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Financial Accounting Tax on Sales/Purchases

The taxes on sales/purchases include input tax, output tax, acquisition tax and additional taxes.
In addition to tax codes, percentage rates and tax accounts, you have to specify whether the cash
discount amount reduces the tax base amount, depending on the company code. This reduction is, for
example, possible in Belgium but not in Germany.
The following sections describe the specifications you must make for calculating taxes on
sales/purchases.
Basic ettings
!alculation
"osting
Basic Settings
In the following activities, you make the global settings for the taxes on sales/purchases.
!heck !alculation "rocedure
#ssign !ountry to !alculation "rocedure
!heck and !hange ettings for Tax "rocessing
!hange $essage !ontrol for Taxes
India
#ctivate !ountry %ersion India for pecific &iscal 'ears
!heck !alculation "rocedure
In this activity, you can check and, if necessary, change existing procedures for tax
calculation.
Standard settings
Calculation procedures containing the necessary specifications for the calculation and
posting of taxes on sales/purchases have already been defined in the standard #" system for
certain countries. (very calculation procedure groups several tax types together into a
condition type )for example, output tax or input tax* in the calculation procedure, and
determines calculation rules for it.
The calculation procedure determines for which amount the individual condition types are to
be calculated. This can be the base amount )total of the expense items and the revenue items*
or a subtotal. The entry in column FrmLvl, determines for which amount tax is calculated.
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Note
In this activity, the condition types for the check and the possible change provided in the
standard system are also displayed. +ere, for example, the condition calculation rule, or for
which base amount the tax is calculated is determined ), condition type*.
Recommendation
If possible, do not change the condition types and calculation procedures provided in the
standard system. -nly check the standard condition types and calculation procedures
regarding whether you can use them for your re.uirements. If necessary, make changes.
Activities
If you cannot use the standard settings, change the condition types and calculation procedures
delivered to meet your re.uirements.
#ssign !ountry to !alculation "rocedure
In this activity, you enter the key for the calculation procedure which determines the
conditions which are allowed per document and which defines the se.uence of the conditions
in the document for each country.
Requirements
(ach calculation procedure which you enter must contain the necessary specifications for
calculating and posting the taxes on sales/purchases. &or more information on this, read the
chapter "Create calculation procedure".
Activities
/. #ssign a procedure for tax calculation to every country with which your company has
business dealings.
0. $ake sure that the corresponding data for calculating taxes is stored for each calculation
procedure which you enter here.
!heck and !hange ettings for Tax "rocessing
In this activity you make the necessary specifications for posting taxes. In doing this you
specify under a process key the following indicators1
Tax type
-utput tax, input tax, additional taxes, or 2not tax3relevant2 can be specified as the tax type.
4on deductibility of tax amounts
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&or this, tax amounts are marked as not deductible.
"osting indicator
+ere you specify whether the tax amount is posted separately or distributed to expense or
revenue items.
Tax not relevant to cash discount )4ot discount relevant*
This indicator is set only for !anada. If you select it, the system does not take into account the
corresponding tax amount when determining the tax base.
Standard settings
"rocess keys with the most important characteristics for tax amounts have already been set in
the standard #" system.
Recommendation
5o not change the standard settings. !heck whether you can use these process keys for your
company, making changes only if necessary.
Activities
If you cannot use the standard settings, use new process keys and enter them in your
calculation procedure. 5o not change the standard #" process keys.
Note
'ou must make enhancements to the standard settings if you want to specify a new account key
in the "Create calculation procedure" activity. 'ou must create and maintain this key
beforehand in the 2ettings for tax processing2 activity.
!hange $essage !ontrol for Taxes
In this activity you can set system messages to appear as you re.uire them.
'ou can
determine whether a message is issued as a note in the dialog box or in the footer
change warnings into error messages
switch off warnings and error messages
5ifferent specifications are possible for the online mode and for the batch input sessions
processed in the background.
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'ou can make the corresponding specifications for a client or, if re.uired, also for the
individual user.
