Use this feature to define the tax groups or in other words, a tax group for your center. You might define only 1 tax in tax types or several taxes, as per your business need. A tax group is a combination of several taxes. For instance, there might be situations when you wish to apply ‘service tax’ and ‘service charge’ on services and ‘VAT’ on product in the same invoice? Zenoti allows you to apply multiple taxes in a single invoice. You can also define the order in which the taxes need to be applied if service tax is to be applied first, followed by service charge and so on. Further, Zenoti gives you the flexibility to define whether tax will be applied on the base price or the discounted price, if a discount has been given on the service.
Multiple tax structures defined in Zenoti will also be supported in Tally if you use the Tally integration feature.
How can I define tax groups?
To define tax types in Zenoti, perform the following steps:
- Click the Tax Groups link in the Admin mode.
- A list of existing tax types display. Click on any of the Export icons (CSV, Excel, or PDF) to export the list of tax types to other formats.
- Click the Add button on the right pane to define a new tax type or tax group.
- The first step in creating a tax group, the General page is displayed. Enter the following on this page:
- Tax Type Name: Enter a tax type name. Note that a tax type could be just 1 tax or a group of several taxes.
- Description: Enter a description for the tax type.
- Click Next.
- In the second step, the Tax Component page is displayed. Enter the following on this page:
Select a tax component from a list of available tax components. To create additional tax components, please reach out to support.
Note: If you’re shipping products within the US or Canada, you can pick Location Sales Tax from the Component Name drop-down menu. Locations sales tax component is used for products sold online in the United States and Canada. Here sales tax is calculated based on the location to which the products are shipped. For instance, products shipped to California attract 7.5% sales tax while products shipped to Florida are charged at 6%. When this tax component is selected, a list of states along with tax percentage for each state needs to be configured. To configure this, please reach out to support.
- Based on the tax component selected, the tax % shows up automatically. You can also edit the tax %.
- Choose whether you wish to apply the tax on Base price of the service or Discounted price of the service. For example, consider that a service costs. Rs. 1000 and a discount of 10% is applicable on the service. If you choose to apply tax on the Base price, the tax will be applicable on Rs. 1000 and if you choose to apply the tax on the Discounted price, the tax will be applicable on Rs. 900.
- Choose the tax type, such as Simple, Compound, or Surcharge.
- Consider, that a service costs Rs. 2000. If you are creating a service tax of 12.36% and you choose the 'Simple' type, the tax will be applicable on Rs. 2000, that is the service tax would be Rs. 246, that is the customer needs to pay Rs. 2246.
- You can define another tax component called 'CST 1' for example and define the tax percentage as 3% and the tax type as 'Compound'. This means that a 3% tax will be calculated on the base price + simple tax amount. In our previous example, for instance, an additional 3% tax will be calculated on Rs. 2246.
- You can define another tax component called ' CST 2' for example and define the tax percentage as 2.5% and the tax type as 'Surcharge'. This means that a 2.5% tax will be calculated on only the 'tax component' of the total price. In our previous example, for instance, an additional 2.5% surcharge will be calculated on Rs. 246 (the tax amount).
- Choose whether 100% of the service amount is applicable for taxes, or only a portion of the service amount is applicable for taxes in the % of Price for Tax field. For most situations, this would be 100%.
- Create all taxes in this fashion that are used in your organization.
- Click Add.
- The various taxes added show up in the grid. Drag and drop the taxes to define order of execution of tax in an invoice.
- Click Next.
- In the third step in defining tax types, in the Centers page, define the various centers where this tax type or tax group will be applicable.
- Click Finish.
Enabling Taxes for Centers
Once you have defined the various tax types, you can associate taxes with services, products, memberships and so on. To do this, click the Centers link on the Admin mode. Choose the center and go to the Tax Types page to associate these taxes with various items such as services, products, packages, memberships, inventory, and gift cards. To know more about how this is done, read the article 'Modifying Center Settings and Properties'.