Use Tax for Free of charge items

Here is the scenario:
In our Business, there is a process to give a Free item with mostly all the products sold online. In SAP, we will create regular sales order with 1 line item as TAN and other item category as TANN.
The Business wants to calculate Use tax on the 2nd line item where Net value=0. As we use the same Pricing procedure, we cannot charge different taxes based on line item.
The other option was to send the cost details to Vertex, so that they can store it in Vertex and use for Tax calculations. The technical issue is that whenever the Net value=0, Vertex RFC is not called.
We have proposed to create a report in SAP which will tell them the order details with Free items but this is not acceptable to Business.
Has anyone worked on such scenario where Use tax is calculated on the Sales side for Free of charge items.

The basic concept in tax is seller can levy the appropriate tax on the items which they are billing.  This being the case, I am not sure, why for a free of charge item, tax should be levied.  Can you please share in which Business process, this is being followed.  Needless to mention, if at all you want to achieve this requirement, have a separate condition type for this free goods, set as statistical, so that, only tax portion would be posted to FI.
G. Lakshmipathi

Similar Messages

  • Cost center valorization for free of charge item

    During sales order entry I need to have some
    - standard item that have to be invoiced to the customer
    - free of charge items; these items have not to be invoiced and for them I need to value a specific cost center ( for the standard price stored in material master data).
    I know there is a customizig setting I can use to manage the relationship between the order reason and the cost center but this value is valid at header level (VBAK-KOSTL) while I don't know how I can set different cost center at item level (VBAP-KOSTL).
    Thank you in advance,
    Alessandro

    Hi,
    in NewGL I am sure that its not possible as there is no accounting document created (which contains the PRCTR information as well) if the revenue is zero.
    And I am pretty sure that its not possible too in old PCA (Ledger 8A).
    CO-PA docs. can be created for free of charge items (otherwise the cost of these items are missing in costing-based CO-PA).
    BR Christian

  • Profit center line for free of charge items

    Hi all
    Is it possible to force SAP to write the create a profit center items for free of charge items of SD invoice (positions TANN), of course with zero value but with the quantity data?
    Thanks.
    Davide

    Hi,
    in NewGL I am sure that its not possible as there is no accounting document created (which contains the PRCTR information as well) if the revenue is zero.
    And I am pretty sure that its not possible too in old PCA (Ledger 8A).
    CO-PA docs. can be created for free of charge items (otherwise the cost of these items are missing in costing-based CO-PA).
    BR Christian

  • Excise and sales tax for Free of charge delivery

    Friends,
    Kindly explain somebody whether Duty and taxes are leived during free of charge delivery. If it is levied then what is basis for calculating duty?
    Plesse help on this.
    Thanks in advance

    Hi Pratap,
    For free goods you have to pay excise duty, that is why i recommend you to follow a new pricing procedure, where the Price Condition type is statistical(to calculate excise) and give payer as self if the excise duty you would  not get from customer,\
    1.Create invoice and excise invoice.
    2. If you don't want to to hit self(given in document header partner) create proforma and excise invoice
    revert if you require any clarrification.
    regards.

  • Item categories for Free of charge items

    Hi Gururs,
    In the standard SAP the Item categories AFNN,AGNN and TANN are defined. Can the free goods be determined in Inquiry and Quotation(in any sales document with document category other than C-i.e.Order). If not possible, then what is the purpose of defining AFNN and AGNN.
    Thanks in advance
    Ravi

    Hi Sankar,
    I can confirm that a free goods determination cannot be enabled for any sales document category other than C. In some of the OSS notes, it is clearly stated that free goods is meant only for sales document category C.
    However the purpose of AGNN, and AFNN are not known. When i checked the configuration, these 2 ICs have configuration which are different from TANN in some of the aspects, especially the pricing field, that itself says that AGNN and AFNN are not meant for Free goods.
    However, I will confirm on the purpose of these ICs in sometime, as I am exploring that.
    YOU CAN READ THE OSS NOTE 549505 ON FREE GOODS, WHICH CONFIRMS THIS. IF YOU WANT THE NOTES, LEMME KNOW UR EMAIL ID.
    Reward if this helps.
    Content added by Navaneetha