The relevant work areas for tax on sales/purchases are 2&2 and 2&&2.
Activities
/. elect the application area.
0. elect Edit -> New entries.
6. (nter the following data1
o $essage number
By selecting the &7 key on the MsgNo field you can find out which messages are available.
o 8ser name
If you enter a name here then the specifications only apply to this particular user. If you enter
2blank2, then the settings apply to all users within the client.
o $essage type
'ou can find out the permitted message type by selecting &7 on the "nline or Batc#$ fields.
o ave your entries. The accompanying message text is inserted automatically.
India
#ctivate !ountry %ersion India for pecific &iscal 'ears
In this activity, you specify for which fiscal years you want to activate !ountry %ersion
India for the accounting interface.
Activities
In the table, maintain data as follows1
Comp. )!omponent*1 $N%
To year: &&&
Active: '
Calculation
In the following activities you make the settings for calculating the taxes on sales/purchases.
5efine Tax !odes for ales and "urchases
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)se
'ou have to define a separate tax on sales*purc#ases code for each country in which one of
your company codes is located.
(ach code contains one or more tax rates for the different tax types.
If you have to report tax3exempt or non3taxable sales to the tax authorities, you need to
define a tax rate with the value +.
Note
5o not delete or change any taxes on sales/purchases codes and their definitions as long as
items with these codes exist in the system.
-therwise, the #" system displays the tax amounts with incorrect tax rates in the
corresponding reports and determines incorrect amounts during a tax ad9ustment for payment
transactions.
Standard settings
#" supplies a tax calculation procedure for each country. The procedure comprises a list of
all common tax types with rules for tax calculation. In addition, example tax codes are
defined for some countries.
Activities
/. !heck the standard tax codes for your country. #dd further tax codes, if necessary.
0. (nsure that tax accounts are defined for the automatic posting of taxes.
Notes on transporting tax codes
:hen tax codes are transported, only the tax rates of the tax codes are transported.
The transport of tax codes between systems or clients is carried out in two steps1
/.step1
(xport of tax codes from the source system or source client
0.step1
Import of tax codes into the target system or target client
,xport
/. In !ustomi;ing for &inancial #ccounting Global ettings in the source system or client,
select Tax on ales!"#rc$ases -> Calc#lation -> %e-ine .ax Codes -or Sales and
/urc#ases.
0. elect Tax code -> Transport -> Export.
6. #ssign the export to the corresponding transport order, and note the order number.
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7. elect and save the tax codes to be transported.
<. $ake sure that the tax codes selected are marked with the transport number in table
T==>%.
To check the table, in the #" menu, select Tools -> A%A" &or'(enc$ -> )verview -> Data
Browser.
(nter the table name. The tax codes are in field $:?@ and the tax 9urisdiction codes are in
fields TAB!5.
C. !arry out the transport into the target system.
To do this, in the #" menu, select Tools -> A%A" &or'(enc$ -> )verview -> &or'(enc$
)rgani*er -> Environment -> Customizing "rganizer.
$mport
/. $ake sure that the tax codes to be transported are selected in table T==>% in the target
system or target client.
0. In !ustomi;ing for &inancial #ccounting Global etting in the source system or client,
select Tax on ales!"#rc$ases -> Calc#lation -> %e-ine .ax Codes -or Sales and
/urc#ases.
6. !reate the tax codes that do not already exist in the target system.
!reate them complete, but 1it#out tax percentage rates.
If you set internal systems in company codes in the 8# or !anada, the corresponding tax
9urisdiction codes should also exist. 'ou can make the settings for these in !ustomi;ing for
&inancial #ccounting Global ettings under Tax on ales!"#rc$ases -> %asic ettings ->
Define Tax Jurisdiction Codes.
7. elect Tax code -> Transport -> +mport.
<. !heck the proposed values for the transport order and country.
C. !arry out the import.
/osting
In the following activities, you set the re.uirements for posting taxes on sales/purchases.
