Tax in Free Goods Pricing

Dear Gurus,
Need ur help to resolve the problem i'm facing in my Free Goods Pricing.
I have used r100 condition type before the tax calculation with 55 and 28. I'm able to bring the net value to 0 but the tax is still calculated and the same is posted to the customers account. As the deal is free of charge the customer is just issued the goods and is not entitled to pay a single penny.
My Pricing
PR00
Freight
BP+Frgt
Excise
BPFrgtExcise
r100
Net Price
VAT
Net Price
Awaiting your recommendations
Rgds
Suresh

i'm calculating the exicse in my procedure. In the SO the net value is shown as 0 but the tax is calculated. In the accounting document following are the entries...
Posting Key   Description                       Value
01     Customer                          701.76
50     Revenue                    5,000.00-
50     Freight Recovery     230.00-
50     BED recovered sales     600.00-
50     ECes recovered sales     12.00-
50     SHECerecovered sales     6.00-
40     Deduction                5,848.00
50     AR VAT Payable - And     701.76-
What i require is that the customer payables should be Zero and that amount needs to the added to the total deduction amount.
Awaiting your valuable suggestions
Rgds
Suresh

Similar Messages

Free goods pricing procedure

Hi,
I need to configure the free gods functionality and I look for clarification from those who have configured it . My questions are.
1) how does the system determines while creating sales order that free goods are involved.
2) for main item, if the item category is TAN, then for exclusive free goods the item category will be TANN ? Is the following combination ok for free goods item category detemination ?
OR + NORM+TAN(higher level) +FREE(usage)=TANN......where TAN is the item cateogry of main item
3) How is the free goods pricing procedure works. ?? I mean do we have to define the basic price condition PR00 in the free goods pricing procedure so that the system applies the basic price to the main item ? for example if the main billable qty is 10, and per unit price is 100, then the basic price will be 10*100=1000 for the main billable items in the free goods pricing procedure.
now if free goods are 2 (exclusive), then the system shows in the pricing line item a basic price of 2100=200 and then a condition R100 is shown as a negative amount of 2100= -200 so that net value is zero ??
4) I think when the material is entered, then the system reads the free goods master record and then determines the main item category for billable item and then free item category is determined and then pricing is carried out
pls validate my above points ?
regds

Hi
Yes, there will be only one pricing procedure for free goods and normal goods.
Free goods procedure is to determine the free goods condition records (maintained through VBN1) and now way related to pricing.
Pricing procedure is to determine the price for each line item based on the conditon records (maintained through VK11).
As an example- there is free goods conditon record for a material as 10 + 2 exclusive and hence for an order quantity of 10 you can see a second line item for a quantity of 2 as a sub item with item category as TANN.
The pricing happens the same way for both the line items and you can check that in the conditions tab of each line item.
While carrying out the pricing, system goes to the first conditon type in the pricing procedure and if it satisfies the requirement then accesses the conditon records and picks if there is any valid conditon record. Like wise, it checks all the condition types in the pricing procedure. In this process it also checks the conditon type R100 and the requirement will not be satisfied for the first line item and hence will not determine any value. In the case of the sub item with TANN item category, the condition records will be determined as happened for the first line item and also the R100 will be determined. Because, the reqirement for R100 says, the pricing details(in VOV7) for the corresponding item category(which is TANN) should be B-Pricing for free goods(100% discount). TANN satisfies this conditon and it determines the total amount here, making the net value as zero. If there are any values below the R100 condition type in the pricing procedure, then the net value will not be zero. Hence positioning of the R100 condition type has importance in designing the pricing procedure. If you change the value for TANN in VOV7 from B to X, then R100 will not be determined even though the free goods are determined in the sales order as sub items. The pricing happens the same way to both main item and sub item (free goods).
Regards,
Ravi

Free Goods Pricing Problem

In our pricing procedure we have R100 and NRAB condition types.In sales order we are giving free goods(Exclusive).Now in condition tab for the free goods line item the value is showing as followes
PR00- Rs 150
R100- Rs 150(-)
Net Value - 0
CST- 4.50
Net Value with Tax 4.50
Rounding Off   4.50(-)
Total value - 0
So for this line item Net Value is coming Rs 4.50(-) and Tax is Rs 4.50.
In header this value is adding or subtracting from the value of main line item and showing the final value.
So how can i make the net value and tax 0 for the free goods item, so that it will not affect the total value of the document.
Regards
Jyoti

