I am entering my invoices in manager as per the guide. I have made 4 custom tax codes. I have to make payment of the taxes every month. I have created an Account called Sales tax Liabilities under Liabilities group. Now I am not able to understand how the recording of taxes is done and where should I enter my payment details.
First, do not hijack topics. Your question had nothing to do with tax reconciliation. When you bury a question in another topic, you probably will not get answers. So I have moved it to this new topic.
Second, are you sure you need custom tax codes? There are built-in tax codes for more many countries. It is always better to use a built-in code if you can. See this Guide:
Third, if you really need custom tax codes, you still must use the Tax payable account. That is the only way the software will work. So you will have to delete the Sales tax liabilities account you created. Before you can do that, you will have to recategorize every transaction you have ever entered that used it, because Manager will not allow you to delete an account with existing transactions.
Fourth, if your custom tax codes have multiple components or are paid to different tax authorities, see this Guide:
Thanks for your reply. Firstly I apologies for hijacking topics, it was not my intention. Now to my problem, I am from India (Mumbai). We have the following taxes in India:
Central Sales Tax (CST) - 2% - This is levied for sale between two different States.
Value Added Tax (VAT) - 5, 5.5, & 6% - This is levied for sale within the State.
There are no inbuilt tax codes for the above.
Now During Jan-16 till date VAT was revised thrice - from 5% to 5.5% to 6%. So I had to make 4 custom tax codes. Using them is OK, but the problem i am facing is that at the end of the month I make payment to the government separately for VAT and CST from the bank. Now when I enter the details from the bank statement to manager I am not able to assign any account for the tax paid.
You don’t seem to have read the last Guide I linked to in my previous response. It covers exactly the situation you describe, with tax codes made up from components assessed by various authorities, changing at various times, paid on different schedules, etc.
I will not pretend the procedures are simple, but neither is your tax situation.