5efine Tax #ccounts
5efine #ccount for (xchange Date 5ifference "osting
#ssign Tax !odes for 4on3Taxable Transactions
5efine Tax #ccounts
In this activity, you specify the accounts to which the different tax types are to be posted. The
system determines these accounts for automatic postings.
Activities
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5efine the tax accounts.
Notes -or t#e transport o- tax accounts
:hen you transport tax codes between different systems or clients, no tax accounts are
transported.
#d9ust the tax accounts in the source and target system )or source and target client* manually.
5efine #ccount for (xchange Date 5ifference "osting
If you use a separate exchange rate for the translation of taxes for postings in foreign
currency or want the exchange rate according to posting date and document date to be
proposed, an exchange rate difference in local currency might result. 'ou must therefore
define an account for the exchange rate difference posting.
Note
'our specifications depend on the chart of account
Activities
(nter the account for the exchange rate difference posting and define posting keys and rules
for it.
3urt#er notes
If you translate the tax amounts using the exchange rate predefined by the tax base amounts,
you need not make this setting.
#ssign Tax !odes for 4on3Taxable Transactions
In this activity you define an incoming and outgoing tax code for each company code, to be
used for posting non3taxable transactions to tax3relevant accounts. Transactions posted like
this are, for exampleE goods issue delivery, goods movement, goods receipt purchase order,
goods receipt production order, order accounting.
Activities
5efine tax codes for non3tax relevant transactions for each company code.
4ogistics 5 6eneral .ax on 6oods 7ovements$ndia
Basic Settings
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7aster %ata
Account %etermination
Business .ransactions
.ools
Basic Settings
$aintain (xcise Degistrations
$aintain !ompany !ode ettings
$aintain "lant ettings
$aintain (xcise Groups
$aintain eries Groups
$aintain (xcise 5uty Indicators
5etermination of (xcise 5uty
elect Tax !alculation "rocedure
$aintain (xcise 5efaults
$aintain (xcise Degistrations
)se
In this I$G activity, you maintain the data relating to your excise registrations.
Activities
(nter each of your excise registrations, specifying a four3character code for each.
$aintain !ompany !ode ettings
)se
In this I$G activity, you maintain the data relating to your company codes.
$aintain "lant ettings
)se
In this I$G activity, you maintain excise information relating to your plants.
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$aintain (xcise Groups
)se
In this I$G activity, you define your excise groups. &or each excise group, you can also
control how various excise invoice transactions will work.
$aintain eries Groups
)se
In this I$G activity, you define the different excise series groups within your company.
eries groups allow you to maintain multiple number ranges for the outgoing excise
documents.
Based on excise regulations and exemptions from the authorities you can maintain multiple
number series for outgoing documents. But each of these series has to be declared to the
excise authorities.
Activities
5efine excise series groups based on type of outgoing document
#ssign series group to excise registration I5
If no financial postings are re.uired for an (xcise invoice in this series group then
you tick the F4o utili;ationF indicator.
If the !(4%#T has to be paid immediately and you need not wait for the &ort nightly
payment then mark the FImmediate 8tili;ationF indicator.
,xample
'ou could define two series groups, group ==/ for excise invoices, and group ==0 for <> &7
documents.
$aintain (xcise 5uty Indicators
)se
In this I$G activity, you maintain the excise duty indicators.
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5etermination of (xcise 5uty
elect Tax !alculation "rocedure
)se
In this I$G activity, you specify which tax procedure you want to use for
determining excise duties and sales taxes on input materials in India.
If you use condition:;ased excise determination< use a copy of the tax procedure
T#AI44.
If you use -ormula:;ased excise determination< use a copy of the tax procedure
T#AI4B.
This tax procedure also supports condition3based excise determination, so that you
can work with both concurrently.
:e strongly recommend that new customers use condition3based excise
determination. 4ote that once you have started using a tax procedure, you cannot
switch to another one, otherwise you will not be able to display old documents.
