Tax groups

A tax group is a named set of taxes, such as CGST 9% plus SGST 9%, that xMatix applies together to a document line, along with the rules that decide which lines get it. You set tax groups up once in the Sales, Procurement or Tax Center settings. When someone then adds a line to an order, invoice, purchase order, bill or another document, xMatix uses the rules to pick the line's tax group and calculates every tax in it. The taxes then flow into the document totals, the finance posting and the GST returns.

Overview

A tax group has three parts, all managed from the group's record page:

• The group itself. Name, Active and the scope fields Partner Account, Branch and Partner Account Group decide which documents the group can be used on.
• Its taxes (the first list on the Taxes tab). Each Tax is one component with a Name, Tax Type, Rate and Posting Field Name. A line that carries the group gets every one of these taxes.
• Its rules (the second list on the Taxes tab). Each Tax Group Rule says which lines should get this group: an item, SKU, item lot type or item group, a Tax Supply Type and an effective date range.

An item does not store a tax rate or a tax group of its own. Tax group rules are the only link between an item and its taxes. The item's Tax tab lists the rules that name it.

When to use it

• You sell or buy goods at different GST rates and want every line taxed automatically.
• The same item is taxed differently within your state and across states. Create one group for each case and use Tax Supply Type on the rules.
• One company, branch or set of companies needs its own tax treatment. Limit a group to it with the scope fields.
• A rate changes from a known date. End the old rule and add a new one with the new dates.

Prices and discounts are separate masters. See Price lists and Pricing, discounts and taxes.

How xMatix handles it

1. A new line gets a tax group. When a line is added to a document, xMatix:

1. Takes every tax group that is Active and whose Partner Account, Branch and Partner Account Group are empty or fit the document. For Partner Account Group, the document's partner account must be an active member of that account group, and the account group must be of type Tax.
2. Collects the rules of those groups and sorts them by the group's Sequence Number, highest first.
3. Takes the first rule that matches the line:
   • Item, SKU and Item Lot Type are each empty or equal to the line's;
   • Item Group is empty, or the line's item is a member of it (members with Is Active turned off don't count; any item group type works);
   • Tax Supply Type is exactly the same as the document's, and an empty value matches only a document with an empty supply type;
   • the moment the document was created falls between Date Effective From and Date Effective Till.
4. Writes that rule's group into the line's Tax Group.

If no rule matches, the line keeps whatever tax group it already had, for example one copied from the source document, or stays without one.

2. The line's taxes are calculated. Every tax in the line's group is applied to the line's taxable value. That is the quantity, less any cancelled quantity, times the price, less the line's discounts. If the customer's account is set to take discounts after tax, the discounts are not deducted. Each tax amount is stored in the line slot named by the tax's Posting Field Name (Tax1 to Tax6), with its rate, name and type, and the sum becomes the line's tax amount.

3. Edits recalculate, but don't re-choose. When you change a saved line's Tax Group, item, SKU, amount or quantity, xMatix recalculates its taxes from the group the line carries. The rules are not run again, so changing the item on a saved line keeps the old tax group. Change Tax Group on the line yourself if the new item needs a different one.

Some lines are special:

• Lines with no item. A description-only line, such as freight or labour, keeps a tax group you pick yourself. Only an empty one is filled from the rules.
• Discounted Item lines are never taxed, and any tax group on them is cleared.
• Exempt supplies. On a document whose Tax Supply Type is Exempt, lines carry no tax group and no tax. The exception is a reverse-charge bill, where the tax is self-assessed and the group is kept.

Where the supply type comes from. On tenants that file GST, xMatix fills each document's Tax Supply Type from the party's GST registration type, place of supply and your branch's source of supply. The values are Within State, Outside State, Export, SEZ and Exempt. See GST registrations.

The field app. When the field app takes an order offline, it previews the line taxes from the same groups and rules. The preview ignores a rule's Item Group. The server chooses the tax group again when the order syncs, so a figure on an offline order can change after sync.

Document-level tax. The finance view of an invoice also shows a Tax Group, Tax and TCS Eligible Amount on the header. When all three are set and the tax belongs to the group, xMatix stores the tax's rate times TCS Eligible Amount in the header's first tax slot. Changing any of the three calculates it again. The bill form shows the same header fields, but saving a bill doesn't calculate a header tax from them.

