Tax Master is a tool designed to create a tax master with various tax components tailored to the business's needs and requirements.

Let's take a look at how it's done.

1. Navigate to MDM > Tax Master Management > Tax Master.

2. Click the Add button.

3. In the Select Tax Type field, choose from the following options:

• VAT (Value Added Tax) is an indirect tax applied only to goods sold within a specific state. This means that both the buyer and the seller must be located in the same state. VAT can only be imposed on tangible items, i.e., physical goods.

• CST (Central Sales Tax) is an indirect tax on goods sold from one state to another. It is applicable when the buyer and the seller are located in different states.

• Excise refers to an indirect tax, meaning that the producer or seller pays the tax to the government and is expected to recover this tax through the price charged to the buyer. Excise taxes are typically levied in addition to other indirect taxes such as Sales Tax or VAT. Common examples of excise duties include taxes on tobacco, alcohol, and fuel.

 Excise taxes differ from Sales Tax and VAT in three main ways:

 Excise taxes generally apply to a narrower range of products.
 They are typically heavier, constituting a larger portion of the retail price of the targeted goods.
 Excise taxes are usually per unit, being a specific amount charged for a volume or unit of the product purchased, while Sales Tax or VAT is proportional to the price of the good.

4. In the Description field, enter a description for the tax.

5. In the VAT% field, provide the VAT percentage.

6. In the CST with C-Form% field, enter the Central Sales Tax percentage with C-Form.

7. In the CST without C-Form% field, enter the Central Sales Tax percentage without C-Form.

8. In the Additional VAT/Surcharge field, specify any extra VAT or surcharges.

9. In the Excise Tax%/CENVAT[%] field, enter the excise tax percentage or the Central Value Added Tax percentage.

Note: CENVAT (Central Value Added Tax) allows manufacturers who purchase duty-paid materials for manufacturing purposes to claim credits in their accounts based on the Central Excise Invoice. When they sell the manufactured goods, they are responsible for paying the excise duty and can adjust their credits accordingly.

For example:

• CENVAT availed at the time of purchasing various goods: ₹30,000.00 (Excise duty alone)

• CENVAT payable for the product at the time of sale: ₹35,000.00

• Therefore, the manufacturer will only pay ₹5,000.00.

• In the Education Cess % field, enter the education cess percentage.

• In the Secondary Education Cess field, specify the amount for secondary education cess.

• Click Save. A message indicating that the tax master was saved successfully will be displayed.

Note: The tax master will appear in the Tax Master list. See Step 1 for reference.

10. Click Send to Outlet to transmit the tax master to the outlet or click Send All to Selected Outlet to send all tax masters in the list to the selected outlet.