Pricing Procedure vs Tax Procedure

Dear all,
The scenario is as follows
My company purchase material from a trading company which imports the materials from other countries.
In PO we have maintained import pricing procedure so that we can take the duties paid by trading company during import.
We pay duties to the trading company.
Taxes are also involved in this.
I have created a pricing procedure for this seperate where there is a line with 'condition value' = total of
[ Net price of materialCustoms dutyCVD+ECS on CVD + SEC ECS on CVD + AED]
Now we all know tax should be calculated on this total amount.
In normal case the Net price will come as the base price for tax calculation which is here wrong.
I want this total amount to be the base amount for tax calculation in tax procedure.
What i need to assign in the pricing procedure against this 'total' so that it is taken as base amount for tax calculation
How to do this?
sapmmlearner

Hello,
As per your said scenario:
My company purchase material from a trading company which imports the materials from other countries.
In PO we have maintained import pricing procedure so that we can take the duties paid by trading company during import.
We pay duties to the trading company.
Taxes are also involved in this.
I have created a pricing procedure for this seperate where there is a line with 'condition value' = total of
Net price of materialCustoms dutyCVD+ECS on CVD + SEC ECS on CVD + AED
Now we all know tax should be calculated on this total amount.
In normal case the Net price will come as the base price for tax calculation which is here wrong.
I want this total amount to be the base amount for tax calculation in tax procedure.
What i need to assign in the pricing procedure against this 'total' so that it is taken as base amount for tax calculation
My question is if your company and your vendor /supplier (Is a trading company from where you are procuring the materials) are geographically located at the same place (such is within country in same place or within country at different places, etc)
means, then you should not worry about the Import duty. Because for you, when you procure the goods it should be treated as Inland/Domestic procurement (by the by your vendor, who is trading company procures materials from Abroad, that is his risk or his duty to pay the Customs duty or Importation clearing charges, etc since he is procuring from outside the country through Import procurement process, so don't worry for that).
Hence when you order the material through standard PO to your vendor (that is trading company), then Logically it must be Domestic pricing procedure (there is no involvement of import duties, importation, etc), that means system will pickup the Pricing procedure - Domestic - which consists of Gross price, and all other suitable pricing elements which are in currently used in your company (for the vendor) and part from the tax condition elements such as Basic excise duty (BED), SED, AED, Cess, etc... these are not part of the Pricing proceudre, but relevent to the Tax procedure. So which can be arranged in a sequential order for the Tax procedure - TAXINN - which is currently in use from any industry - for calculating the tax amount for the item that you procure from the supplier or vendor. And thats how you (your company) will pay the Duty or tax amount agains the goods that are procured from external source.
Please note: the tax caluclation is always based on the Base amount, not on anything else, that is based on the total ordered amount through the PO. And the tax amount is always interm calculated by adopting the suitable tax code in the PO (in item details), provided you have to maintain all these tax condition elements in a Condition records through FV11 t.code. then once the tax code (i.e., Input tax - which is tax on purchases) is adopted for the PO, system will pick all the valid condition records and sum the total tax amount in the PO.
Maintainaing of condition records is required, because the tax procedure which is a Condition based tax calculation procedure. hence you have to maintian the condition records as you said. Then it will calculate correctly.
Hope it clarifies,
Regards,
Sapsrin

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Pricing procedure and Tax Procedure.

Hi,
Can any body suggest, how to bring tax values in Condition, in Pricing procedure of MM. Now as per my settings Tax is coming under tax head and MM pricing prodcedure is coming separately, I need ,
Thanks & Regards
Sudhansu

Hi,
Did all you taxes in tax procedure in %!
No access sequence required for your requirement. Create a condition type as ZTFT & maintain
Cond. Class: D
Calculat.type: B
Cond.category: N
Keep BLANK access sequence filed & make it as item condition and then add this condition type in pricing procedure with logic just before calculation of TOTAL price.
Now do create PO with all taxes and now you can see all tax amounts in condition type ZTFT in PO Condition TAB( which flow from tax procedure to MM pricing procedure with a condition type ZTFT)
Regards,
Biju K

