Tax Classification (Customer Master)

[Former Member]

Hi Gurus,

Needs Clearity on Tax Determination.

I am clear with Pricing for Indian Scenario (CIN - TAXINN and TAXINJ)

Now for these Tax Procedures we maintain some data in Customer Master..

CMR(XD02) > Sales Area Data > Billing Documents (Tab) > Taxes

Here for CIN Scenario we have four Tax Categories

JTX1

JTX2

JTX3

JTX4

For these Tax Categories we maintain Tax Classification

0 - Tax Exempt

1 - Full Tax

2 - 50% Tax

Now I dont have clear idea here what to maintain?? And why do we need to maintain four Categories?? What is the purpose??

Thanks,

Hardik.

[Former Member]

Hi Hardik,

Actually it is not that these Tax Categories are present only in CIN i.e same is used for other countries as well for example in US, which has three levels of Tax classification indicators based on Jurisdiction, county, city.

Basically Multiple tax classifications may need to be set up for special tax rules and regulations based on material/customer. These tax classification indicators are user-defined and point to user-defined tax codes.

If you use UTXJ it is enough, you don't require rest of the Tax classification, but it is useful when you have complicated Tax structures to be determined.

i.e. When the Tax is determined on the basis of Jurisdiction, you can set the level of the Tax jurisdiction levels upto 4. hence if there are 4 levels then the same can be represented by JTX1 to JTX4.

Regarding what values to be maintained, it depends on what combination you want to create.

Regards,

Karthik.

[Former Member]

Dear All,

I have idea about the use of these Tax Categories and Tax Classifications..

But I just wanted to know why they are four??

and if my material is liable for Tax and Customer is also liable to pay Tax OR even in any permutation what to maintain in these Classification...

shall I maintain "1" for every Tax Category OR only one is enough OR it has some specific maintanence required???

Which one will be considered out of FOUR while determining Tax Code??

Thanks..

Hardik.

Edited by: Hardik Patel on Mar 16, 2009 2:47 PM

Edited by: Hardik Patel on Mar 16, 2009 2:48 PM

[Former Member]

hi

go to OVK1 chek for the country and all the four are maintained - here you can delete the other 3and

you can maintain which is required

if required put tax indicator 0 in the material , customer master records for the three condition types

regards

vardhan

[Former Member]

Dear,

Tax categoties we Used in Customer and Material masters

in Customer it is under the tab of sales area data Billing

and In material It under Sales org.1

with these combination we can maintai condition record to get Tax values in sales order

thanks,

Rahul

[Former Member]

These are country specific condition used for taxation purpose.

The Assignment of the tax categories is done in transaction code ovk1, In your case you have many conditions which are taking care for various taxes.

As far as the tax classification is concerned it is used for determining a tax code for a customer based on the condition record maintained in tcode vk11. Say if you maintain o tax as customer tax classification...then the system determienes a tax code during sales order creation which you have maintained in the record ( vk11).

Regards,

Ashok