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Former Member

Overall Tax Concept in relation to SD

Hi All,

Plz let me know the overall concept tax in relation to SD

a) Which all taxes have to be applied.

b) In which condition they are used.

c) From where to configure all these.

Regards,

Ashima

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2 Answers

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    Former Member
    Aug 08, 2008 at 10:43 AM

    Define Tax Determination Rules

    You specify the valid tax types in transaction OVK1. More than one tax type can be defined for a country by defining the sequence.

    The SAP System determines the taxes automatically within pricing.

    In the standard SAP R/3 System, the elements of tax calculation are predefined (for example, tax condition type "MWST" for taxes on sales and purchases).

    Assign the plant for Tax Determination in OX10, using the country key, the SAP System recognizes which tax type is valid for a plant and thus which taxes are relevant when creating an SD document.

    Define the Customer Taxes in OVK3, you will maintain the tax code in Customer Master.

    Define the Material Taxes in OVK4, which will then be maintain in Material Master.

    For example :-

    MWST GST 0 Tax Exempt

    MWST GST 1 Liable for Taxes

    Now, you define the Tax Determination in VK12.

    VK12 - Domestic Taxes/Export Taxes

    Condition Type MWST

    Customer Taxes Material Taxes Rate Taxes

    0 0 0 %

    0 1 0 %

    1 0 0 %

    1 1 9 %

    In this example, if both the Customer Master and Material Master Tax code is 1, Tax will be included when you create the Sales Order.

    Tax Code in Customer Master / Sales Order

    How can we maintain the Tax Code (Tax code - which we maintain in MWST Condtion Records) in Customer Master or in Sales Order?

    There are few points which I would like to remind you:

    1) MWST is a tax condition which is applied to customer to whom we are selling. The rate of tax is depend on various parameteres, whether is fully liable for tax or expemted (in case of Defence Customer)

    2) There are few parameteres which we apply tax condition. Whether customer is tax liable? Whether material is tax exempted?

    For example, if you are selling a goods which are free for tax to any customer, put the Tax Indicator (at MMR as '0'). If your

    material is tax liable pur the Tax Indicator (at MMR as 1). If your customer is not liable for tax at all (like the case of Indian

    Defence organisations) put the Tax Indicator (at CMR as 0) or 1 in case fully tax liable.

    3) Now, at VK11 you need to mainatain your pricning conditions with all the combinations like:

    1 0

    1 1

    0 1

    0 0

    4) While maintaining your Material Master Records or Cusotmer Master Records, you must identify, which are tax liable and which are tax exempeted.

    5) In anycase, as a SAP standard Best Practises, while processing a sales order, you must retrieve a Tax condition record from SAP database only and not entered Manually. Accordingly, at V/06, the MWST condition Defintions, the field for 'Manual Entries', it would be marked as - D (Not possible to process Manually).

    Due to this setting, normally, you cannot maintain Condition tax code during sales order processing. And in Cusotmer Master, you can only maintain Tax Indicator and not Tax Code.

    6) In case your client insists for Manual entry of Tax code during Sales Order processing, you can change the field at point 5) above to C-Manual entry is priority instead of D.

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    Former Member
    Aug 28, 2008 at 06:27 AM

    thnx

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