Item Tax Code Not Being Overriden by Customer Set-Up

We've started experiencing GST inconsistencies on sales transactions, and I think this only started after a recent version upgrade as I don't recall it being an issue in the past.

- Card for existing Customer / Selling Details is set to GST FREE and ticked USE CUSTOMER TAX CODE which we understand has always driven the tax codes on sales transactions.

- Item Codes / Selling Details with Tax Code When Sold of GST with the tick box DESELECTED for Prices are Tax Inc, works fine in the sales transaction

- Item Codes / Selling Details with Tax Code When Sold of GST with the tick box SELECTED for Prices are Tax Inc, does not work in the sales transaction. The item line say FRE however the INC-GST value is being charged.

Thanks in advance.