Queries Regarding Taxes

[Former Member]

Hello all learned members, I have some basic queries regarding taxes which happens in practical scenario . so I need the advice of learnned members who have practical exposure of taxation in industry.

My Questions are-

1. where we make the provision for taxes ? in pricing procedure or Taxes are applied during billing/invoicing .

2. If I sell services and product together to one customer then tax rates would be different for for both of them. like for example in india service tax is 10.3 % and VAT is 4 % . so do we need different pricing procedure for this?

3. taxes are applicale on base price or price after discount ?

Thanks & Regards-

Abhi

[Lakshmipathi · Accepted solution]

1) Tax will be determined based on the settings from OB40 in combination with an Account Key assigned in your pricing procedure for that tax condition type. If you execute OB40, you can see transactions like MW1, MW2 etc., which should be assigned to your tax condition type in your pricing procedure.

2) You can fetch different tax percent based on having different tax codes assigned in VK11. Hence, one pricing procedure is enough.

3) Generally, in pricing procedure, we have the tax condition type as the last but one before VPRS but there is not wrong if you maintain in the middle of your pricing procedure. It all depends on for what scenario, you need to configure the pricing procedure. There are scenarios where after tax condition type, we need to assign condition types for freight and transport insurance. Client has to take a call as to how they want their FI postings should be.

thanks

G. Lakshmipathi

[Former Member]

My Questions are-

1. where we make the provision for taxes ? in pricing procedure or Taxes are applied during billing/invoicing .

Ans: Yes you can provide taxes in pricing procedure.

2. If I sell services and product together to one customer then tax rates would be different for for both of them. like for example in india service tax is 10.3 % and VAT is 4 % . so do we need different pricing procedure for this?

Ans: No separate pricing procedure is required for Service and product. But product's line item requires a delivery and service Line item not required delivery. u need to define two different condition type for VAT and Service tax and maintain condition record with reference to materials.

3. taxes are applicale on base price or price after discount ?

Ans: That depends upon ur client requiremet, Ideally It should applicable on basic price.

[PhaniKalvagunta]

Hi,

1. where we make the provision for taxes ? in pricing procedure or  Taxes are applied during billing/invoicing . 
In VKOA settings we assign GL accounts and the corresponding Account key is assigned to the condition type in Pricing Procedure
> 2. If I sell services and product together to one customer then tax rates would be different for for both of them. like for example in india service tax is 10.3 % and VAT is 4 % .  so do we need different pricing procedure for this? 
Not required.You can Maintain a single Pricing Procedure
> 3. taxes are applicale on base price or price after discount ? 
VAT is applicable on MRP only

Regards,

Phani Prasad