Tax on invoices: GST, VAT and RCM
You will know where tax rates come from, when to tick Apply RCM, and how Invoice Amount, tax and Amount to Receive or Amount to Pay are worked out on every invoice.
NShine ERP does not hard-code a tax system. You define the rates your country uses under Settings › Tax Rates, and every invoice, expense, fuel entry and service record picks one of them. GST, VAT and zero-rated supplies are all just named rates.
Reverse charge (RCM) is handled with a single switch on the invoice, pre-set from the customer or supplier record.
Tax rates in Settings
Settings › Tax Rates holds a list of Name and Rate pairs. Typical sets are GST 0, 5, 12 and 18 for an Indian company, VAT 5 for a GCC company, or a single zero rate where transport is exempt. Add the rates you file under and deactivate the rest so the invoice drop-down stays short.
Setting | Where | Used by |
|---|---|---|
Tax Rates (Name, Rate) | Settings › Tax Rates | Customer, supplier and purchase invoices, expenses, fuel, maintenance |
TRN (tax registration) | Settings › Company, Customers, Suppliers | Printed on invoices; identifies both parties |
RCM Applicable | Customer and Supplier records | Pre-sets Apply RCM on new invoices |
Round off, No. of Decimal | Settings › Company | How totals are rounded and shown |
Fields on the invoice
Field | What it does |
|---|---|
Tax Rate | Required. One rate applies to the whole invoice; every booking line is taxed at it. |
Apply RCM | Tick when the other party pays the tax directly to the authority. Tax is shown for the record but not added to the amount due. |
Amount (Excluding Tax) | The booking line value before tax. |
Invoice Amount | Sum of the line amounts before tax. |
Amount to Receive / Amount to Pay | Invoice Amount plus tax, unless RCM is on, in which case it equals Invoice Amount. |
How totals are calculated
- Each booking line contributes its Amount (Excluding Tax).
- The lines are added to give Invoice Amount.
- Tax is Invoice Amount multiplied by the Tax Rate.
- Without RCM, Amount to Receive (or Amount to Pay) is Invoice Amount plus tax. With RCM, the tax is recorded as reverse-charge and the amount due stays at Invoice Amount.
- Rounding follows Round off and No. of Decimal under Settings › Company.
When to use RCM
- Customer invoice: tick Apply RCM when the customer is registered and the law makes the recipient liable for the tax on transport services. Set RCM Applicable on the customer so it is pre-ticked every time.
- Supplier invoice: tick Apply RCM when your supplier is unregistered or when you, as recipient, must pay the tax. The amount you owe the supplier excludes tax; the tax is your own liability.
- Do not mix: if one customer needs RCM on some trips and not others, raise separate invoices.
Reports that use the tax fields
- Customer TAX Report and Supplier TAX Report: tax collected and tax paid by rate, from the published custom reports under Reports.
- UAE VAT 201: the VAT return layout for a UAE company.
- Payables TDS Report and Receivables TDS Report: withholding tax where it applies.
- Country detail, including which rates to create and how returns are filed, is in the Country guides section.
Need Help?
Chat with the NShine ERP support team on WhatsApp at +91 79950 87755, or ask from inside the app. Last checked 9 November 2026 against app.nshineerp.com.