VAT calculation on Freight charge

[Former Member]

Hi

I have an issue related to VAT calculation on Freight Charge.IN normal case the Freight charge is not included for VAT

calculation. Is there any option to include Freight Charge also for VAT calculation.

Say base amount 1000, ED 10%-100,Edu cess 2% -2, High sec.cess 1 %- 1,subtotal -1103, in normal case vat 12.5 is

calculated on 1103, but my requirement is to calculate VAT on (Subtotal -1103+ freight charge- 200) ie 1303.

[Former Member · Accepted solution]

Hi,

Yes, you can include freight charges in to basic then VAT on that. If it is regular process then do as in MM pricing procedure (M/08) for freight condition type under the sub total which Controls whether and in which fieldu2019s condition amounts or subtotals are to be stored. You can enter here routine as 4 it will added to basic( BASB) and VAT calculation as per SAP standard happen on Basic.

If you have this issue only to some restricted vendor or for few transaction then copy the Freight condition & configure same freight condition in MM pricing procedure (M/08) and enter 4 as sub total. It will do the same calculation.

Or the second option is that, if you are using TAXINN procedure then control the % of VAT in the condition record (fv11) assume if your VAT is 12% on 100 & Freight is 10 then total is 110 & on this if you wants calculate VAT of 12% then instead of 12% you can maintain 13.2% to arrive the value of 13.2 on 110. Which means reverse way of calculating VAT. This is common way of doing we also did the same way.

Rgs

[Former Member · Accepted solution]

Hi

For the first option,to create Freight condition in MM pricing procedure, I think it won't work since in this case Freight amount will be included in the base amount for tax calculation, and that is not the requirement.Only after ED , Edu cess, High sec cess

calculation the Freight amount should add to this value for VAT calculation.

for second option if the Freight Amount is different for different PO and we need to edit the condition each time for doing the PO is in efficient.

[Former Member]

Hi

Thank you everybody...

[former_member187989]

Create a new condition type for freight charges & include it pricing procedure after ED subtotal,

based on subtotal for freight VAT will be calculated.

[Former Member]

Hi

please explain some more details of how to configure the Freight condition to be used in Tax procedure,the Freight charge

will be offsetting entry.

[pankaj_singh9]

Hi,

M/06 - Create new Freight Condition type by copying std. condition type "FRB1". Here maintain following;

Control Data 1: -
Cond. class   A Discount or surcharge
Calculat.type B Fixed amount
Cond.category B Delivery costs
Control Dat1 2: -
Activate Currency Conv. and Accruls

M/08 - Add this condition type in MM Pricing Procedure with Subtotal "4".

Now Create PO and Check the Taxes.

[Former Member]

Hi

The Freight charge to be included for VAT calculation and not to be consider for ED calculation so it should be in Tax

procedure we have to add the newly created Freight condition,am I right? please reply.

[former_member187989]

You can enter freight amount in unplanned delivery costs,select VAT tax code.

[Former Member]

Hi,

You are right Bazhira create one Freight condition in Tax procedure only and maintain the freight value in condition record only, also keep that condition as statistical only (only for calculation purpose).

Now while creating PO maintain normal fright condition in pricing schema and also maintain tax condition for calculation purpose only so that VAT will be calculated correctly.

Please revert in case of any doubt.

Thanks & regards,

Vinay

[Former Member]

Hi

Please explain in more details how the Freight charge is maintained as condition record , if different vendor have different Freight charges,whether we can enter the Freight charge as in normal process, i mean to enter the freight charge in Header

condition when we do PO.

[murugan_mgl]

Maintain the condition record in MEK1 & create the condition as Header condition in M/06

[Former Member]

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