The tax calculation for Pricing in SO

[Former Member]

Hello Gurus,

Goodeve,

This is Poultry Vertical Scenario: This is one the requirement for the client, Let say one customer is buying product , he is applicable for both ZCST & ZVAT, but not at the same time. our clients wants a provision in SAP so that he can sell the material to the customer based on CST or VAT which eve is lower based on his convenience and for tax benifits of the cutomer .looking for your inputs .

Thanks ans regards

Ravi.M

[Lakshmipathi · Accepted solution]

As you would be aware, in sale order, tax is being determined based on the region of delivering plant and ship to party.

This being the case, I am surprised at your comments that you want a lower tax rate and by doing so, you are deviating the statutory regulations. Both VAT and CST are fixed in all states and you have to pay according to the norms stipulated by the Government.

Please convince the client not to deviate statutory regulations.

thanks

G. Lakshmipathi

[Former Member · Accepted solution]

Hi Lakshmipathi,

i think i was not able to explain you correctly.

our clients demands he wants to sell the material to the customer on the benifitial tax rates (VAT or CST) which ever is lower and he wants us to give them the provision for the same in SAP system.

Best Regards,

Ravi.M

[ajitsingh6 · Accepted solution]

Dear,

You incorporate both in your pricing procedure and mainatin Assign both condition type to access sequence such as CUSTOMER/MATERIAL and mainatin your condition record based on Customer.

Regarsd

AJIT K SINGH

HAPPY TO HELP U

Edited by: AJIT K SINGH on Jul 1, 2010 12:01 PM

[Former Member · Accepted solution]

Dear Ravi

CST and VAT are Statuatory requirements. That is, if ur delivering plant is in Maharashtra and if u sell to someone within Maharashtra VAT is applicable, if outside Maharashtra CST is applicable.

U can define Tax classifications in Material master(delivering plant) and customer master(ship to party). Accordingly u can maintain condition record to depending upon to determine relevant tax code applicable.

Revert back for any clarifications.

Regards

Gansub

[Former Member · Accepted solution]

Hi Ravi,

The impact of tax on sales transaction is as follows:

VAT

If Buyer & seller both have registred themselves in same state than only VAT can be charged and the VAT paid by Buyer can be setoff against his laibailty for second point sale.

However the setoff can be claim only if the buyer is registerted with sales tax.

CST

It will apply if buyer & seller is of different states. The concessinal tax can be charged from buyer if he would provide the Form C.

and this Form would be provided if buyer is regsitered with sales tax.

If form C is not being provided than local tax or CST rate which ever is higher would apply on transactions.

I am unable to understand how your client can benfit the buyer i.e by adopting which rule .

better if you can explain with one example.

[Former Member]

Thank you all for your inputs

Regards

Ravi.M