Merge pull request #51839 from frappe/mergify/bp/version-16-hotfix/pr-51787

fix: recalculate taxes when item tax template changes after discount (backport #51787)

erpnext/accounts/doctype/sales_invoice/test_sales_invoice.py

@@ -2951,6 +2951,60 @@ class TestSalesInvoice(ERPNextTestSuite):
 		self.assertEqual(sales_invoice.items[0].item_tax_template, "_Test Account Excise Duty @ 10 - _TC")
 		self.assertEqual(sales_invoice.items[0].item_tax_rate, item_tax_map)
 
+	def test_item_tax_template_change_with_grand_total_discount(self):
+		"""
+		Test that when item tax template changes due to discount on Grand Total,
+		the tax calculations are consistent.
+		"""
+		item = create_item("Test Item With Multiple Tax Templates")
+
+		item.set("taxes", [])
+		item.append(
+			"taxes",
+			{
+				"item_tax_template": "_Test Account Excise Duty @ 10 - _TC",
+				"minimum_net_rate": 0,
+				"maximum_net_rate": 500,
+			},
+		)
+
+		item.append(
+			"taxes",
+			{
+				"item_tax_template": "_Test Account Excise Duty @ 12 - _TC",
+				"minimum_net_rate": 501,
+				"maximum_net_rate": 1000,
+			},
+		)
+
+		item.save()
+
+		si = create_sales_invoice(item=item.name, rate=700, do_not_save=True)
+		si.append(
+			"taxes",
+			{
+				"charge_type": "On Net Total",
+				"account_head": "_Test Account Excise Duty - _TC",
+				"cost_center": "_Test Cost Center - _TC",
+				"description": "Excise Duty",
+				"rate": 0,
+			},
+		)
+		si.insert()
+
+		self.assertEqual(si.items[0].item_tax_template, "_Test Account Excise Duty @ 12 - _TC")
+
+		si.apply_discount_on = "Grand Total"
+		si.discount_amount = 300
+		si.save()
+
+		# Verify template changed to 10%
+		self.assertEqual(si.items[0].item_tax_template, "_Test Account Excise Duty @ 10 - _TC")
+		self.assertEqual(si.taxes[0].tax_amount, 70)  # 10% of 700
+		self.assertEqual(si.grand_total, 470)  # 700 + 70 - 300
+
+		si.submit()
+
 	@IntegrationTestCase.change_settings("Selling Settings", {"enable_discount_accounting": 1})
 	def test_sales_invoice_with_discount_accounting_enabled(self):
 		discount_account = create_account(

erpnext/controllers/taxes_and_totals.py

@@ -39,17 +39,23 @@ class calculate_taxes_and_totals:
 		items = list(filter(lambda item: not item.get("is_alternative"), self.doc.get("items")))
 		return items
 
-	def calculate(self):
+	def calculate(self, ignore_tax_template_validation=False):
 		if not len(self.doc.items):
 			return
 
 		self.discount_amount_applied = False
+		self.need_recomputation = False
+		self.ignore_tax_template_validation = ignore_tax_template_validation
+
 		self._calculate()
 
 		if self.doc.meta.get_field("discount_amount"):
 			self.set_discount_amount()
 			self.apply_discount_amount()
 
+		if not ignore_tax_template_validation and self.need_recomputation:
+			return self.calculate(ignore_tax_template_validation=True)
+
 		# Update grand total as per cash and non trade discount
 		if self.doc.apply_discount_on == "Grand Total" and self.doc.get("is_cash_or_non_trade_discount"):
 			self.doc.grand_total -= self.doc.discount_amount
@@ -79,6 +85,9 @@ class calculate_taxes_and_totals:
 		self.calculate_total_net_weight()
 
 	def validate_item_tax_template(self):
+		if self.ignore_tax_template_validation:
+			return
+
 		if self.doc.get("is_return") and self.doc.get("return_against"):
 			return
 
@@ -122,6 +131,10 @@ class calculate_taxes_and_totals:
 							)
 						)
 
+						# For correct tax_amount calculation re-computation is required
+						if self.discount_amount_applied and self.doc.apply_discount_on == "Grand Total":
+							self.need_recomputation = True
+
 	def update_item_tax_map(self):
 		for item in self.doc.items:
 			item.item_tax_rate = get_item_tax_map(