Sales Order Tax

[former_member832341]

I am having difficulty in finding out how tax conditions are calculated in a sales order. For example I go into Analysis Pricing in a order and see tax conditions but cannot figure out where they are being calculated from and what access sequence is being used. Is there any difference on how normal conditions are setup and taxes are setup? I also notice some tax conditions are showing up twice or three times in analysis but only one has a value.

[Former Member · Accepted solution]

Hi Harvinder,

Tax Is calculated by using following procedure...........

Tax Determination is one of the SD - FI Integration.

FI Team creates calculation procedure and assign this calculation procedure to Country key.

They have to create Tax code by using transaction FTXP.

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.

Thanks,

Raja

[Former Member · Accepted solution]

Hi,

My pricing procedure uses MWST as the condition type for output tax. However, MWST doesn't appear in the Conditions tab in my SO during testing, thus the tax amount doesn't reflect.

I've already added the condition record for MWST in VK11 for both material & customer tax classification. Both material and customer have the same tax classification.

What could be causing this?

Thank you so much!

[Former Member]

Basically you have two condition types JIVC and JIVP for cst and VAT in TAXINN. These have all the different indicators defined for customer as well as material in customising.

These indicators are inserted in the customer master and material master respectively for the resective combination.

For each combination and permutation there is a condition record maintained in VK11. You need a tax code for maitnianing a record which is purely statistical in nature. technically you can use only one tax code to maitain all rates and it will work fine from SD side. But you need to think about FI as well who use these codes to extract reports for CST Form VI and VAT 200, 225, 200A and 200B etc.

So take a little care when you deal with tax codes.

When the sales ordefr is created, the system takes the customer ( ship to party)record and checks what is the indicator given there and similarly for the material what is maintained there. Based on this it looks up the condition record to check what is the value of tax for the combination and what is the tax code.

This is what it uses in pricing. IF you see pricing analysis yo will see the value and tax code.

regds

Jude

[Former Member]

Hi,

MWST is not reflecting in my SO >> Item Detail >> Conditions

In the Pricing Analysis in my SO based on pricing condition (RVAA01 Standard, I found out that MWST Output Tax condition type has been ignored because "Condition ignored (requirement 010 not fulfilled)". What does this mean?

Also, the access sequence had the following error messages:

Access Message Description

08 010 Access not executed (Requirement 008 not fulfilled)

10 010 Access not executed (Requirement 007 not fulfilled)

20 010 Access not executed (Requirement 008 not fulfilled)

What do these mean?

How do I know which one is Requirement 007/008/010 so that it can be fullfilled? And how will these be fulfilled?