MM Pricing procedure VS Tax procedure

Hi Gurus,
I have checked many thread here , but still can not find the answer.
Tax calculation procedure basically calculate the tax amount based on condition recaord maintained
(dor tis corresponding Condition type).
But we also can maintain Condition record for the condition type NAVS (pricing procedure) that bring tax amout into the pricing procedure of PO).
My question is why do we have to maintain Tax procedure as well as pricing procedure (regarding tax of course ).
Cheers Guys
Julien

HI
Basically why we have taxing procedure is that its always country specific that means it can be any vendor selling any material but he has to follow some government regualations whcih is what will be given in the taxing procedure that sholuld be the same for all customers it will be different if the customer is foreign.
the pricing procedure is where we carry out pricing that is customer specific here we can have different prices for different customers depending on what he buys and ETC.
hope this clarifies .
Regards
Vignesh

MM pricing Tax procedure

Dear All,
There is no tax on purchase. Whatever tax mentioned in the invoice are capitalized/booked under expenses. Should i use FI Tax procedure for it. The illustrative pricing is as follows:
Please suggest an approach for it
Price of item          1000
Sub Total          1000
P & F @2 %          20
Sub Total          1020
Excise Duty @8%          81.6
E Cess@2%          1.63
HE Cess @1%          0.82
Sub Total          1104.05
VAT/Sales Tax /CST as applicable (Say 12.50%)          138.01
Surcharge on VAT @5%          6.90
Sub-Total          1248.95
Freight          Nil
Octroi          Nil
Insurance          Nil
Sub-Total          1248.95
Discount if any          Nil
Total          1248.95

Hi,
MM Pricing Procedure and Tax Procedure are entirely different concepts. In your example you have mentioned about excise duty, education cess and higher education cess, VAT etc. is nothing but tax. Material price, packaging and forwarding charges and discount are nothing but pricing conditions.
MM Pricing Procedure
The Basic thing is Condition Technique. In which there are
1. Access Sequence (M/07) 2. Condition Record (MEK1) 3. Condition Type (M/06) 4. Condition Table.
Tax Procedure
1. Access Sequence (OBQ2) 2. Condition Types (OBQ1) 3. Procedure (OBQ3) 4. Condition Records (FV11)
- Saleel

Link of Pricing and Tax Procedure

Dear Sir,
I want to pick value (summation of some condition type) from pricing procedure to tax procedure.
As like the value of basic price come automatically to tax as base amount..... in the same way i want that sum of some condition type will automatically to tax.
If anybody have idea about this......Is it possible or not.....
Please help..

Hello,
Basic price come automatically to tax as base amount. because there is a Routine no 362 was maintained in the tax procedure in front of the condition BASB.
Like wise if you want to want that sum of some condition type will automatically to tax. then you have to add such routines in tax procedure at different steps with the help of Abaper.
Thanks,
Vinay

Link between OB40 and tax procedure.

Hi Experts,
In OB40 GL code is maintained for different transaction like NAV,MWS etc.Could not get how it is link with OBCN & tax procedure.In tax procedure we maintain different condition type.For example in tax procedure for condition type MWZI account key is NVV but in OB40 could not see this transaction key NVV.
Thanks & Regards
Atharva G.

Hi,
   The tax account keys are maintained in OBCN transaction.
    In OBCN, NVV account key is maintained with posting indicator as 3 (Distribute to relevant expense/revenue items) which doesnt require any GL account maintenance. Because of this reason, the account key is not displayed in OB40.
    If you maintain the posting indicator as 2 (Separate line item), then it requires GL and then the account key will be visible in OB40. You may check the case.
    The tax procedure is linked to country in OBBG.
    Hope you understood the logic. Revert back if you need further clarification.
Regards,
AKPT

