Ledger postings for Sales Tax / VAT

Below are some of the typical ledger postings related to Sales Tax / VAT.
Purchase invoice posting:-
Dr Stock / Purchase consumption (invoice amount)
Dr Sales tax receivable (tax amount)
               Cr Vendor (invoice amount + tax amount)

Sales invoice posting:-
Dr Customer (invoice amount + tax amount)
               Cr Sales revenue (invoice amount)
               Cr Sales tax payable (tax amount)

Settle the Sales tax payable against Sales tax receivable using GL journal
Dr/Cr is depending on whether the Sales tax receivable is larger or Sales tax payable is larger.
(If Sales tax payable is larger)
Dr Sales tax payable
               Cr Sales tax receivable
               Cr Sales tax settlement

Make payment to tax authorities for the balance of Sales tax payable (now stored in Sales tax settlement)
Dr Sales tax settlement
               Cr Bank

Purchase invoice posting when Use Tax is activated
If GL parameters - Apply US Sales tax and use tax rules = not selected
Dr Stock / Purchase consumption (invoice amount)
Dr Use Tax expense (use tax amount)
               Cr Vendor (invoice amount)
               Cr Use Tax payable (use tax amount)

If GL parameters - Apply US Sales tax and use tax rules = selected
Dr Stock / Purchase consumption (invoice amount + use tax amount)
               Cr Vendor (invoice amount)
               Cr Use Tax payable (use tax amount)

Common account type for the sales tax-related ledger accounts:-
Sales tax payable: Balance
Sales tax receivable: Balance
Sales tax settlement: Liability (Balance)
Use Tax expense: Profit and loss
Use Tax payable: Balance

If GL parameters - Apply US Sales tax and use tax rules = selected, you will not able to specify the Sales tax receivable and Use tax expense in the Sales tax setup\Ledger posting groups.