Tax Rate code is not defaulting from Supplier/supplier site while creating invoices in payables

My setup is as follows,

For Tax Regimes, the Party Type is Operating Unit Owning Tax Content and ''Common Configuration with Party overrides'' and ''Common Configuration'' respectively.

In Tax Rules, the default for Determine Tax Applicability is "Applicable'' and Default for Determine Tax Rate is "Input 5"

There is NO TAX RULES created.

For a vendor, we have defaulted the Tax classification code as "VAT EXEMPT" BOTH AT SUPPLIER AND SUPPLIER SITE LEVEL

In the Application Tax Options, Supplier and supplier site has been given ORDER 1 & ORDER 2 RESPECTIVELY for the Operating Unit

When an invoice IS created in payables for this vendor, its still defaulting the tax rate "Input 5" and not "VAT EXEMPT"