Hi Jyoti,
In this scenario you can use below pricing procedure.
Step 10- PR00.......................................................................100 Rs
Step 20 Gross Price..............................................................100 Rs
Step 30 CST (calculate on Step 20) From 20 to 20....................   8 Rs
Step 40 Net Value( From 10 to 39)...........................................108 Rs
Step 50- R100 (From 40 to 40)..................................................-(108) Rs
Step 60 NRAB........................................................................
Step 70 DIFF..........................................................................
Total       .................................................................................   0 Rs.
I hope it will help. Please check and confirm
Thanks,
Raja

Tax on Free Goods (help required)

the problem i m facing is this i configured a princing procedure and in process there is also a process of free good i used nrab and r100 but its not excluding the sales tax and its charged to customer
i changed the procedure now the customer is charged with accurat problem but the probelm is that the the Tax is effecting the net value field as well (VBAK-NETWR) and its going to effect the standard reports any solution that the tax value also become 0 . coz the company bear the taxes for the free goods

Hello Abaper,
In your pricing proceedure remove the MWST condition type.
This should solve your problem,
Reward if helpful.
Thanks
Murtuza

Accural tax for free goods

Hi, friends!
     Under Chinese tax law, free sample goods sent out to customers also are due for output tax. The related accounting documents are as below:
     Debit: sales cost
     Credit: inventory
     Credit: accural tax -- output tax
    How to make a configuration in pricing procedure and billing? Please give a hand to me. My mailbox: [email protected]
    Thanks!

Some of the clients, the tax is complex in business and there is need for accruals, you maintain accrual account keys and corresponding provisional GL accounts. The same business requirement arised in my present project same I approached the same way.
Hope this helps
Suddu

TAX on free good item

Dear Gurus,
how can i calculate tax on a free good item and post it to a different GL account withotu having it show up on the output tax line of the sales invoice? this free good tax needs to be calculated and absorbed by the company, not passed on to the customer. the customer must only pay tax on what he buys and not what he qualifies to receive free of cost.
Regards,
ottley

Hello
What our friend Mr.Raja singh suggested is very correct but he missed out there needs to be proper alignment of FROM and TO steps in your pricing procedure
The FROM and TO steps in your pricing procedure for R 100 condition type should exclude the step no of MWST ( this statement may be confusing to read but once you work in the system you can get it)
By doing so suppose if there is a material X say price is 100 $ each and there is an free offer of 10 + 1 material X and say there is a tax of 4 %
In normal case when you order 10 units of material X you will get 11 units of material X and the cost would be 1000 $s + tax 40 $s so total would be 1040 US dollars (tax is calculated for 10 items not the free)
If you follow the steps as suggested by Mr.Raja singh + proper alignment of FROM and TO steps in your pricing procedure the same order would be of cost would be 1000 $s + tax 44 $s so total would be 1044 US dollars (tax is calculated for 11 items
which includes the free item also)
I dont understand what is the negative value which you are talking about
Regards
Raja

GATP in APO and Free Goods Pricing Records in R/3

We have set up Free Goods in SAP R/3. These free goods are granted based upon a series of access sequences in pricing.
We also have our Order Entry system using GATP on our APO box. In that APO instance, we have set up a large number of product substitutions to occur at order time.
When an item is ordered that is NOT subbed to different item by APO and that item has Free Goods associated with it, the Free Goods are granted by R/3 and placed onto the sales order.
When an item is ordered that IS subbed to different item by APO and that item has Free Goods associated with it, the Free Goods are NOT granted by R/3.
Why are the Free Goods being ignored after the substitution? We have Free Goods records in pricing for BOTH items, and neither one is granting the Free Goods.
Is this a bug, a feature, or an oversight ?
Any help in this area will be GREATLY appreciated!!!

