Skip to Content

Tax classification 2 for material and customer

Dear Gurus,

I have created a new tax type and done the following configurations:

1. Created new condition table with key fields Departure Country/Destination Country/Tax Class of Cust-2/Tax Class of Mat-2/Material.

2. Created new access sequence and placed the new condition table in it. Requirement 8 and exclusive indicator.

3. Created new condition type and assigned access sequence created above.

4. Maintained entry in Pricing procedure.

5. FI side settings were done by FI consultant (Tax procedure, FXTP etc)

6. Define Tax determination Rules: I assigned the new tax type to the country in which the delivering plant is present, i.e in this case India.

7. Maintain Tax relevancy of master records: - I created customer and material taxes entries - 0 (exempt) and 1 - full tax.

The issue I am facing is this: When I create a sales order, the fields tax classification -2 of material in the billing document tab in sales order item and tax classfication 2 of customer in billing document header are not being picked correctly. Is there any step that I have missed?

Add comment
10|10000 characters needed characters exceeded

  • Get RSS Feed

11 Answers

  • Best Answer
    Oct 12, 2016 at 04:45 AM

    Hi Srinivas,

    If you are using "Tax Class of Cust-2/Tax Class of Mat-2" fields in your tax condition type. So, your that tax condition type which you are referring is in 2nd in sequence to the referred country. That means said condition type will be in 2nd in sequence for the respective Material and Customer Master for the country desired. Hence, you need to check whether your master data are correctly setup or not.

    Refer my response in the following discussion: https://archive.sap.com/discussions/thread/3296866

    Thanks, JP

    Add comment
    10|10000 characters needed characters exceeded

  • Oct 12, 2016 at 07:02 AM

    Hi,

    As per standard, you can only accommodate 9 tax conditions for against one country. And starts from 1, not 0. To have 10th one you can check with SAP Helpdesk. Let me caution you, if you want a custom development. Then technically, you have to make a lot of changes to get this accomdate screen program/program changes in configuration, transaction and master data for this.

    But, strange! For India, we only have maximum 4 type of TAX condition types. That is Excise, CST, VAT and Service Tax. From where you are getting others? Can you provide the list of that?

    Thanks, JP

    Add comment
    10|10000 characters needed characters exceeded

  • Oct 12, 2016 at 06:45 AM

    Thanks a lot JP...I maintained my tax type in 2nd sequence for country IN and it worked...

    Another doubt....since the delivering plant is IN in my sales order, I have maintained the tax type for country IN in Det. tax rules. However for country IN there are already 9 taxes being maintained...there is no additional space for another tax. number 0 is available but by using 0 the tax classification is not being saved in MMR....so the sequence has to start from 1 not 0. Is there a way where I can add a 10th tax type in standard SAP?

    Add comment
    10|10000 characters needed characters exceeded

  • Oct 12, 2016 at 07:03 AM

    Hello Srinivas,

    If 0 to 9 has already used, you can use A to Z to create additional Tax classifications.

    Thanks,

    Jignesh Mehta

    Add comment
    10|10000 characters needed characters exceeded

  • avatar image
    Former Member
    Oct 12, 2016 at 10:05 AM

    Hi Srinivas,

    First Kindly check the sequence in Customer master and Material master Data ( Condition type sequence)

    Whether Both Master data having Same Sequence or not , I think there is some mismatch of Sequence. if yes do the adjustment and check.

    I hope you understand.

    Regards,

    S.M.Prasanna kumar

    Add comment
    10|10000 characters needed characters exceeded

  • Oct 12, 2016 at 09:57 AM

    Tax classification will come only in billing and not in sale order. Of course, through Analysis screen, we can find out which classification, system has considered in sale order. So you need to check what tax classification system is considering during billing.

    Add comment
    10|10000 characters needed characters exceeded

  • Oct 13, 2016 at 04:37 AM

    Hi JP, Lakshmi, Jignesh, Anand,

    In my scenario, the tax applies for a Japanese customer. However, since the delivering plant is in India, the tax type has to be added in OVK1 for India. There are 5 taxes for India currently being used : Service Tax, Ed.Cess on Ser.Tax, Sec.Edu.Cess, Swachh Bharath cess, Krishi kalyan cess. In addition to these 5 another 4 tax types have been assigned to India, but are not being used currently: JTX1Tax Jurisdict.Code d, JTX2Tax Jurisdict.Code d, JTX3Tax Jurisdict.Code d, JTX4Tax Jurisdict.Code d

    These 4 tax types are standard SAP tax types, but are not being used currently in any of their Sales orders (I checked this by getting a dump of KONV and passing these 4 condition types to the field KSCHL - no value returned).

    Is there a way to add a 10th tax type for a country?

    @Jignesh: the table V_TSTL (OVK1) does not accept non-numeric characters for the field Sequence.

    Add comment
    10|10000 characters needed characters exceeded

  • Oct 13, 2016 at 04:49 AM

    Hi Srinivas,

    This means it's export sales from India. Thus, ARE process will come into the picture.

    Further, as I understand, it doesn't make sense to have CESS related tax condition types (Ed.Cess, Sec.Edu.Cess, Swachh Bharath cess, Krishi kalyan cess) to be part of tax classification (TCode in OVK1) configuration. As they get calculated on based on base tax condition types like Excise or Service Tax. Thus, I would suggest you that please have them (CESS related condition type) remove from the OVK1 config.

    Mind you, Edu.CESS or Sec.Edu. CESS is related to Excise, not Service Tax. So, only Swachh Bharath cess, Krishi kalyan CESS is applicable on Service Tax.

    Thanks, JP

    Add comment
    10|10000 characters needed characters exceeded

  • Oct 13, 2016 at 04:18 PM

    Dear JP,

    What is ARE process

    Add comment
    10|10000 characters needed characters exceeded

  • Oct 13, 2016 at 04:19 PM

    If the manufacturing plant is in India and the sale is made outside India, then it is considered as export sales and from excise point of view, you need to create an excise document which is nothing but ARE-1. Search Google with this text if you are not familiar with this process.

    Add comment
    10|10000 characters needed characters exceeded