How to define tax?
You can set and define tax preferences through following the steps mentioned below:
1. From Navigation Menu, go to Configuration module and click on Purchase Orders sub module.
2. Now you will be able to see Tax tab.
3. To create tax click on plus '+' icon from right hand top side.
4. Fill name, rate and type of tax.
5. Click on Create.
You have now created a tax which can be mapped with activity for use. Tax exemption tab is used for create a order which can be exempted from tax ie: Charity. Default tax preferences will define default tax calculation for activity and you may add GST number from GST setting tab if your company has a GSTIN.
Know More: Mapping tax with Products/goods