$aintain (xcise 5efaults
)se
In this I$G activity, you define which tax procedure and pricing condition types are used
in calculating excise taxes using formula3based excise determination.
Activities
If you use condition3based excise determination, fill out the C,- cond. field and leave all
the others blank.
If you use formula3based excise determination, fill out all of the fields as follows1
(nter the tax procedure and the pricing conditions that are relevant for excise tax
processing.
pecify the purchasing and sales conditions types used for ;asic excise duty< additional
excise duty< special excise duty< and cess.
pecify the conditions in the sales order that are used for excise rates.
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pecify the countervailing duty condition type used for import purchase orders.
See also
#" Gibrary 3H Logistics 3H Co#ntry ,ersions 3H Asia-"aci.ic 3H +ndia 3H Materials
Management /MM0 3H Condition-%ased Excise -etermination and 3H Form#la-%ased
Excise -etermination.
7aster %ata
#ssign 8sers to #rticle $aster creen e.uence for (xcise 5uty
)se
In this I$G activity, you customi;e the material master data so that it shows the information
relating to excise duty.
Standard settings
!ountry %ersion India comes with a screen se.uence )I4* that shows the excise duty fields.
'ou have to assign it to each of your users.
Activities
/. 5ouble3click 1ser creen 2e.erence.
0. #ssign all users who need to see the excise duty information to the screen reference I4.
,xample
Name Screen Reference
7$S=RA $N
Account %etermination
5efine G/G #ccounts for Taxes
)se
In this I$G activity, you specify which G/G accounts you will use to record which taxes.
Requirements
'ou have set up G/G accounts for each of the processing keys listed below.
Activities
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#ssign an account to each of the following posting keys. The accounts for %/, %0, and
%6 are used as clearing accounts during excise invoice veri-ication.
%/ )basic excise duty*
%0 )additional excise duty*
%6 )special excise duty*
%< )sales tax setoff*
$: )central sales tax*
$:6 )local sales tax*
(# )service tax*
(( )service tax expense*
pecify (xcise #ccounts per (xcise Transaction
)se
In this I$G activity, you specify which excise accounts )for excise duty and !(4%#T* are to
be posted to for the various transaction types. (nter all the accounts that are affected by each
transaction type.
If you use sub transaction types, enter the accounts for each subtransaction type as well.
Activities
Transaction type 8TG@ is used for determining accounts only while posting excise B%s and
also if the payment of excise duty has to be done fortnightly.
The fortnightly !(4%#T payment utility picks up the credit side accounts from the
transaction types of GD"-, (:"-, and TDC! for determining the !(4%#T and "G#
accounts. There is no separate transaction type for fortnightly payment.
,xample
,xcise .. %C ind Account name
GD"- !D !(4%#T clearing account
GD"- !D DG 06 B(5 account
GD"- 5D !(4%#T on hold account
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pecify G/G #ccounts per (xcise Transaction
)se
In this I$G activity, you assign the excise and !(4%#T accounts to G/G accounts.
:hen you come to execute the various transactions, the system determines which G/G accounts to
post to by looking at the1
(xcise group
!ompany code
!hart of accounts
&urthermore, if you want separate account determination settings within an excise group, you can
also use sub transaction types.
Requirements
'ou have already1
%e-ined t#e 6*4 accounts
%e-ined t#e excise groups
7aintained t#e transaction accounts
Activities
&or each excise group, assign the excise and !(4%#T accounts to G/G accounts. &or most
businesses, one set of accounts will suffice for all transactions.
Note
'ou need not remit the !(4%#T to the excise department immediately, so maintain the credit
account for transaction type 5G&! as an excise duty interim account. This will be set off when you
remit the duty.