Hi John,
GATP in APO does not supports Free Goods.
Rohit
Edited by: rohit kumar on Feb 20, 2009 1:33 AM

Free Goods Pricing Scale

Hello SD gurus,
We want to implement the following price model for our Client.
Our approach is to include Base price and Free goods with it to achieve this
Pricing Requirement:
* As per the Business process of Client - the Material equipment is Wheelchair.
* On the order of Wheelchair, First 4 wheelchairs are always free irrespective of the total ordered Quantity.
*Price per wheel chair is 20USD
*Brief Description is mentioned below in the tabular form-
Units in Item
Price (in USD)
1
0
2
0
3
0
4
0
5
0
6
20
7
40
8
60
9
80
We tried to implement free goods determination with the help of NRAB and ZA00(copy of NA00) condition types , however, it was found that till first 9 ordered quantities, the basic price is calculating the ordered quantity with respect to 20USD, however, the deviation occurs in NRAB condition type (Reqt =59, Alt condition base=29) from the 10th quantity onwards.
We already checked by maintaining Minimum quantity =4 , From=5,no. of free goods=4 in the free goods condition type.
Still it did not worked and reflected the variation in terms of the net value (Basic price - free goods price)
Finally we again created a negative condition type (Discount or surcharge) FREE with the calculation type -fixed amount, wherein the condition record , we fixed the value as 80 USD (20 USD per unit price X 4 minimum free quantities) and found that the system is calculating -80USD for the free goods with respect to the minimum quantity of 4 or more - which is so far correct.
Request you to kindly give suggestions for the scenario wherein -
If the quantity is 0-3 ie less than 4 , the system should populate the price as ZERO as part of the first four free goods concept. Unfortunately our solution is not catering to this specific requirement.
Request your inputs to implement this scenario.
Thanks and regards,
Tarun Jain
SAP SD.

Hi Tarun,
This can be met by using free goods functionality itself.
It will be an inclusive free goods scenario.
The easiest way will be to have a new free goods calculation routine (in VBN1), the routine will have logic like, fixed 4 quantity free always when the free goods condition is triggerd.
Try that, discuss with abaper for the routine creation.
Regards
Jobi

Free Goods Pricing Error

Dear SAP Gurus,
I have configurde the Free Goods as Exclusive and accordingly kept the condition records. When I am creating Sales Order, I have given the first line item as 1482 and when I entered
, the second line item automaticaly vame with item category TANN. Everything is fine up to this. I have kept price in VK11 for the material 1482 and 1483 is the free material.
At the time of creating Sales Order, it giving the error as "Pricing error: Mandatory Condition ZPR1 is missing"
I could not find out any solution for this. Please help in finding the solution for this.
Thanks,
Jans

Hi Jans
Your free goods configuration is something like buy 10 pens and get one pencil free
Free goods are picked by R100 condition type with requirement 55 and aternate base value formula 28 in the pricing procedure
Free goods are represented with item category TANN with pricing as B in VOV7 which measns 100 % discount
This means the price of the pencil is to be maintained as condition record in VK11 for the condition type ZPR1 (in your case) which will be picked by the system and nullifies it with 100 % discount
This is missing from your end (this is my guess only)
Without knowing the price of the second material 1483 how the system will give 100 % discount for it
Soln is
Maintain the condition record for the condition type ZPR1 in VK11 for the free material 1483
Hope this may help you
Regards
Raja

Tax on Free Goods

My customer receives free goods (samples) from vendors. They are flagged on the PO as Free. This deletes the Invoice required flag. There are some countries that require taxes on these item. They want to enter the follow up invoice with MIRO referencing the PO, but they cannot post, as no items from the PO have invoice to reference. They use trasaction FB60 as a work around. Does anyone have a better way to enter the invoice with reference to the PO, preferably using MIRO.
thanks, Jim

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You can get more respones in ERP MM forum.
If you want to move it,Click abuse button,ask moderator to move it to respective forum.

Service tax on free goods issued to contractor

As per recent notification of Service tax dept., company has to pay service tax on cost of free goods provided to contractor. How to configure this scenario in MM?

This is last option. Is it possible to create one discount condition, which knocks off gross value of material but maintain base value for Service Tax?

Output tax for free goods

Hi All,
Appreciate your inputs on the following tax scenario. We need to book out tax for things we give for free to our employees.
Example: We are buying laptop bags from a vendor to give for free to our employees. We pay for example 10% VAT
This will be direct FI invoice where the tax incurred will be absorbed in as expense as we cannot claim input tax credit for this.
This means the input tax code will be zero rated.
The requirement here says, as per the legislation we need to account for output tax under deemed supplies for these free items.
As we are giving these items for free to the employees whom we cannot bill.
In this scenario how do we account the output VAT. Can this be automatically posted in SAP or will this be an manual journal entry.
In any case what will be the accounting entry for this.
cheers
Viru