Prerequisites

• The items you want to tax exist. Put items that share a rate in an item group if you want one rule per rate rather than one per item.
• For a group limited by Partner Account Group, an account group of type Tax exists with the companies as active members.
• On a GST tenant, your GST registrations and branch source of supply are set up, so that documents get a Tax Supply Type.
• Your security profile lets you create and edit Tax Group, Tax and Tax Group Rule records (see Permissions).

Procedure

Step 1 — Open the tax group register

In the Sales app, select Settings, then Tax Groups in the Pricing & Tax group. The same register is in the Procurement app's Settings (Pricing & Tax), in the Tax Center app, and in the tax settings app under GST Setup.

The list shows each group's Name, Tax Group Type, Partner Account, Branch, Tax Applicability, Active, Created By, Created Date and Modified Date. The All Active Tax Groups view has no filter, so it also lists inactive groups. Check the Active column.

Step 2 — Create the group

1. Select New. The New dialog opens.
2. Enter a Name that says what the group charges, for example GST 18% Intra-state. Names must be unique.
3. Choose a Tax Group Type. Use Line Level for a group that lines will carry. Choose Document Level only for a group used in a document header's Tax Group field. All of its taxes must then use slot Tax1.
4. Optionally enter a Description and a Tax Applicability. Neither changes the calculation.
5. Turn on Active. A new group is inactive until you do, and inactive groups are never chosen automatically.
6. To limit the group, open Partner Applicability and set Partner Account, Branch or Partner Account Group. Leave a field empty to mean "any".
7. Save.

The group's record page opens on the Taxes tab. On a tenant that runs one company or one location, the Partner Account and Branch fields are hidden, and a group applies to the whole tenant.

Step 3 — Add the taxes

1. In the first list on the Taxes tab, select New. A new entry opens in the list.
2. Enter the Name. On a GST tenant, include the component in the name, such as CGST 9%, SGST 9%, IGST 18% or Cess 12%. The GST returns sort each amount by this name (see Business rules).
3. Choose the Tax Type: CGST, SGST, IGST, TCS or TDS. Finance posting uses it to choose the tax account.
4. Enter the Rate as a percentage, for example 9 for 9%.
5. Choose the Posting Field Name: Tax1 to Tax6. Give each tax in the group its own slot.
6. Save the entry.

Repeat for each component. A typical within-state group has CGST on Tax1 and SGST on Tax2. An outside-state group has IGST on Tax1.

Step 4 — Add the rules

1. In the second list on the Taxes tab, select New. A new entry opens in the list.
2. Say which lines the rule covers. Leave a field empty to mean "any":
   • Item: one item;
   • SKU: one SKU of that item (the list shows only the chosen item's SKUs);
   • Item Lot Type: one lot type;
   • Item Group: every item in an item group.
3. Choose the Tax Supply Type: Within State or Outside State. Leave it empty only on tenants that don't classify supplies.
4. Enter Date Effective From and, if the rule should end, Date Effective Till.
5. Leave Service Contract Item empty. It doesn't limit the rule.
6. Save the entry.

The rule gets a number in the TGI series as its Name. A rule with every item field empty matches every line, so it is a catch-all for its group.

Step 5 — Set the sequence when groups overlap

When rules in more than one group can match the same line, the group with the highest Sequence Number wins. Sequence Number defaults to 0 and isn't on the seeded Tax Group forms. If your groups overlap, ask an administrator to add Sequence Number to the Tax Group layouts (see Configuration). Then give the groups with the most specific rules the highest numbers.

Within one sequence number, the order of matching rules isn't defined. Don't let two rules of the same group match the same line, and don't put a catch-all rule in a group that shares its sequence with another group.

Step 6 — Check which group a line gets

1. Create a draft document for the company, branch and customer or supplier you want to test, and save it. Check its Tax Supply Type.
2. Add a line for the item and save it.
3. Open the line and check its Tax Group and its tax amounts.

If the line has no tax group, no rule matched. Work through Common problems.