Business .ransactions
-utgoing (xcise Invoices
#ssign Billing Types to 5elivery Types
$aintain 5efault (xcise Groups and eries Groups
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ubcontracting
$aintain $ovement Type Groups
8tili;ation
8tili;ation 5etermination
$aintain $inimum Balances for (xcise #ccounts
(xcise Degisters
pecify #" script &orms
-utgoing (xcise Invoices
#ssign Billing Types to 5elivery Types
)se
'ou enter outgoing excise invoices by referring to either of the following documents1
!ustomer invoices
"ro forma excise invoices
These options are represented in the system by different document types and
document flows.
In this I$G activity, you1
pecify which billing document types you use as a reference for !(4%#T
utili;ation
#ssign them to the appropriate delivery document types
Requirements
'ou have set up the delivery types and copy control as follows1
!reate separate delivery types in !ustomi;ing for Logistics Exec#tion )G(*,
by choosing $ipping 3H -eliveries 3H -e.ine -elivery Types.
et up copy control for the delivery types in !ustomi;ing for G(, by choosing
$ipping 3H Copying Control 3H peci.y Copy Control .or -eliveries.
!reate billing types in !ustomi;ing for ales and -istri(#tion )5*, by
choosing %illing 3H %illing -oc#ments 3H -e.ine %illing Types.
et up copy control for the billing types in !ustomi;ing for 5, by choosing
%illing 3H %illing -oc#ments 3H Maintain Copying Control .or %illing -oc#ments.
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Standard settings
In the standard system, there are two document flows that you can use1
tandard order )document type -D* 3H -utbound delivery )G&* 3H "roforma
excise invoice )B(A* 3H Invoice )&0*
tandard order )-D* 3H (xcise invoice )B&* 3H Invoice )&0*.
'ou can use these settings if you wish, or alternatively, you can make copies of these
document types and copy control settings.
Activities
#ssign a !(4%#T reference billing type to each delivery type.
$aintain 5efault (xcise Groups and eries Groups
)se
In this I$G activity, you specify which excise group and series group you want to
appear in these fields by default. 'ou can make separate settings for different
combinations of sales organi;ation, distribution channel, division, and shipping point.
Activities
This activity is optional, unless you want the system to automatically create outgoing
excise invoices when you create a customer invoice.
In this case, you must also make the appropriate setting in !ustomi;ing for Excise
-#ty, by choosing %asic ettings 3H Maintain Excise 3ro#ps4 and selecting Create E+
)!reate (xcise Invoice #utomatically*.
ubcontracting
$aintain $ovement Type Groups
)se
In this I$G activity, you group movement types together to form movement type
groups
8tili;ation
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8tili;ation 5etermination
)se
In this I$G activity, you specify which !(4%#T accounts are to be debited by the
3ortnig#t )tilization o- C,N>A. report1 :hen the report calculates how much excise
duty you must remit, it automatically proposes which !(4%#T accounts the duty should
be debited to. +ere, you specify those defaults.
'ou can either1
5ebit all the excise duty to one account
5ebit the excise duty to more than one account, in which case you specify which
percentage is to be debited to each account
,xample
If you want <=I of basic excise duty )B(5* to be debited to the DG 06# account and the
remaining <=I to the DG 06! account, you would make the following settings1
Acct name B,% perc.
DG 06# B(5 account <=
DG 06! B(5 account <=
#lternatively, to debit all of the B(5 to the DG 06# account, and then DG 06! account,
if there is not enough in the DG 06# account, you would make the following settings1
Acct name B,% perc. ?
DG 06# B(5 account A
DG 06! B(5 account A
:hen you come to run the report, the system takes the DG 06# account because it is the
first one you have entered. If this account does not cover the B(5, the system takes the
DG 06! account instead.
$aintain $inimum Balances for (xcise #ccounts
)se
In this I$G activity, you can maintain minimum balances in your excise accounts.
:hen the balance in these accounts during utilization falls below this level, the
system automatically utili;es funds in the "G# account.
Activities
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$aintain the minimum balance amount for the excise accounts. If you have more than
one excise group, you can maintain different minimum balances.
(xcise Degisters
pecify #" script &orms
)se
In this I$G activity, for each of your company codes, you specify which #"script forms
the system prints the excise registers with.