Relation between Tax procedure and Pricing procedure

Dear All,
I would like to get more clarity on Tax procedure, Pricing procedure.
a) Why do we have Tax procedure and assigned to Country?
b) If the tax procedure has been created and assigned to Country-IN (in FI module), then why do we need to create pricing procedure with same condition type for purchasing in MM module? We are even creating lot of pricing procedure for Sales in SD module.
Regards
Manivannan R

Hi
Tax
During SD document transactions, tax calculation procedure TAXUSX is only relevant to determine the tax liability accounts for output sales tax. Notice that in pricing procedure RVAXUS, the condition types XR1 - XR6 carry the tax rates and tax amounts - resulted from the external tax system calculation - which is posted to tax G/L accounts. However, the tax accounts are not specified in the pricing procedure but rather in the tax calculation procedure.
Tax codes are the link between pricing procedure and tax calculation procedure.
Pricing
The primary job of a pricing procedure is to define a group of condition types in a particular sequence. The pricing procedure also determines:
Which sub-totals appear during pricing
To what extent pricing can be processed manually
Which method the system uses to calculate percentage discounts and surcharges
Which requirements for a particular condition type must be fulfilled before the system takes the condition into account
Example
Example of a Pricing Procedure
If a sales department processes sales orders for a variety of foreign customers, the department can group the customers by country or region. A pricing procedure can then be defined for each group of customers. Each procedure can include condition types that determine, for example, country-specific taxes. In sales order processing, you can specify pricing procedures for specific customers and for sales document types. The system automatically determines which procedure to use.
Pricing Procedures in the R/3 System
The standard system contains pre-defined pricing procedures, which contain frequently used condition types along with their corresponding access sequences. You can, of course, modify these procedures or create your own from scratch.
Creating and Maintaining Pricing Procedures
You create or maintain pricing procedures in Customizing for Sales. For more information on creating pricing procedures, see the online Implementation Guide for Sales and Distribution.
To reach the pricing procedure screen from SD Customizing:
1. Choose Basic Functions
2. ® Pricing ® Pricing control ® Define and assign pricing procedures.Select the transaction that you want to execute.

VAT/Excise calculation - map pricing & tax procedures

Dear,
Pls tell me how to map my blw senerio;
In pricing procedure, i have
A- Gross price
B- Handlying charges
C- Excise on A+B,
here i need to calculate my exise on A+B values and it flows (C) frm tax procedure (taxinn). until here i'm ok.
D - A BC
E - Insurance (defined in pricing proce) on D value,
here i'm unbale to map my price, since the sytem taking A+ B price only, its not taking my D values... I need to map pricing & tax procedures, since Gross price, Han. charges and insurance flows frm pricing proce and Excise frm tax procedure.
Anyone has right solution, pls guide me...

Hello sapjj
Here in your issue, u have to maintain a dummy condition type for excise calculation in your pricing procedure. The excise on A+B will be calculated in pricing procedure itself and not it flows from tax procedure.You have to make a condition type in pricing procedure and mark it as statistical in the procedure so that it doesn't get added to material value.
you are ok till gross price and handling charges, right?
Then you include your dummy condition type for excise amount calculation.Then in the next step calculate a subtotal without giving any condition type and maintaining 'S' in the subtotal field in the pricing procedure.
In the next step include the insurance condition type and calculate it on the subtotal.
This will help
Regards
Gregory Mathews

How to copy Value of fright from pricing procedure to the tax procedure

Dear All,
Please note, I have a condition type in Pricing procedure i.e. ZRCO-this is for fright which will be added by the user in the PO.
I want to copy the same value to ZRC1 which is a condition type in tax procedure.
Kindly advise, is there any way we can do this automaticaly. My requirement is to add the fright to the gross price while caluclating the VAT in tax procedure.
Rgds,
Raghavendra N N

Hi,
There is a Field for Manual entries in configutration for Conditions : Condition Types.
Manual Entries Indicator which controls the priority within a condition type between a condition entered manually and a condition automatically determined by the system.
Make the following entries according to your requirements:
_: No limitations
A: Freely definable
B: The automatic entry has priority. If a condition record exists, the condition cannot be entered manually.
C: The manual entry has priority. When you enter the condition manually, the system does not check whether a condition record exists.
D: Cannot be processed manually
Hope this will help.