Step 7 — Change a rate from a date

Don't change the rate on an existing tax, because the new rate would apply to every line that is recalculated, whatever its date. Instead:

1. Create a new group with the new taxes and turn on Active.
2. On the old group's rule, set Date Effective Till. Rules are compared with the moment the document was created. So end the old rule on the day the new one starts, and make sure the new rule's Date Effective From is no earlier than that.
3. Add the same rule (item or item group, supply type) to the new group with the new Date Effective From.

Documents created from that moment get the new group. Lines already saved keep the old group until you change their Tax Group by hand.

Step 8 — Override, retire or delete

• Override one line. Open the saved line, or use the line's Edit, and pick another Tax Group. The taxes are recalculated and your choice is kept. The Tax Group list on lines shows all groups, including inactive ones.
• Change a group's details. On the group's Details tab, edit the fields in place, or select Edit.
• Retire a group. Turn off Active. Its rules stop matching new lines at once. Lines that already carry it keep it.
• Change or remove a tax or rule. Use the row's Edit or Delete on the Taxes tab.
• Delete a group. Select Delete on its record page. Prefer retiring a group that documents still reference.

The group's page has only Edit and Delete in its header. There is no Clone button.

Fields

Tax group

Tax

Tax group rule

The full field lists are in the Tax Group, Tax and Tax Group Rule references.

Business rules

• Only active groups are chosen, and only when their scope fits the document's company, branch and Tax account group membership.
• Sequence is the only tie-breaker. A catch-all rule in a higher-sequence group beats an item-specific rule in a lower one. Specificity never counts.
• Rules are compared with the creation time. A back-dated document entered today is matched against today's rules, not those of its document date.
• Tax Supply Type must match exactly. The seeded rule list offers Within State and Outside State. Documents classified Export or SEZ match no rule unless you add those values to the rule's Tax Supply Type list (see Configuration).
• Rules run when a line is added. Editing a saved line recalculates its taxes but doesn't choose a new group.
• Rates aren't re-applied to saved lines. Changing a tax's rate affects a saved line only when that line is recalculated.
• A tax with no Posting Field Name is added to the line's tax amount but isn't stored in a slot. It is therefore not posted to a tax account and not reported. Two taxes on the same slot overwrite each other on the line, but both are counted in the tax amount.
• GST returns classify by name. Each slot is reported as CGST, SGST, IGST or Cess according to whether the tax's Name contains CGST, SGST or UTGST, IGST, or CESS. A name such as Central tax 9% is not recognised as CGST.
• Finance posting uses the Tax Type. A slot with no Tax Type is skipped when the document's journal is booked.
• Rounding. On bills, invoices and credit notes, tax is rounded per line by default. Set it to per document in the Finance settings (see Configuration).
• Validations: Posting Field Name must be 'Tax1' when Tax Group Type is 'Document Level'. and Date Effective Till should not be Backdated (the till date must be later than the from date).

Example

A distributor files GST from one state and sells soft drinks at 18% GST. The administrator sets this up:

1. An item group GST 18 items containing the soft drinks.
2. A tax group GST 18% Intra-state, Active, with taxes CGST 9% (CGST, 9, Tax1) and SGST 9% (SGST, 9, Tax2). Its rule: Item Group GST 18 items, Tax Supply Type Within State, Date Effective From 1 April 2026.
3. A tax group GST 18% Inter-state, Active, with tax IGST 18% (IGST, 18, Tax1). Its rule: Item Group GST 18 items, Tax Supply Type Outside State, Date Effective From 1 April 2026.

A sales user creates an order for a customer in the same state. The order's Tax Supply Type becomes Within State. They add a line of 10 cases at 500 each with no discount. The line gets GST 18% Intra-state, with CGST 450 in Tax1 and SGST 450 in Tax2, and a tax amount of 900. An order for a customer in another state gets Outside State, so the same line gets GST 18% Inter-state and IGST 900 in Tax1.

Training

Practice exercise

In a sandbox, create the two groups from the example for one item group, then:

1. Create an order for a customer in your state and add a line for one of its items. Expected: the line's Tax Group is the intra-state group, with two tax amounts that add up to 18% of the line value.
2. Create an order for a customer in another state with the same item. Expected: the inter-state group, with one IGST amount.
3. Turn off Active on the intra-state group and add another line to the first order. Expected: the new line gets no tax group, and the first line keeps its group.

