To set up sales tax

1. Set up the following parameters:

   • In India, sales tax must be paid to the tax office in the place where the goods are issued. Therefore, in the COM Parameters (tccom0000s000) session, you must clear the Destination Sales Tax Applicable check box.
   • In the country definition of India in the Countries (tcmcs0110s000) session, select the Print Tax Exemption check box. If the tax country of an order or invoice is India, LN prints applicable tax exemption certificate numbers on the orders and invoices.

   • In the ACP Parameters (tfacp0100s000), enter the following data:

     • In the Level of Tax Calculation field, select Transaction Line.
     • Clear the North American Purchase Expensed Tax check box.
2. If CST applies to transfer of goods between your warehouses in different states, you must set up an invoiced goods relationship between the warehouses.
3. Set up sequential numbering by tax registration number for sales invoices, as described in Sequential invoice numbering by (own) tax registration number.
4. Define MRP of item for Sales Tax in the MRP of Item (tcibd9139m00l) session for each state.
5. Define assessable value for Sales Tax in the Assessable Value (tcibd9138m00l) session for the item and business partner.

To set up tax codes for sales tax, take the following steps:

1. Set up the required tax codes and tax rates for the country or the state as described in Setting up tax codes by country.

2. In the Tax Codes by Country (tcmcs0136s000) session, enter the following details:

   • In the Kind of Tax field, select VAT.
   • In the Rounding Method field, select Normal.
   • For CST, select the Expense Purchase Tax check box, because this tax is non-claimable and must be booked as costs. .
   • For VAT, clear the Expense Purchase Tax check box, because you can settle payable VAT with paid VAT.

3. For transactions to which a single kind of tax applies, you must set up a single tax code.

   For transactions to which other kinds of tax also apply, you must set up an aggregate tax code. For more information on creating an aggregate tax code, refer to To use layers in aggregate tax and Example of aggregate tax code.

4. Set up tax exceptions
   For business partners or transactions to which different tax rates apply, you can set up tax exceptions. For example, if the business partner is a government department, lower rates can apply. The business partners must provide their exception certificate number. For details, refer to To define a tax exception.
5. Set up tax exemptions
   For business partners or transactions that are exempt from sales tax in specific jurisdictions, you can set up exempt tax codes. For details, refer to To set up tax exemptions.