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author's profile photo Former Member
Former Member

Tax procedure

HI al,

In MM apart from pricing procedure any tax calculation procedure is available to calculate all type of taxes.

If anybody can explain how taxes are calculated in PO it will be good.

i know discount, fright etc r calculated from pricing procedure

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  • author's profile photo Former Member
    Former Member
    Posted on Jan 07, 2008 at 09:50 AM

    system calcutes the taxes using tax code as u may have see it in the po screen at item level..

    and to calculate like excise on material,

    cst or other taxes i think system pulss the dat form the vendor master because in vendor master u have a button at standard tool bar and this button is known as CIN there u can mention the tax info.

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    • Former Member


      There is two type of pricing procedures,one is our pure MM pricing procedure to calculate Basic price,Discount,freight etc

      Second one is taxprocedure this is FI Persons they will configure taxprocedure.In Indian scenarios there is TAX INN and TAXINJ.In defination itself its saying TAXINN is for Condition based tax procedure and TAXINJ is for Formula based tax procedure.

      Basically there are two types of taxes that is Excise and sales tax.

      In Excise there are Basic excise duty,E cess on Basis Excise duty and finally Secondary and highere education cess on Excise duty.apart from Additional excise duty and Special excise duty its depending upon Material.

      In sales tax also VAT,CST are there.

      For Calculating these taxes first you have to 1)create atxprocedure in Financial accounting-Financial accounting global settings-Basic settings----.

      2)Assign taxprocedures to the country.

      3)create Taxcode.

      4)Specify Nondeductable taxes to the country.

      5)assign G/L accounts for the account key.

      Tha above said one is BAsic settings(essential part)

      Major part is CIN settings.

      1)Excise settings.

      2)Company code setting

      3)Excise group

      4)Plant setting

      5)Series group

      6)Excise transactions setting

      7)Account determanation

      8)Master data.

      Create Material Master and Vendor master.maintain master data for this in J1ID(Chapter ID,Chapter iD and Material Combination,Cenvat determination and Vendor Excise details.)

      Maintain Condition records in FV11 through different Condition types.

      Now u can create Purchase order and in Invoice tab and taxes we can see the tax details.

      Whatever i explained above its for TAXINN>


  • author's profile photo Former Member
    Former Member
    Posted on Jan 07, 2008 at 11:44 AM

    Hello GA,

    As Raghu explained in detail. It was good. And you must configure those steps inorder to capture the Tax, i mean differenet tax elements and once the configuration is done. You need to apply the Tax codes in the PO. And then through the TAX CODE the tax procedure is called to the PO. And TAX is calcualated accordingly (upon your Condition Records that you have maintained for different tax condition types through FV11 transaction code with the allowed key combination)

    And this is how system can calculate the Tax amount in PO.

    Rewards, if it helps,



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