Quick reference

• Tax groups are in Sales → Settings → Pricing & Tax → Tax Groups.
• A group is inactive until you turn on Active.
• Taxes: name with CGST, SGST, IGST or Cess; a Tax Type; rate as a percentage; one slot each.
• Rules: empty item fields mean "any"; Tax Supply Type must match exactly.
• Highest Sequence Number wins; add the field to the layout if groups overlap.
• Rules run when a line is added, not when it is edited.
• Change a rate by adding a new group and dated rules, not by editing the rate.
• Override a line by picking its Tax Group after saving.

Permissions

Tax groups, taxes and tax group rules are ordinary records. The seeded Sales, Sales Executive, Sales Manager, Service, Standard User and System Admin security profiles have full access to all three. Seeing, creating, editing and deleting them follows the profile's entity access. No server action needs a separate grant. If you want only administrators to maintain tax setup, remove create, edit and delete access from the other profiles. See Security profiles.

Configuration

Common problems

A line has no tax group

No rule matched. Check, in this order:

• the document's Tax Supply Type is set and is exactly the value on the rule;
• the group is Active, and its Partner Account, Branch and Partner Account Group fit the document;
• the rule's item fields are empty or match the line, and the item is an active member of the rule's Item Group;
• the document was created between the rule's Date Effective From and Date Effective Till.

If the document was saved before you fixed the rule, pick the Tax Group on the line by hand.

A line got the wrong tax group

Look for another group whose rule also matches, especially a catch-all rule with every item field empty. If both groups have the same Sequence Number, the winner isn't predictable. Give them different sequence numbers, or narrow the catch-all rule.

The item changed but the tax group didn't

Rules run only when a line is added. Change the line's Tax Group yourself, or delete the line and add it again.

An export or SEZ order gets no tax

Documents classified Export or SEZ only match rules with that exact Tax Supply Type. Add the value to the rule pick list and create the rules. An Exempt document never carries tax.

Tax shows on the line but is missing from GSTR-1 or posts to the wrong account

Check the group's taxes. Each one needs a Name containing CGST, SGST, IGST or Cess for the returns, a Tax Type for posting, and its own Posting Field Name. If posting stops with No GL account resolved for tax, set up a tax account for that tax type (see GL accounts).

"Posting Field Name must be 'Tax1' when Tax Group Type is 'Document Level'."

The group is Document Level. Set the tax's slot to Tax1, or change the group to Line Level if lines will carry it.

"Date Effective Till should not be Backdated"

The rule's Date Effective Till is on or before its Date Effective From. Enter a later till date, or leave it empty.

Common questions

Why does the rate on a saved order still show the old rate?

Saved lines keep the tax amounts calculated when they were last saved. A line is recalculated only when its tax group, item, SKU, amount or quantity changes. Editing a tax's rate doesn't touch existing lines. That's why a rate change is best handled with a new group and dated rules. Documents created after the change pick up the new group, and older documents keep the tax they were raised with. To update an open document, pick the new group on each line.

Can I set a tax rate on the item?

No. Items carry no tax rate or tax group. Taxes always come from tax group rules, which can name a single item, a SKU, a lot type or an item group. To give many items the same rate, put them in an item group and write one rule per supply type for that group. The item's Tax tab shows the rules that name it directly. Rules that cover it through an item group aren't listed there.

What do Tax Applicability and Tax Group Type do?

Tax Applicability is stored for reference only. Every tax in a group is always applied. Tax Group Type only adds a check: in a Document Level group, every tax must use slot Tax1. A group is used at document level or line level depending on where you pick it, a document header's Tax Group or a line's.

Do purchase documents use the same tax groups?

Yes. Purchase order, requisition and bill lines are matched against the same groups and rules, using the supplier-side document's company, branch and Tax Supply Type. Expense voucher lines take a tax group you pick yourself; see Expense vouchers.

Related topics

• Pricing, discounts and taxes
• Price lists
• Account groups
• Item groups
• Sales order lines
• GST registrations
• The Tax Center
• Tax Group reference