How is tax set in MM purchasing?

can anyone please explain how tax is set in MM purchasing?

Hi
Tax code is created in T.code FTXP, Under the country key.
Tax code is assigned in the PO in the PO Line item in the Invoice tab.
More details in link provided
http://help.sap.com/saphelp_47x200/helpdata/en/4c/e13438b55ced0ce10000009b38f8cf/frameset.htm
http://help.sap.com/saphelp_47x200/helpdata/en/e5/077d5c4acd11d182b90000e829fbfe/frameset.htm
Award points if useful
Thanks & Regards
Kishore

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Dear Guru,
1. How to make tax code for purchase of Raw materials with basic excise duty=14%, SECess=2%, HSEcess=1% and Additional Excise duty=4% as follows . If we consider basic prise=100 then
BASIC                  =100
BED    (14%)        =14
SED     (2%)        =0.28----
Sed=secondary Educational Cess
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SUB TOTAL        = 114.42
AED (4%)           =4.56
TOTAL             = 119
For above all taxces(BED,SED,HSEcess,AED) , client gets 100% set off.
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2.Do we need to assign (tax code) them to any business area, as my system is giving an error at the time of saving in MIRO.
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Tax Set Off depends on the Account Key which you are using. Account Key in Tax Procedure will be defined by finance at SPRO - Financial Accounting - Financial Accounting Global Settings - Tax on Sales / Purchases -   Basic Settings - Check and Change settings for Tax Processing.
Check the relevant condition type in the Tax Procedure (TAXINJ / TAXINN), and then check the account key of the procedure whether the Non Deductable indicator is set or not. you may take finance help for the same. Once it is done correctly then define the excise defaults for the relevant tax procedure at SPRO - Logistics General - Tax on Goods Movement - India - Basic Settings - Determination of Excise duty - Maintain Excise defaults
Then create the tax code with the relevant condition types.
You need to assign the Tax code to Company code if you use TAXINN procedure. No need for assignment of Tax code to Business Area
Once you select the Check Box Calculate taxes in MIRO, then system calculates the Taxes based on the tax codes defined and also validates whether Part II Postings have been done or not also for the Excise relevant transactions
Regards,
Ramakrishna

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