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author's profile photo Former Member
Former Member

dedutible and non deductible tax cin

Hi,

Can any one explain me what are the deductible and non deductible taxes in case of vat .

how we can configure these settings.

regards

veknkat

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    author's profile photo Former Member
    Former Member
    Posted on Jun 19, 2008 at 07:29 AM

    when u will be using VAT deductable in creating tax code use condition type JIP5/JIP7.

    when u will be using VAT non-deductable in creating tax code use condition type

    JIP4/JIP6.

    regards,

    indranil

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  • author's profile photo Former Member
    Former Member
    Posted on Jun 19, 2008 at 07:33 AM

    Hi,

    Based on the account key assigned to condition type in tax procedure, Non-deductable or deductable taxes are calculated.

    For example, go to trancaction OBCN, double-click on NVV and observe, the key is flagged for Non-deductable.

    If this is not flagged, system treats as deductable tax and will be treated during invoice verification.

    I hope you got clarity.

    Regards,

    Archit

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  • author's profile photo Former Member
    Former Member
    Posted on Jun 19, 2008 at 10:01 AM

    In case of some materials, the VAT paid on purchase of these items can be availed back from the goverment, This is called deductible tax. Here VAT portion is not loaded to material inventory, It is posted to a separete GL account as per the config and later stage it will be cleared-off by finance

    In case of non-deductible VAT, the VAT amount will be loaded to material inventory. Here company can not claim this amount back from govt.

    regarding configuration, u have to define a new account key in case of deductible tax and assign gl accounts

    in case of non-deductible tax u can use SAP standard key NVV

    hope this clarifies ur doubt

    award points

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  • author's profile photo Former Member
    Former Member
    Posted on Jun 19, 2008 at 10:50 AM

    Hi,

    Thank you vineeth you cleaed my doubt

    regards

    venkat

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