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SEZ Customer

Former Member
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Hello,

For SEZ customer there is not tax applicable but the company need to give tax to the govt. ,whenever the company bills the customer this tax need not be printed, but  at the time of consolidated these customer the Finance team should  know about the invoices made to these customer. How can we acheive this? Need your inputs.

Thanks

Sukant Chakraborthy

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Answers (1)

Answers (1)

jpfriends079
Active Contributor
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A similar sort of requirement is discussed in following thread.

- Billing document for SEZ customers w/o TAX

I hope that might be helpful to you.

Former Member
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Thanks JP,

Is sort of, but my requirement is the condition type which is defined for the pricing procedure should not be in the invoice but the invoices should hit the GLs. While making payments the  finance team should the amount to be paid to the govt.How to achieve this can you elaborate with an example, your inputs please.

Thanks

Sukant

amit_tunara
Active Contributor
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Hi Sukant,

You can define a customized condition for calculating Tax which you can exclude from printing in the invoice. By using a ABAP code in Invoice Layout program to add this value to total but not print separately. The amount of this condition can be accrued to a G/L account (Balance sheet account) with a sold-to party. When Finance makes a payment to government, they can knock-off the amount accrued in this G/L Account.

As the amount is available in G/L account with a sold-to party, any time you can see the tax collected from each customer.

I hope this helps.

Regards,

Amit

Former Member
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Thanks amit, can you please give an example how the pricing procedure should be & its setting for invoice & then G/Ls account hit with this condition type.

Thanks

Sukant

amit_tunara
Active Contributor
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Hi Sukant,

Please follow given steps:

You define a normal condition type which may be a copy of any surcharge discount type. Assign a desired access sequence to the condition type so that you can maintain the value of % for tax calculation based on your requirement.

Now, if the tax is to be calculated on gross value, in pricing procedure insert this new condition at appropriate step. This condition type will be a normal condition in pricing procedure with an Accounting key. In transaction VKOA, you can link this account key to a required G/L account. The condition type will be a normal condition in pricing procedure and let it calculate the value of tax depending on condition record defined.

When you create the Sales order, system will calculate this condition in sales order and copy the same when you do invoicing for this sales order.

You can make a copy of standard layout RD00 of Invoice. In this copied version, you do not map the new condition for printing and by small code add the value of that condition to a net total with proper caption like "Total inclusive of Tax".

Since the condition is mapped to a G/L account in VKOA, when the billing document is saved it will post this value to respective G/L account.

Later finance can know-off this G/L account balance when the payment is made to government.

I hope this will help.

Regards,

Amit

Former Member
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Thanks, let me try this & will update.

Former Member
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Thanks Amit,

Can u please give inputs on the pricing  procedure which condition type should be used & how it needs to be done.

Thanks

Sukant

amit_tunara
Active Contributor
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Hi Sukant,

If your tax is to be calculated on item you can copy standard condition K032 or K007 condition if it is for customer. Please note that these standard conditions are discounts so after copying change the field Plus/Minus to Positive so that the charges are added to the total. Whichever condition type you use, please check the access sequence and maintain the condition records for your condition type so that the value is determined in Sales order.

You can use standard pricing procedure RVAA01. You can insert your condition before step 800. Keep the requirement for this condition type as 2 and assign an Accounting Key.

Once this pricing procedure is updated with your condition type, make sure you map the accounting key to a required G/L account using VKOA transaction.

After these settings, the pricing is set in the system. Next step is to sit with your ABAPer and tell him to change the layout as mentioned in earlier replies.

I hope this will help.

Regards,

Amit

Former Member
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Thanks Amit.

This is what the PP what is being configured. your inputs and suggestion please. How will the Condition type ISEZ perform while invoicing. since there are 3 types of Account groups1. Domestic  2. Deemed  Export &  3. SEZ Customers. Is this PP will perform all the function or i need to have different procedure or the only change i need to do is change the customer pricing procedure depending on the account group & have one procedure. Thanks for replying.

amit_tunara
Active Contributor
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Hi Sukant,

If all the types of customer will have the tax amount credited in same G/L account, then using same pricing procedure you can server the purpose. To have these 3 kind of taxes, you can use one of the customer attribute like Pricing group where you can maintain these 3 values and maintain K030 condition on pricing group.

If G/L accounts are also different, then you can create 3 pricing procedure for these groups.

Let me know if you need any further info.

Regards,

Amit

Former Member
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Thanks Amit,

Need your inputs on the procedure in the above reply  or else can you please suggest any pricing procedure with screen shots.  Thanks Sukant Chakraborthy

amit_tunara
Active Contributor
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Hi Sukant,

With reference to above given pricing procedure, I would suggest that if the G/L account is same for all 3 kind of customers, then you can keep the same pricing procedure and maintain your condition ISEZ on Customer pricing group and article basis. Depending on the type of customer system will determine the tax rate and post it to given G/L account.

If the G/L accounts are separate, I would suggest to create 3 copies of the above pricing procedure. In Pricing procedure determination, based on this customer group you determine the respective pricing procedure and based on accounting key it will post the amount to G/L account.

Regards,

Amit

jpfriends079
Active Contributor
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Amit,

I party agree with your suggestion, where you mentioned that Tax amount can be excluded from Invoice printout and still be calculated on SAP Billing doc.

How will G/L account entries will look like?

Can you check & confirm, which is the desired accounting entry for your business scenario?

As per my understanding, they are not suppose to collect tax from customer. But, still they have to pay the tax to Govt. In Normal sales, where tax are collected from customer & price is inclusive of tax, G/L entries will be.

ParticularDRCR
Customer A/c1122.40
Revenue A/c
1000.00
Service Tax Payable A/c
120.00
CESS A/c
2.40
S. CESS A/c
1.20

So, as per my suggestion in Billing document for SEZ customers w/o TAX They have make necessary amendments in there pricing. Price is exclude tax & tax is not to be charged to the customer. And still you need to pay it to the Govt. Then G/L entries will be.

ParticularDRCR
Customer A/c1000.00
Tax Adjustment A/c123.60
Revenue A/c
1000.00
Service Tax Payable A/c
120.00
CESS A/c
2.40
S. CESS A/c
1.20

To achieve this pricing, the pricing procedure can be:

StepC TypeCtype DescFromToCondition RecordCondition Value on Sales DocAcc Key
10PR00Price 1001000ERL
20 Gross Price10 1000
30ITSTITCH Serviec Tax 12%20 12%120MWS
40ITPCITCH Primary CESS 2%30 2%2.4MWS
50ITSHITCH Sec Edu CESS 1%30 1%1.2MWS
70 Total Tax to Collect3050 123.6
80 Total Including Taxes2050 1123.6
90ZADJTax Adjustment(discount Cond Type) - This can be determined based on customer or new customer group as SEZ or new tax classification for SEZ csutomer.70 100%-123.6ERS
100 Total Price 8090 1000

Further, TAX G/L account, talk to business side contact for addition clarity and their business process.

Thanks, JP

amit_tunara
Active Contributor
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Hi JP,

If the tax amount is not be included in the total payable amount by customer, we can make the tax condition Statistical in pricing procedure.

Regards,

Amit

jpfriends079
Active Contributor
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Tax amount statistical.

Did you anytime you tried that or heard of? So, how you are planning to take that to account & pay to the respective authorities? With your statement I can imply that you would require separate pricing procedure to handle these sort of scenario. Correct?

Thanks, JP

amit_tunara
Active Contributor
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Hi JP,

You are right...a tax condition cannot be statistical. Thanks for pointing this.

Regards,

Amit