In order to create custom tax agency, follow the steps below:
- Click Taxes on the left menu.
- In Tax Centre, click on Add Tax.
- A drawer slides out from the right. Here, select "Custom tax".
- Enter the Tax Name (eg. Excise Duty, Tax Agency Name gets populated automatically).
- Enter the Description.
- Enter the Registration Number.
- Enter Start of current tax period.
- Select Filing Frequency with this Agency.
- Select Reporting Method (usually it will be Accrual. If in doubt, please consult with your accountant).
- Select what type of transactions this tax is applied (usually it will be for both Sales and Purchase transactions).
- If the tax applied on purchases is reclaimable (eg. CENVAT Credit), check the box "Purchase tax is reclaimable".
- Click Save.
In the Tax Centre, you can now see the new Tax Agency you have just created. If some additional cess is applied for this agency (eg. Education Cess, Higher Education Cess), create custom tax rates for those cess following the steps in Create Custom Tax Rate and then create group tax following the steps in Create Group Tax.