01-19-2016 9:25 AM
All,
Need some help on following scenario : International company recently acquired India company and need to setup in SAP. India company don't have manufacturing so we don't have to implement CIN but how to incorporate their "service tax", "VAT", "octroi" in MM PO.
1. Do I need to create new price determination for India plant/company code?
2. They don't use material, they use material groups.
Appreciate if someone can provide steps.
01-19-2016 11:51 AM
Hi Sachin,
Tax calculation happens through tax procedure assigned to country in OBBG. If you are using TAXINN procedure then you have to maintain tax rates along with tax code in FV11. Else you have to maintain tax rates for the tax code itself in FTXP. So you have to check the tax procedure assigned. Here all taxes are available.
Regards,
Mukthar
01-19-2016 9:29 AM
Dear,
Yes you need to setup all the registers of excise and if to have utilization of excise need to do excise settings and need to maintain the data in J1ID.
Look at the SAP document for more info on CIN
Regards,
pardhu
01-19-2016 9:37 AM
I told you that they don't manufacture anything. Why they need to setup all the registers of excise?
01-19-2016 9:48 AM
Dear,
What they really do in Indian company?
If it is only service related activities, then you have less work to go with service tax(As you mentioned only material groups). Create a new pricing procedure for service tax and here take care of SWATCH BHARATH CESS.Create service tax codes and maintain tax condition records as per your requirement.
Maintain OB40/OBYC settings
Please find the SAP document for the same:
Regards,
Pardhu
01-19-2016 11:02 AM
Pardhu,
They are into service industry
They do procure service as well as goods when it comes to procurement. But obviously since they don't manufacture anything they would not be interested or eligible to get cenvat/modvat and thus there is no required to maintain excise registers or CIN functionalities.
My problem is "Service tax + Swatch barath tax", "Octroi" and VAT. I checked their existing PO as well as Invoices. It seems they don't mention any tax details other than "tax as applicable" in their PO and all these taxes are shown during invoicing.
My question is looking into this scenario what should be the best way to configure all these taxes for them i.e. Will it not be better if I avoid all these tax calculation at the time of PO and let Finance team determine it at the time of Invoice creation? Do I need to create new pricing procedure in such case.
If I end up creating tax conditions - can you please identify finance vs mm steps.
Thanks
01-19-2016 11:23 AM
If you are a service receiver too, may of the service tax is with reverse charge mechanism, which means the receiver too will have to pay to the department for the services received.
I would suggest you use tax procedure for the service tax and VAT / CST rather than add a few conditions in the MM pricing schema
01-19-2016 11:41 AM
Ajit - Can you elaborate "reverse charge mechanism" please?
All - Please chime in with your point of view on above scenario.
01-19-2016 11:51 AM
Hi Sachin,
Tax calculation happens through tax procedure assigned to country in OBBG. If you are using TAXINN procedure then you have to maintain tax rates along with tax code in FV11. Else you have to maintain tax rates for the tax code itself in FTXP. So you have to check the tax procedure assigned. Here all taxes are available.
Regards,
Mukthar
01-20-2016 7:18 AM
Thanks Mukthar, Do you think all these 3 types of tax can be taken care during Invoicing through tax procedure and we don't have to make any changes in MM pricing procedure(Please note we don't want the tax rate and amount to be shown in PO)?
01-20-2016 7:50 AM
Hi Sachin,
Service Tax, VAT and Octroi on Service P.O. can be handled using Tax codes.
First you have to create/modify a tax procedure using OBQ3, as per your requirements (keeping reverse charge mechanism in mind).
A new key combination is to be made for country/tax code.
Next Create tax codes using FTXP .
Assign rates to the tax code using FV11 with key combination as created above (using FV11 is useful since validity date concept is there. Changes in tax rates can be handled.)
J1I2 will be a useful report to view tax input amounts.
J2IUN can be used for input service tax utilization.
Regards,
SP