Billing document for SEZ customers w/o TAX

[former_member184966]

Dear Experts,

In my business scenario, one of my customer is from SEZ region. We know there is no TAX liable to those customers but we have to pay 50% of TAX to the government.

Here, I have to create the billing for only service price but not TAX at the same time i should calculate the 50% of TAX from the same and to pay the government.

Is it possible to run with the help of pricing procedure?

thanks

Anand Kumar KS

[amit_tunara · Accepted solution]

Hi Anand,

Please refer this thread where I had a detailed discussion with another user on same requirement.

http://scn.sap.com/thread/3432900

Regards,

Amit

[former_member184966 · Accepted solution]

Hi Amit,

Thank you for your valuable response.

Regards

Anand Kumar KS

[Former Member]

Hi,

Create a new condition for tax copied from the one you use, tick entry in accruals field

Create  sequence Access and add it to your Price schema.

Create data for your new tax condition (VK11) beeing ½ of your current tax values.

Create a new pricing procedure copied from the one your’re using and  customized it to be assigned to your customer sales documents.

In price schema, substitute your current tax condition by the new one, leave blank statistical entry field  and fill account fields with different entries from that of your current tax condition. Finally assign required accounts in VKOA.

Regards,

JM

[ivano_raimondi]

Hi,

you could adapt the solution 1 of SAP note 34526.

This note suggest a way to create free-of-charge document where customer pay or not pay the taxes.

You should not use doscount Z001 (because in your case is not free-of-charge), but you should use Z002 to make customer does not pay taxes, but tax amount is posted on particular account.

Best regards,

Ivano.

[former_member184966]

Dear,

Here, the scenario is about service industry.

We do service to the SEZ customer, we enter only SERVICE PRICE in invoice and there is no taxation for SEZ customer, but we have to pay app. 6% of the tax to the government.

Hope now you got the scenario.

There is no free of charge delivery.

Thanks

Anand Kumar KS

[jpfriends079]

Can you please let us know with an example, what is the accounting entries your client is expecting from this scenario?

Thanks, JP

[former_member184966]

My client has to give the invoice for only SERVICE PRICE to the SEZ customer.

But, here at the same time client has to pay 6% of tax to the government as per the invoice issued to the SEZ customer.

Because, there is a TAX relaxation to the SEZ customers. So, the person/company (who supplies goods/services to the SEZ customer) has to pay the 6% tax.

Thanks

Anand Kumar KS

[jpfriends079]

I understand that. That's why, i asked you regarding expected accounting entries.

For normal customer, once invoice is passed to accounts, the entries will be:

Particular	DR	CR
Customer A/c	1125.00
Revenue A/c		1000.00
Service Tax Payable A/c		125.00

For your scenario, there can be 2 cases:

1. Either you collect the tax amount from the customer. When the frequency of these sort of transaction is not more. Then adjust tax amount you have collected from customer, by issuing a Credit Memo to your customer. 

2. Or include a discount condition type into your existing pricing, say, Service tax adjustment. This condition type will have access either based on customer group or tax classification for customer, say SEZ. And the value of condition record should be 100% of Service tax. This will have following account.

Particular	DR	CR
Customer A/c	1000.00
Service Tax Adjust A/c (This will reduce the receivable from customer)	125.00
Revenue A/c		1000.00
Service Tax Payable A/c		125.00

Where pricing* can be.

Step	Cnd Type(Cond Cat)	Condition Type Desc.	From	To	Value	Acc Key
10	PR00(Price)	PR00 - Price			1000	ERL
20		Gross Price	10	19	1000
30	ZSER(Tax)	Service Tax	20		125	MWS
40		Net Value After Tax	20	39	1125
50	ZTAJ(Discount)	Service Tax Adjust	30		125	ERS
60		Total	40	59	1000

*The above price is for illustration, you might have to look for relevant subtotal, requirement, calculation type, etc. to get a proper pricing

For your reference, Service tax refund norms simplified for SEZs

Thanks, JP

[former_member184966]

Dear JP,

Thank you for your valuable reply.

But, here my client don't wanna calculate the service tax and 100% discount of service tax.

so, the pricing procedure contains only SERVICE PRICE condition type.

Also, my client wants to pay the 50% tax on monthly basis for the SEZ invoices to the govt.

Is there any standard transaction to process it?

Thanks

Anand Kumar KS

[jpfriends079]

I believe you should use deferred tax functionality for your requirement.

Where you will have 2 Tax GL Accounts. One for tax amount is accrued & other for tax payable. When you like to apy the said tax amount to Govt, then transfer the amounts between deferred to payable account using standard Program RFUMSV50.

For further reference, please refer following links on deferred tax

- Deferred Taxes in Business Transactions

- Deferred Tax Customization

- Service Tax Configuration in India (SD)

Thanks, JP

[former_member184966]

Thank you for your valuable support JP.

I hope it helps us & will revert back to you asap.

Thanks

Anand Kumar KS