Entering GST for vendor bills and purchase orders

You can use Purchase Tax Rate for this purpose. The purchase tax is paid by the company on the expenses and is subtracted from the charge amount to avoid double-taxation for the client. CORE uses this rate to separate the actual cost and tax amount. If you create a vendor bill with a purchase tax on it, CORE deducts that tax from its income account. If you enter an amount instead of a percentage, CORE reverse calculates the percentage value.

Cost Amount = Net Cost Amount + Purchase Tax Rate

Cost with Purchase Tax = Amount without Purchase Tax / (1 + Purchase Tax Rate / 100)

For example, If you apply a purchase tax of 10% to a vendor bill of $100, CORE recalculates the expense amount to $96.36. To show the Purchase Tax Rate column on the Edit Vendor Bill screen, go to More > Show/ Hide Columns > Purchase Tax Rate.

Do note that you cannot add taxes to purchase order items until you create vendor bills from them. CORE allows you to convert your POs into vendor bills, let the items be charged to a client and also be paid back to the vendor.

Was this article helpful?
0 out of 0 found this helpful