  • Free of charge item tax calculation

    Hi all
    I have a requirement for VAT calculation for free of charge item in sales order.
    For these items (item category TANN) with VPRS for internal price condition and MWST for VAT tax condition i'm able to calculate the value for VAT accounts purpose.
    Is there any exit that enables me to create this? Will it be in SD invoice registry?
    thanks in advance

    Hi
    If you are asking whether the congiguration is possible it is certainly possible in standards itself with alignment of condition types
    Normally we will place condition type MWST after R100
    In this case MWST should be placed before R100
    It is the same as suggested by Mr. Murali but the important thing which he missed out is After placing R 100 after MWST you have to Fill up FROM and TO for condition type R100 excluding the step nos of MWST
    Suppose PR00 is step 10
    Then it should be MWST Step 20
    Then R 100 step 30  For this R100 you should fill up from and to as 10 and 10
    Now when a material is Rs100 and 10 + 1 free is there and if the order is for 10 units and if the tax ix 4 %
    then the nett value will be Rs 1000(10x100)
    tax value will be Rs 44 (tax is calculated for 11 units at 4%)
    Regards
    Raja

  • Free of charge item processing - France business requirement

    Hi,
    For free of charge sales, the net value of an item is made to zero using free item category in the sales order and the billing with zero value is released to accounting.
    One of the requirements for France is for Free of charge items, though the value of the product is zero, the relevant tax codes needs to be transmitted from SD to FI so that the tax value(zero) + tax code details will be available in the VAT reporting.
    It looks the OSS notes 34526 - Delivery free of charge and value-added tax provides recommendation to resolve the above requirements. Have anyone implemented the solution based on this OSS note or used any other approach? The condition type Z002 provided as example in the note, reducing value of the net value instead of negating tax value.
    Appreciate any feedback on this.
    Regards,

    Thanks for responding. Below are my responses,
    How ( with which tables and fields ) you are developing VAT report in FI?.Why I am asking is,with tax code only we can track the tax amount in FI level.If the tax code related data is zero then how and what based on can we get that data in FI level to develop a report?.
    I consulted the same with FI colleagues and per their response, an entry has to be made in the BSET table in order for the VAT report to populate the relevant tax code and values. As mentioned in the caption of the thread, it is for our French business requirement. Our business users indicated that when a product is sent as delivery free of charge, they wanted to show the details in VAT reporting (I am not an VAT expert, and not an expert with French laws). We have added tax codes for relevant taxes, including zero tax and followed the recommendation provided in the OSS note that I have mentioned earlier.
    Why dont you want to develop a VAT report in SD module ?.Do you have any issues over there ( in SD ) ?
    Our requirement is NOT to develop the VAT from SD module, however FI folks asked to pass the tax code/tax value from SD transactions (billing document to FI). Hence I raised this thread in SD area to see whether anyone has accomplished a solution for this similar requirements.
    Thanks,

  • What is free of charge item?

    Hi Experts,
    I Yogita. Please tell me about free of charge item application in sales order.
    Facing one issue related to free of charge item, in that customer want to see cost, for free of charge items in sales order. In sales order the values is 0(zero). Please guide me.
    thanks & regards
    Yogita Patle

    Hi
    The items sold without charging  the customers are free of charge items  or free goods, normally this scenario is used
    in sales promotions, please check the following link which can be of help
    http://wiki.sdn.sap.com/wiki/display/ERPLO/FreeGoodsDetermination
    Regards
    Chandrasekhar

  • Free of charge items

    hello all,,
    what would be an ideal way to handle free of charge items which are samples, since we give out a lot we need to have a proper way other than just convertiving them to TANN, while the sales order entry, so that we have proper reporting on that.

    Hi
    So the ideal way for free of charge items where samples are given is maintain Z item category.and assign in VOV4.So that for free of charge items only you can use Z item category and coming to reporting you have to go for LIS and create a user defined report with the combination of tables & feilds. Then whenever you want to see the data you can see the data
    Regards
    Srinath

