Primaseller allows you to create flexible sales tax models depending on your local laws using Tax Classes, Tax Rules, and Tax Categories.
Tax Classes define the rates in percentage and the name of the tax.
You can assign these classes to your list of products or services by creating some simple tax rules. You can set your tax rules-based on:
From and To Location (Country and/or State): Depending on where you are selling your product or service from and where you are shipping to, Primaseller can apply different tax classes on your invoices.
Tax Categories (Optional): This is a categorization of SKUs independent on the Product Categories. The sole purpose of this set of categories is to classify your SKUs based on different tax rates. This is relevant in countries where taxes vary by the kind of products, as classified by the respective governments. Example: HSN codes in India.
Tax Configuration Navigation
Click on the Settings icon from the left menu.
Click on Tax Configuration.
A Tax Class contains rates that are set on individual order items and invoice items. There can be various types of taxes applicable, like VAT, CST, GST, Service Tax, etc., depending on the country of your operation.
Creating a Tax Class
Click on Tax Classes.
Click on Add New Tax Class in the top right corner
Give a name to the tax class. Usually, you can combine your tax class and tax rate to create a tax class name. For example, if your tax name is VAT and its rate is 30%, you can create a tax class name as 'vat 30%.
Provide a Class Code. This should be a unique code without any spaces or special characters. Ex: Vat30
Rate type can be single, multiple, or compounded. Fill in the tax name (VAT, CST, Service Tax, etc.) and its values.
Click on Save.
Creating Tax Categories
Tax Categories are used if you have different tax rates depending on the type of products you sell.
Create Tax Categories and subsequently, you can add items to that category.
Next, you can create Tax Rules to assign a specific Tax Class to each tax Category.
Tax Category Code can also be the HSN code for some countries
Tax Categories and Product Categories
Product Categories found in the Catalog navigation serve a purpose of classification of your catalog.
Tax Categories allow you to categorize basis taxes. It is possible that two items in the same Product Category may belong to different Tax Categories.
From Taxation settings, select the Tax Category tab.
Click on Add New Tax category
Fill in the category name and code. If you are under an HSN regime, use HSN code for both Name and Category code.
Click on Save.
5. Go to Category SKU Mapping
6. Click on Add New Tax category Mapping
7. Search SKU by name or code to select it.
8. Select the tax category of the SKU.
9. Click on Save.
Tax Rules allow you to use Tax Classes and apply them to transactions based on the source and destination of the physical products involved as well as Tax Categories (Optional) if any.
Creating Tax Rules
Click on Taxation Rules.
Click on the Add taxation rule button in the top right corner of the page.
Provide a 'Name' for the Tax Rule.
Select the 'Selling From' and 'Selling To' fields that correspond to the item you are selling.
Apply the Tax Rule and Tax category from the ones already created.
Tax Application Logic
This section determines how taxes are applied.
Order Discount Application for Tax Calculations
This configuration is for order level discount and you can apply tax either “Before deducting order discount” or “After deducting order discount” as per your requirement.
Order Item Prices (Inclusive or Exclusive of Taxes)
You can configure whether the prices in all your orders will be inclusive or exclusive of taxes. This can be overridden at the channel level as well.
Hierarchy of “tax rules“
Each Rule Assigns a Tax Class and Tax category to a combination of products and locations. Each option has a certain hierarchy as explained below.
Tax Category based hierarchy - If a tax category exists, and it has been used in a rule for a particular set of source and destination locations, then that rule will apply to all SKUs in that tax category. Else, a generic rule will apply.
Country and State Hierarchy - You can keep a generic rule for all countries to keep a standard tax class for all transactions.
A Specific Country-All States rule will override All Countries-All States rule.
A Specific Country-Specific State rule will override Specific Country-All States rule.