tax determination for sales order

[Former Member]

Hi,

As far as my understanding Tax classification for customer or material is responsible for determining the tax in sales order.

______________ Alt.tax classific ___ Tax classific _______ Taxcode ____________ Condition value

determined from Customer master___ Material master ___ Condition Record ______  Condition Record

___________________ 0 _____________ 0 ______________ V1 ______________   0%

___________________ 1 _____________ 0 ______________ V1 ______________   0%

___________________ 0 _____________ 1 ______________ V1 ______________   0%

___________________ 1 _____________ 1 ______________ V1 ______________   10%

Where,

0 - Exempted

1 - Taxable

- TaxClass1-Cust. in customer master (Sales area - Billing tab Taxes)

- Tax class. material in material master(Sales: Sales Org.1 - Tax Data)

2 point to confirm :

1 Can I confirm that ONLY these 2 (CMR and MMR) to determine that if the item is taxable or not?

2 If either one of them not 1, then it is not taxable?

Thanks

[jignesh_mehta3 · Accepted solution]

Hello Banniya,

In General - Yes. One this two (CMR & MMR) determines whether am Item is Taxable or not.

But if we get into specific country & regions requirements, there can be other factors. For example in India we need to consider the Region (State) of Dispatch & Region (State) of Receipt for determining the type of Tax (VAT or CST).

Further we many times also consider the Plant. Some plant are in Tax Free zones (SEZ, STPI, etc). Thus a though the material & customer are same, in some transactions there will be Tax while in some transaction there will be no tax.

Thanks,

Jignesh Mehta