tax liability with exempt liability is used on this project invoice but tax free tax code missing

Hi All,

I'm trying to create project invoice and it gives me this error .

 tax liability with exempt liability is used on this project invoice but tax free tax code missing.

The customer is not exempt from tax .

Report code is also with VAT .

Can I know why this error message is coming which seems to be misleading.

Thanks 

Udanee