Tax (Surcharge)

Owned by Gaurav
Last updated: Jul 26, 2023
4 min read

Overview 

This release introduce "Surcharge Tax" functionality. Surcharge is additional tax on Tax Amount or Taxable Amount or (Tax Amount + Taxable Amount.  

 Database Level Changes 

  1. New checkbox introduce on "Tax Rate" window with name  "IsSurcharge". Tax rate having this checkbox true will be used for selection on "Surcharge Tax" field 

  2. New field introduce on "Tax Rate" window with name "Surcharge Tax". Only those tax rate will show in dropdown that is having "IsSurcharge" checkbox true. 

  3. New field required on "Tax Rate" with name "Surcharge Calculate On". Reference list bind with this field will have below value: 

 

  • Line Amount + Tax, 

  • Line Amount  

  • Tax Amount 

 

  1. New field introduce on order and invoice line with name "Surcharge Amount" (Surcharge Amount field will show on all windows, those are created by using these table C_OrderLine and C_InvoiceLine table) 

  2. New field "Surcharge Amount" introduce on Payment (C_Payment), Cash Journal Line (C_CashLine) ,Bank Statement Line (C_BankStatementLine), Service Contract (C_Contract ), Post Dated Check (VA027_PostDatedCheck) 

 

Any Tax having "Summary level" checkbox true and having parent id, surcharge will not work (all field related to surcharge) need to hide. 

If user use this feature than "Surcharge Amount" field will update otherwise value in this field will be zero. 

Tax rate having "IsSurcharge" checkbox TRUE and tax rate having value in "Parent Tax" field will not show on transcation window and master window for selection. 

Surcharge Calculation (In case of tax include price) 

Below are the example of surcharge calculation 

Amount = 1000 

Tax = 12% 

Surcharge Tax = 2% 

 Tax On Tax 

  1. Calculate 2% of 12%, that is 0.24% 

  2. Add 12% + 0.24% that is 12.24% 

  3. Calculate "Taxable Amount", from 1000 (1000/112.24)*100 that is 890.947968 

  4. Calculate "Tax Amount", 12% on 890.947968 that is 106.913756 

  5. Calculate "Surcharge Amount", 2% on 106.913756 that is 2.1382751 

  6. Sum all the amount (Grand Total = 890.947968 + 106.913756 + 2.1382751) = 999.999999 

On Order/Invoice Tax tab system will create two line: 

  1. Tax 12 % = Taxable Amount = 890.947968 and Tax Amount = 106.913756 

  2. Surcharge 2% = Taxable Amount = 106.913756 and Tax Amount = 2.1382751 

 Tax on Taxable Amount 

  1. Add 12%  + 2% that is 14% 

  2. Calculate "Taxable Amount", from 1000 (1000/114)*100 that is 877.192982 

  3. Calculate "Tax Amount" , 12% on 877.192982 that is 105.263157 

  4. Calculate "Surcharge Amount", 2% on 877.192982 that is 17.543859 

  5. Sum all the amount (Grand Total = 877.192982 + 105.263157 + 17.543859) = 999.999999 

On Order/Invoice Tax tab system will create two line: 

  1. Tax 12 % = Taxable Amount = 877.192982 and Tax Amount = 105.263157 

  2. Surcharge 2% = Taxable Amount = 877.192982 and Tax Amount = 17.543859 

 Tax on (Taxable Amount and  Tax) 

  1. Calculate 2%  (surcharge percentage) from 1000 (1000/102)*100 that is 980.392156 

  2. Calculate "Surcharge Amount", 2% on 980.392156 that is 19.607843 

  3. Calculate "Taxable Amount", 12% from 980.392156 that is 875.350139 

  4. Calculate "Tax Amount", 12% on 875.350139 that is 105.0420 

  5. Sum all the amount (Grand Total =19.607843 + 875.350139 + 105.0420) =999.9999 

On Order/Invoice Tax tab system will create two line: 

  1. Tax 12 % = Taxable Amount = 875.350139 and Tax Amount = 105.0420 

  2. Surcharge 2% = Taxable Amount = 980.392156 and Tax Amount = 19.607843 

Surcharge Calculation (In case of tax exclude in price) 

Below are the example of surcharge calculation 

Amount = 1000 

Tax = 12% 

Surcharge Tax = 2% 

Tax On Tax 

  1. "Taxable Amount" 1000 

  2. Calculate "Tax Amount", 12% on 1000 that is 120 

  3. Calculate "Surcharge Amount" ,2% on 120 that is 2.4 

  4. Sum all the amount (Grand Total =1000 + 120+ 2.4) = 1122.4 

On Order/Invoice Tax tab system will create two line: 

  1. Tax 12 % = Taxable Amount =1000 and Tax Amount = 120 

  2. Surcharge 2% = Taxable Amount = 120 and Tax Amount = 2.4 

 Tax on Taxable Amount 

  1. "Taxable Amount" 1000 

  2. Calculate "Tax Amount", 12% on 1000 that is 120 

  3. Calculate "Surcharge Amount" , 2% on 1000 that is 20 

  4. Sum all the amount (Grand Total =1000 + 120+ 20) = 1140 

On Order/Invoice Tax tab system will create two line: 

  1. Tax 12 % = Taxable Amount =1000 and Tax Amount = 120 

  2. Surcharge 2% = Taxable Amount = 1000 and Tax Amount = 20 

 Tax on (Taxable Amount and  Tax) 

  1. "Taxable Amount" 1000 

  2. Calculate "Tax Amount", 12% on 1000 that is 120 

  3. Calculate "Surcharge Amount" , 2% on (1000+120) that is 22.4 

  4. Sum all the amount (Grand Total =1000 + 120+ 22.4) = 1142.4 

On Order/Invoice Tax tab system will create two line: 

  1. Tax 12 % = Taxable Amount =1000 and Tax Amount = 120 

  2. Surcharge 2% = Taxable Amount = 1120 and Tax Amount = 22.4 

On Cash Journal Line, Bank Statement Line and Payment "Tax Amount" is always included.  

 How to Apply Surcharge Tax 

 On invoice line and order line tax set automatically on the basis of tax preference. However user can change the same manually. On Cash Line, Bank Statement line and payment need to select tax manually. Below is steps for master setting 

Master Setting 

  1. Open Tax Rate window. 

  2. Create new record, Select Surcharge checkbox as true and define the rate of surcharge. 

  3. Create one more record and select above create tax under "Surcharge Tax" dropdown and define rate of tax. 

  4. "Surcharge Calculation Type" field will show on selection of "Surcharge Tax". Select surcharge calculation type. 

  5. "Tax Rate" created under step 3 need to bind with "Tax Category". Create new record on "Tax Category" and choose respective tax rate under "Default tax" field. 

  6. "Tax Category" can be bind with product or charge.