Tax classes and liquor VAT

In India, alcohol for human consumption is outside GST. A bar charges state VAT on liquor and GST on food and soft drinks, often on the same bill. Tax classes let one outlet tax items differently: food and beverages at GST 5% (CGST 2.5% + SGST 2.5%), liquor at your state's VAT rate, and tax-free items with no tax.

If you don't set up tax classes, nothing changes: every item is taxed with the outlet's taxes, as before.

Setting up tax classes

Go to Settings → Taxes & billing → Tax classes (owners and managers).

1. Click Liquor · state VAT. AirQR turns your current taxes into the default class (Food & beverages · GST 5%) and adds a Liquor class at VAT 20%.
2. Change the VAT rate to your state's rate. Add Tax-free items if you sell anything without tax.
3. For a GST class, set the GST rate, the Split (CGST + SGST for sales in your state, IGST otherwise) and the HSN / SAC code used in GSTR-1 Table 12. Leave it empty to use the SAC from accounting settings.
4. Click Save changes. The Example row shows a bill with food and liquor so you can check the numbers.

One class is the default (marked with a star). Items without a class, packaging and delivery charges are taxed in the default class. Use Make default to change it. Turn off tax classes goes back to one set of taxes for everything.

Each outlet has its own classes. A chain in two states uses the same class names (for example "Liquor") with each outlet's own VAT rate.

Giving items a tax class

In the Menu builder:

• A whole category: open the category's ⋯ → Rename / edit and pick a Tax class, for example Liquor for "Whisky" and "Beer". Tick Also apply to the items that set their own class to bring every item in line.
• One item: open the item and choose its Tax class under Kitchen. Category default means the item follows its category.

How the bill is worked out

• Each item is taxed in its class: "CGST 2.5%", "SGST 2.5%" and "VAT 20% (Liquor)" show as separate lines on the POS, the guest's bill, printed bills and receipts.
• Item offers (like a happy hour on drinks) stay with the items they discount.
• Bill discounts (a manual discount, a bill-level offer, loyalty points) are shared across classes in proportion to each class's value. Example: 10% off a bill with ₹1,000 food and ₹500 liquor takes ₹100 off the food and ₹50 off the liquor.
• Service charge is worked out on the whole bill as before and taxed at the default class (GST). If your state or accountant wants VAT on the liquor part of the service charge, switch on Tax this class's share of the service charge at its own rate for the Liquor class.
• Prices that include tax work the same way: each class's tax is taken out at that class's rate.
• Rounding to the rupee is unchanged.
• Open checks are re-priced with the current classes, so change classes between services, not in the middle of one.

The offline POS uses the same rules and shows the same totals.

Reports and Tally

• GST & accounts leaves liquor (and tax-free items) out of GSTR-1 B2CS and HSN, because they're not GST supplies. The Non-GST · VAT tab shows their value and tax, and a VAT sales report per day and rate for your state VAT return. Report the non-GST value in GSTR-1 Table 8 (non-GST supplies).
• Tally posts liquor to a Liquor Sales ledger and VAT to Output VAT. Rename them in Settings → GST & accounting.
• The full data export includes each item's tax class and the VAT on each bill.

VAT rates differ by state

VAT on liquor sold in restaurants and bars varies by state and sometimes by drink (beer, wine, spirits). Some states charge it on a different value (for example MRP), and some also levy it on service charge. AirQR doesn't decide your rate: it charges what you set. Confirm the rate, the value it applies to, and whether service charge is taxed with your accountant before you start.