Hi,
When we Procure goods from a vendor who is with in the state VAT is Applicable & we have to select the appropriate tax code while creating PO. Normally we assign a seperate GL a/c for VAT in transaction OB40. In T.code OBCN we define whether we want the tax to be considered as a seperate line item or not.
In MM we process VAT during Bill Passing (i.e while doing MIRO), the Vendor will be credited the whole amt including VAT. Since we can claim the VAT which we payed on a raw material during purchase we will take the input credit and post it to a seperate GL but in the case of CST its not possible.
Award Points if useful.
Thanks,
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