On Product Definition screen, expand the section Tax Information.
Purchase Tax: Enter the value of purchase tax. It is the tax paid by you on purchase items. Select the radio button : At Retail Price or At Purchase Price.
Note: By default, Purchase tax is charged in percentage.
Sales Tax Code: If you have defined tax codes on the Tax Code screen and set their default values, select the code from the drop down. The selected default value of tax will automatically appear in the Sales Tax field.
Enter Sales Tax : Select the radio button Percentage or Value. If tax code (explained above) is selected, the default value for tax will appear in the field. You can opt for tax percentage or value by selecting the required radio button.