Separate GL Account Determination for VAT Relieved and VAT Exempted Sales.

[Former Member]

I would like to request your opinion on the Account Determination for VAT Relieved Sales (Customer Does not need pay Value Added Tax) and VAT Exempt Sales (Material is not VATable) in Sales Transaction

The Finance Team of my client here wants a different GL Account Determination for the above sales situation. Hence they want to create new billing type so that it can have a new revenue account determination procedure assigned to each billing type(separate sale order type, delivery type).

[Former Member]

Thank you all for your replies.

[Former Member]

Hi Lakshmipathi

Thank you for your reply.

Here the client does a Tax Reports filing by segregating VAT Relieved and VAT Exempt to the Revenue Authority.

This entire sequence is driven by GL Postings, all the values in a particular invoice should go to separate set of GL Accounts.

Customer is VAT Relieved.

VAT Scenario 1 :- Only the customer is exempt from VAT. In this case the VAT % for the entire sales order will be zero. Then it has to post to a separate set of GL Accounts.

Material has VAT Exemption.

VAT Scenario 2 :- Only the material is exempt from VAT. In this case also the VAT % for that sales order line item will be zero. Then it has to post to a separate set of GL Accounts different from VAT Scenario 2.

The customer is asking for Two Sales Order Type / Two Delivery Type / Two Invoice Types, hence two pricing procedures with different account keys to post to different GL Accounts.

[Former Member]

Hi Hegal K Charles,

Thank you for your reply.

But my opinion, these are not different sales processes but mere VAT Procedures with in Sales Cycle. So is there a need for different sales document type for VAT Relieved and VAT Exempt.

I am thinking of using Order Reason (AUGUR - Order reason) in Account Determination Condition Table.

Then i would have order reason in Sales Order Header for VAT Relieved and VAT Exempt.

Then do VKOA Assignment Setup and Sales Invoice would post to a different GL Account based on Order Reason.

Regards

Mohan

[Lakshmipathi]

Yes as you rightly said, you can go with order reason and include this field to your VKOA assignment. The other option is have two tax codes for this, in OB40, maintain the different G/L Accounts and finally, assign these tax codes to your tax condition type in VK11

G. Lakshmipathi

[former_member209761]

Dear Dakshinamoorthy,

The advantage of going with 2 seperate document type is

1 - It can give a clear distinction between the VAT Applicable and VAT Exempt process to the users.

2 - Reports can be generated seperately.

Thanks & Regards,

Hegal K Charles

[Former Member]

Hi Charles,

Thank you for your reply.

I have maintained two new Sale Order Types, Delivery Type and Billing Types.

Regards

Mohan

[former_member209761]

Dear Dhakshinamurthy,

Since business has agreed for new order types, you may create seperate order types and billing types for your scenarios.

Now you can take the copy of the pricing procedure which is used for any one of the cases now (eg: VAT EXEMPT) and assign the newly created pricing procedure to the new process (VAT RELIEVED) .

In these pricing procedure, you can use different Account keys for both the scenario.

Hence based on the order type the pricing procedure will be triggered.

Based on the pricing procedure , different Account Keys will be triggered and subsequently different G/Ls

Thanks & Regards,

Hegal K Charles