Standard settings
!ountry %ersion India includes a number of sample #"script forms and printing
programs, which you can use as follows1
Reg. name
4ay.
no.
3orm .code*/rog
DG 06# "art I / BJ0IDG06#J"#DT/ BJ0ID#"/
DG 06! "art I / BJ0IDG06!J"#DT/ BJ0ID!"/
DG 06# "art II / BJ0IDG06#J"#DT0 BJ0ID#"0
DG 06! "art II / BJ0IDG06!J"#DT0 BJ0ID!"0
"G# / BJ0IJ"G# BJ0I"G#
DG 06 5 / BJ0IJDG065 BJ0IDG06
DG / / BJ0IJDG/ BJ0IDDG/
DT /0 / BJ0IJDT/0J#BTD# BJ0IDT/0
DT /0 / BJ0IJDT/0J#BTD# BJ0IDT/0
DT /0 / BJ0IJDT/0J6 BJ0IDT/0
The layout description can be left blank or an appropriate description maybe filled in.
'ou may not change the register name. 'ou can have your own layouts and maintain the
name here. If the output device and number of copies are maintained it is automatically
picked up for printing.
.ools
4umber Danges
'ou can maintain the number ranges for all !I4 4umber range ob9ects using this transaction
Activities
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"lease maintain the number ranges for the folllowing ob9ects The no nr has to be F=/F for all
/. 9J/iintnum
#t an (xcise group
/. 9J/irg06a/
0. 9J/irg06a0
6. 9J/iDG/
7. 9J/irg06c/
<. 9J/irg06c0
C. 9J/ipla0
>. 9J/iintpr0
K. 9J/irg06d
L. 9J/irg/Jt ) material level*
/=. 9J/iconpla ) if !onsolidated "G# is used *
#t eries group
/. 9J/iexcloc
0. 9J/iexcexp
6. 9J/idepinv
7. 9J/i<>&c ) <>& !hallans *
$essage !ontrol
In this activity, you can specify whether a given message should appear as a warning
message or an error message.
Activities
(nter each message that you want, specifying whether it should apply to one user or all users.
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SAP SD TCodes For India
Transaction Action:
B/I0 3 "repare a sales tax register
B/I6 3 !reate outgoing excise invoices in batches
B/I< 3 8pdate the DG / and "art I registers
B/I(A 3 Incoming (xcise Invoices )central transaction*
B/I(AJ! 3 !apture an incoming excise invoice )excise clerk*
B/I(AJ" 3 "ost an incoming excise invoice )excise supervisor*
B/I&=/ 3 !reate a subcontracting challana
B/I&// 3 !hange a subcontracting challan
B/I&/0 3 5isplay a subcontracting challan
B/I&/6 3 !omplete, reverse, or recredit a subcontracting challan
B/I&M 3 Deconcile .uantities for subcontracting challans
B/I&D 3 Gist subcontracting challans
B/I+ 3 $ake a !(4%#T ad9ustment posting
B/II4 3 !reate an outgoing excise invoice
B/IB 3 #ssign excise invoices to a delivery for sales from depots
B/I4B% 3 #d9ust withholding tax Item
B/I4D(" 3 Deprint a withholding tax certificate for a vendor
B/IM 3 'ear3(nd Income Tax 5epreciation Deport
B/ID 3 5ownload register data
B/I 3 "rocess an excise invoice )outgoing* for other movements
B/I8 3 "rocess exemption forms
B/I: 3 %erify and post an incoming excise invoice
B/IA 3 !reate an incoming excise invoice )without reference to purchase order*
B0IK 3 Transfer excise duty to !(4%#T account
B0I8 3 Demit excise duty fortnightly
B0IL 3 $onthly !(4%#T return
B/IG 3 (xcise invoice entry at depot
B/IG# 3 !reate additional excise entry at depot
B0I< 3 (xtract data for excise registers
B0IC 3 "rint excise registers
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