GST and tax settings for quotes and invoices

On a Leadnote quote or invoice you pick a tax group, and the group decides which tax lines appear. For GST, choose a group with CGST and SGST for supplies within your state, or an IGST group for supplies to another state. Leadnote does not pick between them for you. The steps below work the same on quotes and invoices.

How tax works on a document

Every quote and invoice has a tax level, set in the Settings tab under Apply Tax At:

• Quote Level (or Invoice Level): one tax group applies to the taxable value of the whole document, after discounts. Use it when one rate covers everything.
• Item Level: each line uses its own Tax %, usually copied from the product. The selected group only splits the total tax into its components for display. Use it when you mix rates.

The level is a default for new documents. It cannot be changed from inside an open document. Quotes and Invoices each have their own Settings tab, so set the level, the default group, tax-inclusive pricing and round off in both.

Tax groups

A tax group bundles one or more taxes. Each tax has a name, a code and a rate. Every organisation starts with four groups: GST 18% (CGST + SGST), IGST 18%, VAT 20% and Product level GST.

To create a group:

1. Open the Settings tab of Quotes or Invoices and choose Tax Groups. An Owner or Manager is needed.
2. Under Apply Tax At, choose the level. The list below shows groups for that level.
3. Click Create Tax Group, enter the Tax Group Name, then enter a Tax Name, Tax Code and Rate % for each component. Use Add Tax Component for more.
4. Click the star beside a group to make it the default for new documents, then click Save Settings.

Tax lines on the printout show each component's code and rate, so use clear codes such as CGST, SGST and IGST. Groups are shared by quotes and invoices.

India: CGST, SGST and IGST

To add more rates, go to Settings, then My Organization Profile, and open the Tax card. Choose India as the country and the card lists ready-made groups: GST 5, 12, 18 and 28% as CGST + SGST, the same rates as IGST, nil rated, export, exempt and product level. Tick the ones you want and click Add selected groups. Groups that already exist are skipped. Preset rates are the standard rates at the time of release, so check each one.

In Item Level mode, a group with CGST and SGST splits the total tax into two equal lines. For inter-state supplies, create an item-level group with a single IGST component.

The customer's Tax Number (GST/VAT/TIN) on the Bill To address is printed on the document. Leadnote does not use it, or the customer's state, to choose the tax. See Customer groups and addresses.

Your own tax number on documents

Open the Settings tab of Quotes and of Invoices, and choose Company Details in each. Enter your GSTIN in Tax Reference / GST / VAT Number. It is printed under your company name. If the field is empty, Leadnote prints the GSTIN from your organisation profile instead.

The Tax card in My Organization Profile also lets you set the country, the label used for tax on documents (GST, VAT, Sales Tax) and a registration number. Leadnote checks the format of a GSTIN, including its state code, PAN and check character, but it does not contact the GST portal, so a well-formed number can still be unregistered.

How the total is calculated

The summary panel always works in this order:

1. Subtotal: the sum of quantity times unit price for every line.
2. Discount: a percentage, for the whole document or per line.
3. Net total: subtotal minus discount.
4. Additional costs: fixed or percentage charges. Taxable costs join the taxable value.
5. Taxable value and taxes: at Quote Level each tax component is the taxable value times its rate. At Item Level each line's tax is its net amount times its Tax %.
6. Costs that are not taxable are added.
7. Round off and Grand total.

Example with GST 18% (CGST + SGST): two units at 1,000.00 give a subtotal of 2,000.00. A 10% discount of 200.00 leaves a net total of 1,800.00. CGST is 162.00, SGST is 162.00 and the grand total is 2,124.00. With IGST 18% the tax is one line of 324.00 and the total is the same.

With Prices already include tax (tax-inclusive), Leadnote works backwards. A total of 1,180.00 at 18% shows a taxable value of 1,000.00 and tax of 180.00, split as 90.00 and 90.00.

Rounding

Leadnote rounds each line, each tax component and each cost once, to the smallest unit of the document currency. The default is half up, so 0.005 becomes 0.01. Choose Half even (banker's rounding) in the Tax card if your accountant needs it. A draft follows the current setting, and an issued document keeps the rounding it was issued with.

Round off grand total in the Tax Groups settings can be No rounding or Nearest whole unit. When it is on, the document shows the difference as a Round off line.

Who can change tax settings

Tax groups, additional costs and stages are limited to Account Owners and Managers. The rest of the Settings tab needs permission to edit Settings, which Managers have by default. Anyone who can edit a document can pick a tax group on it. If you bill in other currencies, see Currencies in sales documents.