Questions about CIN tax procedure choice and pricing schemas

Hi all,
I have to implement SAP on a Indian company and I'm verifying all particularity about this country (in particular tax procedures and the great number of differents tax conditions used).
I have two questions about tax procedures and pricing schemas. Every feedback about thse points will be appreciated.
a) To choose tax procedure TAXINN or TAXINJ which are the elements that I have to consider?
I have read lot of documentation about CIN implementation and Iu2019m oriented to choose TAXINN schema, but If possible I would to understand better which are on behalf of one choice or another.
b) To define pricing schemas for India, after check with local users and using examples of documents (in particular tax invoice) actually produced, I have understood that taxes have to be applied on amount defined starting from price list, minus discounts recognized to customer plus surcharges eventually to bill (packing, transport, etc.).
Itu2019s correct for any type of taxes that tax amount is calculated on u201Cnet valueu201D defined at item level or there are exceptions to this rule?
Thanks in advance
Gianpaolo

hi,
this is to inform you that,
a) About point 1 I know the difference between the 2 tax procedures (conditions or formulas). I also have read in others post in the FORUM that TAXINN is preferable. So I would to understand which are the advantages to choose instead TAXINJ. There are particular reasons or it'a only an alternative customizing setting?
a.a. for give for posting the link : plese give me the advantages of TAXINJ and TAXINN
CIN - TAXINN and TAXINJ
b) About point 2, to define which value has to be used as base amount to calculate taxes isn't a choice, but is defined depending by fiscal requirement of the country, in this case India fiscal requirement. I know that, as Lakshmipathi
write as answer on my question, exception could be, but it was important for me to understand if I have understood correctly the sequence of the pricing condition in the schema in "normal" situation.
b.b. you can create your own pricing procedure for this and go ahead.
hope this clears your issue.
balajia

Tax Procedures and MM pricing procedures

Currently when creating a PO under the invoice tab you can input the Tax code and jurisdiction code.
The tax code I am using is set up for a Canadian Tax procedure (TAXCAJ).
The procedure is calling two tax condition types JC1E (GST) and JC1I (PST). They are both condition class D and they are the same accross other statistics but they differ in condition category. JC1E is condition category 1 and JC1I is condition category 2.
JCIE uses account determination VST while JC1I uses NVV. JC1E needs to be posted to a seperate account as it is partially recoverable.
The real underlying issue here is that tax condition type JC1I comes accross to teh MM condition tab under NAVS but JC1E does not. I need the value from JC1E to come over to the conditions tab as my PO print is driven by this.
Any ideas how to get tax condition type JC1E (or its value) over to the conditions tab. I can make JC1E come over with JC1I but i need JC1E seperate. If you need clarification or more information just let me know.

Hi,
NAVS condition collects the non-deductible portion of the Tax Code and hence only showing JC1I which is a non-deductible condition type. The logic behind this is non-deductible tax is part of cost, so for updating the stock account at the time of GR with base value + discounts and other pricing conditions + non-deductible tax, NAVS condition type is being used in PO pricing procedure. JC1E is a deductible type tax and as not being a part of cost it is not updated in NAVS and hence the stock account at the time of GR.
If you want all the tax amounts for PO printing purpose, use JEXS condition type and insert this at the last of the pricing procedure with statistical indicator. Modify your print program to print value against JEXS instead of NAVS.
regards,
mallik

Query for MM Pricing Procedure & tax Procedure

Hello,
Can someone advice me on following.
I need one Condition in MM Pricing Procedure : Discount should be reduced after Calculation of Excise duty and Taxes on PO.
Discount should not be calculated for Excise Base amont & or Tax (CST /VAT) base amount.
Calculation
Basic :          100
Freight            20
Subtotal        120 (Excise Base)
Excise duty:   30
Subtotal:       150 ( Tax Base)
Tax   @4%       6
Subtotal        156
Discount         10
Total Price     146
My Requirement is how to add Discount at the Place shown above.
Regards,
Manish

