hi what is the difference between item sales tax group and sales tax group and also the difference between sales tax and VAT.
Here you can specify the sales tax group code to which this item belongs.
The program will use the tax group code, in combination with the tax area code on the sales line, to determine the sales tax % and the G/L accounts for sales tax posting.
Sales Tax is applicable if you are selling/purchasing material from outside your state & vat is for your state only.
Pressing F1 really helps 
hi manish thanx for ur reply…its very helpfull.