## Zoho Inventory Documentation Index

Access the complete documentation index at:
https://www.zoho.com/in/inventory/llms.txt

Use this file to discover all available documentation pages before proceeding.

# Taxes

Your business’ financials are affected by the **Goods and Services Tax** to which you must adhere. You may have configured GST in the **Quick Setup** section. Even if you have skipped the quick migration, it is always possible to get it done another time. In this page, you’ll learn about configuring GST Settings, Tax Rates, Tax Exemptions and Default Tax Preference.

*   [GST Settings](/in/inventory/help/settings/taxes.html#gst-settings)
*   [Tax Rates](/in/inventory/help/settings/taxes.html#tax-rates)
*   [Tax Exemptions](/in/inventory/help/settings/taxes.html#tax-exemptions)
*   [Default Tax Preference](/in/inventory/help/settings/taxes.html#tax-preference)

### GST Settings

If you haven’t configured GST in Zoho Inventory, you can configure it in the **GST Settings** tab. To configure:

*   Click the **Gear** icon in the top right corner.
*   Select **Taxes** under _Taxes & Compliance_ in _Organisation Settings_.
*   Select **GST Settings**.
*   Check _Is your business registered for GST?_ option.
*   Enter the **GSTIN** number.
*   If your business is registered under the Composition Scheme, check _Is your business registered for composition scheme?_ option and enter the Composition Scheme Percentage.
*   Click **Save**.

![GST Settings](/in/inventory/help/images/settings/taxes/gst-settings.png)

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### Tax Rates

Once you complete configuring GST Settings, the default GST tax rates are auto-populated in the Tax Rates tab. You can add new tax rates, edit the existing tax rates, delete the tax rates or add a new tax group based on your need.

*   [Adding New Taxes](/in/inventory/help/settings/taxes.html#adding-new-taxes)
*   [Editing Taxes](/in/inventory/help/settings/taxes.html#editing-tax)
*   [Deleting Taxes](/in/inventory/help/settings/taxes.html#deleting-tax)
*   [Adding a New Tax Group](/in/inventory/help/settings/taxes.html#adding-new-tax-group)

#### Adding New Taxes

To create or add a new Tax, follow steps as below:

*   Click the **Gear** icon from the top right corner.
*   Select **Taxes** under _Taxes & Compliance_ in _Organisation Settings_.
*   To add a new tax, click **\+ New Tax**.
*   Enter a _Tax Name_.
*   Enter the relevant _Rate_ in %.
*   Select the relevant GST Tax Type under which your new tax falls.
*   Click **Save**.

![New tax](/in/inventory/help/images/settings/taxes/new-tax-in.png)

_Additional Info_:

> **What is a Compound Tax?**  
> In some countries you might have to collect more than one tax from your customers. It is for you to pay to your local province and another to the federal authority.  
> In certain cases, the provincial tax is applied on the total that includes the item or invoice amount as well as the federal tax amount. Such taxes are called as Compound Taxes.

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#### Editing Taxes

To edit an existing Tax follow steps as below:

*   Click the **Gear** icon in the top right corner.
*   Select **Taxes** under _Taxes & Compliance_ in _Organisation Settings_.
*   Click **Tax Rates** tab.
*   Hover over the desired tax and click the **Edit** button which appears on the right side.

![Edit tax button](/in/inventory/help/images/settings/taxes/tax-edit-delete-in.png)

*   In the Edit Tax screen, edit the desired fields such as _Tax Name_, _Rate_ and select the relevant _Tax Type_.
*   Click **Save** for the changes to take effect.

![Edit tax](/in/inventory/help/images/settings/taxes/edit-tax-in.png)

*   If this tax has already been applied in some transactions, you will be asked to confirm if you wish to update the new tax rate in those transactions as well.

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#### Deleting Taxes

To delete an existing tax follow steps as below:

*   Click the **Gear** icon in the top right corner.
*   Select **Taxes** under _Taxes & Compliance_ in _Organisation Settings_.
*   Hover over the desired tax rate.
*   Click the **Dropdown** and select **Delete**.
*   Click **OK** to confirm your action or **Cancel** to skip.

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#### Adding a New Tax Group

It is customary in some countries to club some taxes under a common head. In such cases you will have to create **Tax Group** which will fulfill this regulatory requirement. To create a Tax Group:

*   Click the **Gear** icon in the top right corner.
*   Select **Taxes** under _Taxes & Compliance_ in _Organisation Settings_.
*   Click the **\+ New Tax Group** option present on the top right corner.
*   Provide a **Tax Group Name**.
*   Select the taxes to be clubbed together by clicking on the check box, next to the desired taxes.
*   Click **Save** to add new tax group.

![Add Tax group](/in/inventory/help/images/settings/taxes/tax-group-in.png)

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### Tax Exemptions

The government has introduced zero rated tax as part of the four slab GST structure. As per the model GST law, 50% of the goods that belong to the [Consumer Price Index (CPI) basket](https://data.gov.in/catalog/all-india-consumer-price-index-ruralurban) are eligible for zero rated tax. So, if you run an organisation that sells zero rated or exempted goods, you can add the reason for tax exemption and choose the same while raising an invoice.

To add Tax Exemptions:

*   Click the **Gear** icon in the top right corner.
*   Select **Taxes** under _Taxes & Compliance_ in _Organisation Settings_.
*   Go to the **Tax Exemptions** section and click **\+ New Exemption**.

![Tax Exemptions Menu](/in/inventory/help/images/settings/taxes/tax-exemptions.png)

*   Enter the reason and description.
*   Choose whether the exemption reason is applicable for an item or a customer.
*   Click **Save** for the changes to take effect.

![Tax Exemptions](/in/inventory/help/images/settings/taxes/new-tax-exempt.png)

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### Default Tax Preference

In Zoho Books, you can select the default tax preference for the **Intra State Tax Rate** and **Inter State Tax Rate**. This tax preference will be applied on the items and transactions by default depending on tax type.

To configure the default tax preference:

*   Click the **Gear** icon in the top right corner.
*   Select **Taxes** under _Taxes & Compliance_ in _Organisation Settings_.
*   Select the **Default Tax Preference** tab.
*   Click the dropdown for each category and select the tax rate which you want to mark as default.
*   Click **Save**.

![Default Tax Preference](/in/inventory/help/images/settings/taxes/add-tax-pref.png)

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