Dear Manish,
                    After subtotal 120 put in subtotal column 7 and after subtotal 156 put 1.
Truly, I was bit surprised to see your first post, now I got the reason what kept you held.
I tell you why this happens.
I believe you are using tax procedure TAXINN. The routine 362 (in tax procedure) has the program which fetches the data from your pricing procedure and on what amount the taxes have to calculated is the value passed into BASB condition type of tax procedure. One should always read the routine 362 in tax procedure with the help of ABAP consultant. This will give you clarity on the concept of calculation. the subtotal field i.e is KZWI plays important role in calculation.
Currently I do not have access to any test system. If you put the subtotal what I have mentioned the result will come.
Another layman tip I am giving you for tax procedure calculation. where ever you are calculating subtotal just give value from 1 to 7 in subtotal column with different combination one by one and see the results, you will have good idea how the system behaves. Say if you put subtotal as 1, the system response will be different from if you give subtotal 4.
Why this is important to understand is when in future if you are going to add any new condition type you will know how the system response is towards the tax calculation.
That is why I suggested you to read the routine 362.
Moreover, if I see your procedure, excise duty, CST and LST should not be calculated on freight charges. Legally this is not correct. Freight charges are in the preview of service tax. In many implementations I came across the similar scenario where the client insisted on the similar procedure. This all happens due to ignorance of client. We have shown the client the official documents as well we also arranged the official meetings with excise commissioners to clear there doubt.
This scenario is usually insisted in the case of freight billed what client says. this is not correct.
Regards
Rajesh

Help needed-Regarding pricing procedure and tax inn configuration

Hello Friends
I have a new scenario in sap mm-
i have to do teh customizing in 2 days please guide me up.
my company SAY :A is in india imports material from parent company B in america.
This A company some times gets material from local vendors in mumbai. where VAT and CST comes into place.
we are using use tax INN configuration for this.
ther are Customs duty, there is no excise duty as everything is just imported., edu cess, CVD,and freight charges etc.
can you please decribe me in detail the pricing procedure required for my company A which is in india.
and the customization of TAXINN.
any information will be really helpfulbecause i am struck on creating condition types.
Help me SAP GURUS>>Please..u wil be my life saver..

Hi Aravind,
For domestic purchase Vat & CST are applicable. If it is intra state VAT is used & if it is interstate CST is used. These condition types have to be manitained in the TAX procedure.
JVRD - I/P VAT
JVCS- I/P CST.
we have maintained condition records for both these condition types along with the tax code in FV11. In the case of import purchase, you need to maintain seperate pricing procedure for import which will include ,
JCDB - BASIC CUSTOMS DUTY
JCV1-CVD
JECV-EDU CESS
J1CV- SEC EDU CESS
JEDB- IMPORT CESS
JADC- ADDITIONAL CUSTOM DUTY.
All these conditions will be available in PO item level & you need to maintain % for these conditions. Hope it helps.

Link b/w Pricing Procedure & Tax procedure.

Hi all,
What is the link between Pricing Procedure & Tax Proceduere. In Tax Procedure how the Base ammount is picked from Pricing Procedure.

Hi,
Tax codes are the link between Pricing procedure & Tax procedure.
While creating Tax code (T-code FV11) we use condition types for VAT, BED, AED and others. Against these condition types we maintain percentage of taxes / duties.
THese tax codes are used in PO at invoice tab.
regards,
Anand

How is pricing procedure in MM linked with tax procedure ?

how do we link a pricing procedure with a tax procedure for a particular vendor material combination?
eg RM0000 is applied to standard order which contains condition type eg gross price PBXX and tax procedure applicable is Taxinn which contains condition type BASB ...now how is BASB value determined for further tax calculations???

Hi,
Whlie createing the tax condition in M/06 you have to check the Condition category It should be D and then the link is mentioning the 352 as calculation type against BASB condition type in tax procedure.
Warm regards,

Pricing Procedure vs Tax Procedure

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