Sales Taxes and Charges Template in ERPNext
The Sales Taxes and Charges Template in ERPNext is used to define tax structures and additional charges that apply to sales transactions such as Sales Orders and Sales Invoices.
It allows businesses to configure flexible tax rules including GST, VAT, shipping charges, insurance, and other invoice-level charges.
Sales Taxes and Charges Templates ensure consistent and automated tax calculation across all sales transactions.
Access Path
You can access Sales Taxes and Charges Template in ERPNext at:
Home > Selling > Settings > Sales Taxes and Charges Template
1. Creating a Sales Taxes and Charges Template
Follow these steps:
- Go to Sales Taxes and Charges Template list and click New.
- Enter a title for the tax template.
- Select the calculation Type.
- Define tax rate or fixed amount.
- Select the appropriate Account Head.
- Mark as default if required for automatic application.
- Save the template.
2. Tax Calculation Types
ERPNext supports multiple tax calculation methods:
- Actual: Direct fixed amount entry (e.g., shipping charges).
- On Net Total: Percentage applied on total item value.
- On Previous Row Amount: Cascading tax based on previous row amount.
- On Previous Row Total: Cascading tax based on cumulative total.
- On Item Quantity: Tax calculated per item quantity (rate × quantity).
3. Key Features
3.1 Consider Tax or Charge For
Defines how the tax applies:
- Total: Applied on entire invoice total
- Valuation: Applied per item for valuation purposes
- Valuation and Total: Applied to both item and total level
3.2 Reference Row Number
Used for dependent tax calculations based on previous rows.
3.3 Tax Included in Basic Rate
If enabled, tax is considered included in item price and is deducted for calculation.
3.4 Account Head
Defines the ledger account where tax is recorded. It must be configured as a Tax account.
3.5 Cost Center
Used for booking income or expense related to tax or charges.
3.6 Rate and Amount
- Rate: Percentage-based tax (e.g., 18 = 18%)
- Amount: Fixed charge (e.g., ₹100)
4. Inter-State Tax Handling (India Specific)
If Is Inter State is enabled:
- IGST is applied when customer and shipping state differ
- CGST/SGST is applied when within same state
- Automatically selected based on GST rules
5. How It Works in Transactions
During Sales Orders and Sales Invoices:
- Selected tax template is applied automatically or manually
- Tax rows are calculated sequentially
- Final invoice total includes all taxes and charges
6. Override with Item Tax Template
Standard tax rates can be overridden using Item Tax Templates or Item Group-level tax settings when specific items require different tax rates.
7. Summary
Sales Taxes and Charges Templates in ERPNext define how taxes and additional charges are applied on sales transactions. They provide flexibility for fixed, percentage-based, and quantity-based taxation while ensuring accurate and automated invoice calculations.
