Issue With Rate Inclusive Tax | Rate Not Calculating Properly | Rate and Rate Inc Tax | Taxable Value | Round Off Issue | GST Portal | CGST SGST IGST

Sometimes while creating invoice, you might be facing difficulty with Rate Inclusive option that the amount entered in Rate Inclusive column gets changed after saving the invoice. For example, you entered 39,999.00 in Rate Inclusive column with 12% GST. After saving and editing this invoice, it becomes 39,998.99 i.e. a difference of 0.01.

So in this article we will study that why this happened and how it calculates the amount in invoice and what will be the proper solution for this case.

As you type 39,999.00 in rate inclusive column, and tax: 12%, software will follow these steps:

   a. first find rate without tax: 39999/1.12 = 35713.392857142857143

   b. If you have selected 2 digits decimal place, it will round off to: 35713.39

   c. Then it will apply individual tax, if you select Local, it will apply CGST@9% and SGST@9%

 So, total invoice value becomes 35713.39 + 2142.80 + 2142.80 = 39998.99, hence a difference of 0.01

Even GST portal accepts this. Even if you add invoice value as 39999.00, the GST portal still shows 39,998.99. Check below screenshot from portal.

Here is the screenshot of computation done by Tally and Book Keeper.

Solution(s):

1. If you are getting any difference in total invoice value, then you can round off that amount in your invoice. Amount can be rounded off under Other Charges while creating invoice. This will solve your problem to the best. 

2. Another solution is to increase the number of decimal places to at least 5, then create your invoice. This solution is not recommended though because GST portal accepts 2 decimal places only.