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Former Member
Nov 09, 2012 at 10:30 AM

Tax on Sub-contracting components

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Dear All,

As per indian tax laws we need to pay tax on sub-contracting components which will be consumed during GR.

For example-

Sub-contracting PO is created for finished product- A, Qty=1 and cost=100Rs

There is BOM for A

1 qty of A= 2 No of B & 3 No of C.

MAP of B= 25 Rs

MAP of C= 35 Rs

Consumption amount for components= 2*25+3*35

= 155 Rs.

We need to apply tax on this amount-155 Rs.

So there will be tax on Cost of sub-contracting(i.e.-100Rs.) and tax on Components consumed(i.e.-155Rs.). The first part can be handled using regular tax code in PO. But how to handle second part.

Please suggest any solution or SAP note.