible tax combination.
- To generate the sale values for all the different type of tax situations.
MedWhl also allows you to maintain transaction wise taxable status of any item. You can buy the same item from an out-of-state vendor in one transaction and from an in-state vendor in the other. The system can give you tax-wise status of each transaction.
For e.g.
- Taxable Sale
- Tax-Paid Sale
- Government Sale (Form D)
- Out-Of-State Sale against In-State Purchase
- Out-Of-State Sale against Out-Of-State Purchase
- Sale against Form F Transfer (Consignment)
The system also gives a statement by which you can have a comparison of the actual VAT applicable and the VAT recovered against each and every sale bill.
Steps for Marking
- Define the different possible Tax Types
- Mark the Tax Type of each type of item
- Specify the Type of Account
Let us see these steps in a little more detail.
1. Tax Types
Select Tax Types from the master menu.
Use this option to define a list of all the different tax rates applicable for the products you deal in. Avoid the use of names like Taxable and Tax-Paid as the tax types.
2. Mark Tax Types
Now use the Mark Tax Type option to classify the tax category
of each item. Select the tax type that you are marking in the right
hand combo, named Show Tax Type.
Similarly, you may select the items to mark in the left hand gird. Click on >> to
shift the selected item from the left grid to the right grid. To
unmark - select items in the right hand grid and click on <<.
3. Mark the Tax Type for Each Vendor and Customer
Mark every party with whom trading transactions are under taken as per their status, for example, In State, Out of State, Consignment, Form D etc.