Hi Viru,
I suggest you may use AR Invoice to issue the item to record output vat.
You may just create dummy customer or set the employee as Customer BP and call it in AR Invoice, then select the item with its corresponding vatable amount, just tick the Tax Only option to recognize only the vat amount of the item. Then to close the debited AR, you still use the Incoming Payment to close the AR invoice at the same time, then choose cash for example (or any other payment means) just change the GL Account to any account you wish to be debited the amount of your output vat.
Regards

Getting pricing for free goods also

Hi guys
    can u Please help me out
i have configured free good Concept am getting free goods while creating Sales order but i am getting pricing for free goods also.
EX: 100 (quantity)
        20 (free goods)
Pricing has done for 120 items .. what need to be done ?
Regards
Amar

hi,
check this configuation steps.
1. define the condition type from NA00 to Za00.
2. define access sequence by selecting new entries as Zaoo and maintian the tables and fields.
3. linK the access seq to ur condition type.
condition type   (created)                    access sequence (created)
ZA00                                                     ZA00
4. Maintain the free goods determination procedure from the std. one NA0000 and copy it as Za0000. and maintain ur condition type in the procedure.
5. after all maintain these free goods procedure to ur sales area.
ex: in normal scenario u will be assigning ur sales area to ur standard pricing procedure as
S.orgD.ChDivA1 + Pr00. but for the free goods u have to maintain as it is to ur std. pricing procedure except document pricing procedure as C - denotes free goods.
6. finally maintain condition records thru VBN1. (there would be a option as inclusive and exclusive). u opt it according to ur requirements.
definetely if you follow those steps, 100% error will not throw while u r creating the sales order.
reward points if it is useful.
regards
KR

Free goods determination & Free of charge Delivery

Hello Gurus,
Actually I have couple of queries regarding free goods.
1) Can we manitain free goods for BOM
Business Scenario - I have created a BOM "ABC" at Main item level (ERLA) with components B, C and want to give 2 different Items X, Y as free goods other that sub components. So is it possible to assign TANN itm catg with TAQ, will it work ? what will happen with taxes for free goods?
Tool Kit, ABC----(TAQ)
                 B -
(TAE)
                 C-----(TAE)
                 X------(TANN)
                 Y------(TANN)
if not possible what will be solution to map the above scenario ?
2) How to maintain the Free of charge pricing procedure?
                       I maen what condition types should we maintain into the free of charge pricing procedure control data (V/08)? If there is a standard pri pro for Free of charge delivery plzz Suggest to me.

Hi,
1. Application of Free Goods in BOM is not posible. Moreover Free goods attract zero value only the material document is updated.
I can suggest you to use the process "Rebate of a Kind" where in you can manually enter the subproducts as free goods only thing is you will have to mention main item lineno in the higherlevel item categor of the sales order.
Though i tried long back the requirement you need, it will not work the best way is to give manually in SO.
2. Free sample maintain seperate process i.e, Document Type, item category Pricin Procedure.
For Configuration please check Img -->SD --> BF --> Free Goods --> Condition Technique free goods
-- Better you maintain "C" Document type while doing determination.
Regards
Sathya

Usage in Free Goods Item category Determination

Hi,
I have configured the Free Goods and it is working fine and I had to utlize the SAP standard Usage "FREE" in the Free Goods Item category determination as per the below:
Sales Doc Type    It.Cat.Grp.     Usage   HLevItCat. DItemCat    MitCat
ZOR1                    NORM           FREE        ZAN1         ZANN
ZOR1                    NORM                            ZAN1         ZANN          TAX
I know this "Usage" is available in CMIR and I don't find it in any other places. So, if any materila for which there is no CMIR, then in that case where should I use this "Usage"? Because I want to change the standard SAP Usage "FREE" to "ZREE". How can I change it and assign it? Please guide me.
Thanks,
Jans

Hi,
Try to do as mentioned below.
step by step process for free goods.
1. need to create the free goods condition(condition tables/access seq and types) and pricing procedure and then assign the same to sales area, doc. Priccing proce and cust pri. Procde.
2.you need to maintain the condition records( tcode: VBN1) and maitain the data as mentioned
above(check Notes 2 sheet)
3. if you don't want the free goods item to be created, then you need to add the NRAB condition type to the pricing procedure(document pricing procedure not Free goods pricing procedure) and need to maintain the condition record for this
condition in VK11.
once all this is done, you can see free goods price reduced in the net price and if additional item is added, then you will the quantity (as per condition record) for that free good.
Thanks,
Srini.

Tax in Free Goods Pricing

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