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Taxes refunded to customer in credit for Return (RE)?

former_member182378
Active Contributor
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Invoice (F2) was billed to a customer. This invoice had MWST = 6%. Customer paid the invoiced amount.

The goods were returned by the customer due to complaints. We want to give back the money to our customer via credit for Return (RE). How shall this Tax amount be handled (i.e. MWST = 6%)? What would be the configuration settings (e.g. different pricing procedure.......?....)

1. When creating RE order type with reference to OR

2. When creating RE order type with reference to F2

3. When creating RE order type without any reference

I have done some tests in IDES system.

- I see that in VOV8, RE, field Doc pricing procedure = A. & pricing procedure for OR and RE order type are identical. VTAA, OR -> RE, Pricing type = G. VTAF, F2 --> RE, pricing type = D.

- RE order type created with reference to F2, here I am paying back the tax amount too, to the customer, in my credit for Return (RE). Is that correct? Please guide me, as to the best practice(from your experiences).

Thank you, in advance!

Accepted Solutions (1)

Accepted Solutions (1)

Lakshmipathi
Active Contributor
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As you would be aware as per sales tax rule, If the date of returns is beyond 90 days, then you cannot refund the tax.

If it is within this limit, then you can refund the tax. There is nothing special setting required for this. All you have to do is set copy control between original billing to return order and return order to credit note. Even if you generate a return delivery, you can maintain order related billing in your item category setting.

Also if need, you can have a new pricing procedure; else, you can retain the same. But to have the check on tax determination, you have to go for billing exit or write a code in your existing routine.

G. Lakshmipathi

former_member182378
Active Contributor
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Many thanks for your post!

a. Is this sales tax rule applicable all over the world? If you could give me the name or a link, I would read more about it.

b. date of return within 90 days; If I have paid taxes to the government, would I get it back. Who in my organization would be responsible to get that money back from the government?

c. Please explain - "But to have the check on tax determination, you have to go for billing exit or write a code in your existing routine."

As I understand, I have the same Tax classification (in MMR, CMR), and condition type MWST with its condition record. Thus why do I need billing userexit or code?

former_member182378
Active Contributor
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"But to have the check on tax determination, you have to go for billing exit or write a code in your existing routine."

Could you please explain this, it would help me a lot.

(are you saying to "automate" the tax amount in my RE order, depending upon whether return is within 90 days or not)

Many thanks, in advance!

Lakshmipathi
Active Contributor
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Is this sales tax rule applicable all over the world?

It is applicable in India and I am not sure about rest of the countries

If you could give me the name or a link

Whatever I say it is only from my practical experience and hence, I dont have any documentation on that. Better you can check with some tax consultant.

On the billing exit, yes since as I mentioned above, you can give tax credit only if the sale is within 90 days, system should validate this while generating a credit note.

G. Lakshmipathi

Answers (1)

Answers (1)

former_member303858
Contributor
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Hi Typewriter,

We in practical do the same stuff. If its within 90 days then we pass the tax benefit otherwise we dont.

You can have pricing procedure as suggested by Laxmipathi. We are using same PP, its just we remove the tax amounts is its more than 90 days.

Regards,

SB.