Sales Tax And VAT Setup

How to Setup Sales Tax and VAT In Microsoft Dynamics NAV(Navision)?

To setup Sales Tax And VAT (India) in the Navision you have follow following steps

• T.I.N. Nos
• Form Codes
• States
• Tax Groups
• Tax Jurisdictions
• Tax Details
• Tax Area
• Tax Area Locations

To open the Setup Forms, you have to go to Financial Management --> Setup --> Sales Tax

• T.I.N. Nos

1. Open T.I.N. Nos Form(Financial Management --> Setup --> Sales Tax--> T.I.N. Nos )Code Field: Here you can enter a code for the TIN number assigned by the authorities. You can enter a maximum of 10 characters, both numbers and letters.
2. Description Field: Here you can enter a description for the T.I.N. number . You can enter a maximum of 50 characters, both numbers and letters.

• Form Codes

1. Open Form Codes Form(Financial Management --> Setup --> Sales Tax--> Form Codes )
2. Code Field: Here you can enter a code for the form code for the sales tax. You can enter a maximum of 10 characters, both numbers and letters. egs: enter C for C Form, F for Form F etc
3. Description Field: here you can enter a description for the form code . You can enter a maximum of 30 characters, both numbers and letters. egs: enter C Form, Form F etc
4. C Form Field: Check this to specify that the form to be used as a C form.
5. After doing these pls select any of the line and click Forms(Button) -> Forms
6. There you specify the state code to which C Form exception occur and place a check mark in the issued field.

• States

1. Open States Form(Financial Management --> Setup --> Sales Tax--> States)
2. Code Field: Here you can enter a code for the states. You can enter a maximum of
   10 characters, both numbers and letters. egs: AP for Andhra Pradesh, KL for Kerala etc
3. Description Field: Here you can enter a description for the states . You can enter a maximum of 50 characters, both numbers and letters. egs: Andhra Pradesh, Kerala etc.
4. Define other accounts need to reflect after posting egs: Tax Account(sales), Tax Account (Purchase) etc.

• Tax Groups

1. Open Tax Groups Form(Financial Management --> Setup --> Sales Tax--> Tax Groups)
2. Code Field: Enter the code you want to assign to this tax group. You can enter up to 10 characters, both numbers and letters. It is a good idea to enter a code that is easy to remember. Because the program prints this information on invoices, you may want to use descriptive codes that will be easily understood by your customers. For example, you could enter the tax group code ALCOHOL for alcoholic beverages. egs: 1% ITEMS, 12.5 % , 4 % etc in India.
3. Decription Field: Enter the description of the tax group.

• Tax Jurisdictions

1. Open Tax Jurisdictions Form(Financial Management --> Setup --> Sales Tax--> Tax Jurisdictions)
2. Code Field: Enter the code you want to assign to this tax jurisdiction. You can enter up to 10 characters, both numbers and letters. It is a good idea to enter a code that is easy to remember. egs : VAT, CST and in the Description field specifies the Description of the code.
3. Tax Type Field: Here you select the type of tax you entered as code. ie. VAT or CST
4. State Code: Here you mention the local state code.
5. Enter Tax Account (Sales) and Tax Account (Purchase) numbers.

• Tax Details

In this form, you can set up tax-detail entries. A tax-detail entry includes all of the information that is used to calculate the amount of tax to be charged. Each entry represents a combination of a tax jurisdiction, tax group, tax type (sales or excise), and the date the entry goes into effect.

1. Open Tax DetailsForm(Financial Management --> Setup --> Sales Tax--> Tax Details)
2. Tax Jurisdictions Code Field: Here you can enter the Tax Jurisdictions Code such as CST or VAT representing codes.
3. Tax Group Code: Enter the tax group code for the tax-detail entry. To see a list of available codes, click the AssistButton in the field. egs1%, 12.5 % or 4% type of tax we already defined.
4. Effective Date Field: In this field you can enter from which date on words this tax should applicable.
5. Form Code Field: This field contains the form code which is to be applied to this particular tax combination.

I know you will be confused at the first time updating this, so pls find the following picture for sample updation of this form

• Tax Area

1. Open Tax Area Form(Financial Management --> Setup --> Sales Tax--> Tax Area)
2. Code Field: Enter VAT for VAT and CST for CST
3. Description Field: Enter a description of the tax area.
4. Fill the line part of the form details such as Tax Jurisdictions Code , Calculation order, Include tax base.

For more information see the below image.

• Tax Area Locations

1. Open Tax Area Location(Financial Management --> Setup --> Sales Tax--> Tax Area Location)
2. Type Field: Here you can specify whether the Tax Area Location is being defined for Customers or Vendors.
3. Dispacth/ Receiving Locations Field: Here you assign the location of the dispatch warehouse or receiving warehouse from where movement of goods take place.
4. Customer/ Vendor Location : Here you assign the state code of the customer or vendor.
5. Tax Area Code Field: Here you assign the tax area code applicable based on the combination of the dispatch/receiving location and customer/ vendor state. This Tax Area will be applicable while doing transaction with the customer/ vendor and will be defaulted in the Sales/ Purchase Transaction. egs: VAT, CST etc.

Congragulations you finished all the setups of Sales Tax and VAT in Navision.