VAT amount adjustment

[former_member200650]

Hi,

My client has created one invoice last month, which contains 8 line items with different materials, in which 5th line item has no VAT amount calculated,

Reason is in material master under tax classification tax category was "0" (no tax) instead of 1 (full tax). have told him to change tax classification to 1 so that next time on words system determines VAT amount into document.

Now the current requirement is how to adjust the VAT amount of the 5th line item?

I was thinking the following solutions

1. Create Debit memo to the customer for the difference amount( VAT amount).

2. I heard it can be adjusted through Finance

3. Cancelling the document again creating invoice but here if we cancelling the billing we can cancel only 5th line item but again while reversing the PGI all the line items will be reversed which is actually not required.

Please advise me which one is the best solution?

thanks,

Rakesh.

[Former Member · Accepted solution]

Hi Rajesh,

If the billing doc is released to Account, then cancel the that Billing doc(VF11).

Create the New Bill doc(VF01) w.r.to Del doc., then go to condition tab of that 5th line & delete the VAT condition.

OR update the Header condition with condition type-

G	Copy pricing elements unchanged and redetermine taxes

kindly confirm.

regards,

Vikram

[former_member200650 · Accepted solution]

Hi Vikram,

If the billing doc is released to Account, then cancel the that Billing doc(VF11).
Create the New Bill doc(VF01) w.r.to Del doc., then go to condition tab of that 5th line & delete the VAT condition.

Please let me know how the above solution is helpful to the client requirement.

Client needs to charge customer of the missing 5th line item VAT amount, but again you are saying delete the condition value of VAT amount.

thanks,

Rakesh.

[Former Member · Accepted solution]

Hi Rajesh,

sorry for the misunderstood the requirement.

As,Client needs to charge customer of the missing 5th line item VAT amount-

kindly try as-

Create the New Bill doc(VF01) w.r.to Del doc., then update the Header condition with condition type-

G	Copy pricing elements unchanged and redetermine taxes

Your taxes get updated in the Bill document.

kindly check & confirm.

regards,

Vikram

[former_member200650 · Accepted solution]

No Vikram,

It is not working may be your input( update G) will work when we maintain the condition records for missing condition records.

I need to cancel billing and reverse PGI and delete delivery and create sales order then system is determining Tax amount.

Rakesh.

[mahendra_jani3 · Accepted solution]

Hi Rakesh,

You can go with Invoice correction request (RK) here.

When you will create Invoice correction request, system will copy your Current Invoice Price in First line and In second line you can re-determine all correct values.

This will post necessary TAX account to your side as well as give difference as Debit to Client.

Let us know your observation about the same.

Regards,

MJ.

[former_member200650 · Accepted solution]

Hi Jani,

Thanks for your reply. I checked already still system is not re determining the MWAS condition value while creating the Invoice correction request(ZRK).

I did as below

I won't cancel the 5th line item,and i will keep the tax classification in MM02 for the material as "0" ( no tax) then will create debit memo request where i will get PR00 has some value by default, MWAS will not be determined bcz Tax classification is "0" .

And i will adjust Price value by entering PB00 (manual condition)  equivalent to Tax value which was missing in the original invoice and will create Debit memo. So that customer customer account will be debited and Company Revenue account gets credited so that finally the tax amount will be adjusted, i have tested the above scenario it is fine.

Is this the correct approach?

I also heard we can adjust through Finance, if so please let me know the process to be followed if you already know about this.

thanks,

Rakesh.

[mahendra_jani3 · Accepted solution]

Hi Rakesh,

I will suggest, you change Material Tax Classification for that line item in Material Master to 1.

Or else you can change that value at line item level in RK order also.

If that is maintained, and if you will click on Carry out new pricing for Auto generated second line item it should work conceptually. (This is just an extra option in addition to your approaches.)

Your both approach are good. (Via FI entry as well as SD route.)

Benefit of SD route is you will have reference document number in system.

Benefit of Invoice Correction request (RK) is you will have exact linkage with original invoice against which you have done postings.

Regards,

MJ.

[former_member200650 · Accepted solution]

Hi MJ,

Yes even i do agree with you going with Invoice correction request. But here the MWAS condition is not getting determined when was trying to update(B carry out new price). Even i tried in my IDES system still not getting determined while creating Invoice correction request(RK).

Only it is determining when you are creating document with out reference ex debit memo request or sales order (OR).

Could you test it in your IDES system and let me know if the TAX condition type is determining?

I think i need to go with FI option only because even when i was creating debit memo request or Invoice correction request i was able adjust the Selling price not Tax amount.

Here the difference amount is getting debiting the customer account and crediting to selling price GL account but actually it should be posted to Tax GL account right?

thanks,

Rakesh.

[Lakshmipathi · Accepted solution]

Since it is a one time exercise, I prefer to raise a JV for the difference directly in FI rather reversing the billing document if at all Accounting Document has been generated.  If Accounting Document is not generated, then you can very well update the tax portion by clicking "Update" button in condition tab.

Give the proposals whatever discussed here to your client, ask their preference and accordingly make adjustments in SAP.

G. Lakshmipathi

[former_member200650 · Accepted solution]

Hi G Lakshmipathi,

Thank you for your reply. Yes i would go with FI option only. In my case accouting document generated i think this is reason why system is not updating when i was creating invoice correction request etc.

Thanks to all, am marking it as assumed answer.

thanks,

Rakesh.