  • Free of charge Item determination in SO with cost and revenue transfer

    Hi,
    Please guide me on the followings.
    I have a following requirement for determining the free goods in the sales order .We have two plants
    1.     Plant 1 is for valuated materials
    2.     Plant 2 is for Free of charge Items
    Free of charge items which are given to the customers are supplied by the vendors and stored in the plant meant for the Free of charges items. But sometimes when free of charge items are not available in the stock then user take FOC item from the plant which is meant for the valuated materials and send it to the customers as a free of charge item.
    User wants to transfer the cost of the FOC item to the main item when FOC material is taken from the valuated plant and sent to the customer.
    Similarly  when there is no stock of material in the valuated plant then user take the same material from the Plant2(Non-valuated) and send the material to the customer. In this case user wants to have the revenue posted in the respective  G/L  Account.
    But it should also appear as a free of charge items in the billing document.
    Regards
    Rahul

    hi,
    transfer of cost from sub item to main item is configured in the delivery to billing copy control for the main item. go to VTFL  > select the required item cateogry > here at the bottom you will find a check box Cummulate cost. Tick it.
    Not really what you meant COPA purposes. But the pricing conditions are mapped to COPA value fields at KE4I transaction.
    regards
    sadhu kishore

  • Delivery free of charge item control

    Hi all
    Where i can set the control "B"  for free of charge items for avoid they are copied in delivery without their parent item?
    Thanks
    Davide

    Hi,
    Go to Item Category Definition (T-Code : VOV7) and assign B to the Pricing field. This particular item category will now be treated as a free goods item.
    Coming to your other question: Free goods should be dispatched only with the main item.
    I don't think system has any such restriction for exclusive free goods. In case you have inclusive free goods, you can have the free goods without item generation in that case you will have the material dispatched with the main item.
    Thanks n Regards,
    DP

  • Transfer cost price from free of charge item to main item but not for VPRS

    Hi,
    I want to transfer cost price from free of charge item to main item but not for VPRS but for a new Z contidion type.
    For CO-PA proposes. Can you help me with This?
    Catarina Alves

    hi,
    transfer of cost from sub item to main item is configured in the delivery to billing copy control for the main item. go to VTFL  > select the required item cateogry > here at the bottom you will find a check box Cummulate cost. Tick it.
    Not really what you meant COPA purposes. But the pricing conditions are mapped to COPA value fields at KE4I transaction.
    regards
    sadhu kishore

  • Calculation of sales tax for free item

    Dear SAP B1 Experts
    I have query regarding sales tax calculation for free item .
    For EG.  I have two item for sales (A = 1000,  B = 100)   Sales tax is VAT4%
    But when i am doing sales, i am selling B for free of cost with A for Rs 1000/- 
    here my tax calculation is (1000 *4%)  = 1040/-
    but as per the govt sales tax rule, we are liable to pay the tax for free item as well
    So I this case, In SAP B1 how we will calculate the tax 4% for free item  .
    Please help me.
    Thanks

    i have checked, its working okay, but
    in Invoice print out unit price and line total is showing for free item.  How i make the unite price 0 .
    Tax only calculation is based on the Line total and the line total is based on the unit price.
    in that case when i give the invoice to the customer.
    It should show like this
    Item A       100   * 10         1000
      "    B           0   * 1              00
                                             1000
    4% tax                               44
    Doc Total             =           1044
    thanks
    Regards

  • Change GL account third party for Free of Charge material

    Hi All,
    Can you please help me with the following flow:
    We have a SD order with Free of Charge item.
    It is third party processing: vendor send directly to customer without
    posting GR in our company.
    The COS is posted to a wrong G/L account. How can I change the G/L account, but only when a FOC item is processed?
    Thank you,
    Eric.

    Hi Eric,
    Although I do not have much details about your business process requirement, I think you can try creating a new Movement type for such spl cases, create a new Transaction/Event key and assign it to this Mvt. type. If the FOC Materials are few, then you can also think of creating a separate Valuation Class for such materials and use this Valuation Class in OBYC.
    With these settings when you use the new Mvt. type your desired GL accounts will be posted. Check before finalising your action plan.
    Please let me know if you have any problems.
    Hope this helps.
    Cheers
    Keshav

  • Free of charge items in billing document

    Hello!
    I need to include free of charge item RENN (return order) into billing document. I am to use such  item in output document.
    But when I create billing doc from order or from delivery I recive messagelike that - "3610000010 900003 Item category ZLR ZRNN cannot be invoiced with billing type ZRE" (ZRL is copy from LR. ZRNN is copy from RENN)
    Is it error in customizing or system limitation?
    Andrey Garshin.

    Hi Andrey,
    This is an issue with the copy control. Kindly check the settings in copy control VTFL.
    Check for delivery to billing type ZRE if the mention item categories are maintained.
    You need to include the missing item category there.

Maybe you are looking for