Tax Procedure in India

Hi All,
There is a requirement to changes in taxes for Indian states Kerala & Gujarat. Post India Budget 2008-2009, the state governments have proposed a few changes to the taxes . There has been a requirement from the State Governments of Kerala and Gujarat, for imposing Social Security Cess on VAT( kerala) & Additional tax( Gujarat) on Base amount applicable from 1st April 2008 and . The details of the same are as below:
As per clause 6 the Kerala Finance Bill, 2008, a Social Security Cess has been imposed on
at the rate of 1% on VAT Payable.
In the State of Gujarat, Here are the changes as per the Bill. As per the Bill the total tax including additional tax, in case of goods attracting 4% will be 4% VAT + 1% Additional Tax and therefore total tax will be 5%. In case of goods attracting 12.5% the rate would be 12.5% VAT + 2.5% Additional Tax and therefore total tax would be 15%.
To meet this requirement at FI side following is been carried out:
1.     Two new conditions will be added to the Tax procedure( TAXINJ):
a.     ZSSC u2013 Itu2019s a new condition proposed for Kerala tax changes which represents the Social Security Cess calculating on VAT in Kerala. This will be applied on VAT (JIP5). This new condition needs be added in the Pricing procedure from PUR.
     This ZSSC tax condition which will be created in FI will post to G/L account -1337027.
b.     ZADT u2013 Its new condition proposed for Gujarat Additional tax. This will be applied on the value on which VAT (JIP5) is calculated. This new condition needs be added in the Pricing procedure from PUR.
     This ZADT tax condition which will be created in FI will post to G/L account -1337032.
3.   Tax codes needs to be created for respective states. Respective changes needs to be done in pricing procedure by PUR.
My question is what need to be done at Purchasing level for Input tax. All I understand is we need to do the testing once tax code is changed. There is no Change at Pricing Procedure level at Purchasing. Please advice what all should be covered in testing ? Do I need to cover all purchasing documents and PO processes like consignment, Subcontracting, Contract,SA etc,
Thanks.
Shalini

Hi,
If u modified the TAXINJ procedure as per the requirement means .
on which amount VAT @ kerala state needs to be calculated?
on which amount VAT @ Gujarat state needs to be calculated?
this is importent from TAXINJ procedure point of view.
Secondly ,
In TAXINJ Tax code is important u should have diff tax code (u allready have it)
Testing point of view:
U should run a domestic procurement cycle and check the account enties at the time of MIGO & MIRO (important).
I think this would be enough.
regards,
SNB

Similar Messages

What is tax procedure in india is only vat?

hi, good morning to everybody,
i am working on sap sd module , i have idea tax determination procedure but i don't have complete idea about tax procedure can anybody explain about tax procedure and what is relation between cin and tax proceudre...
pls help me out...
thanks,
hari shankar..

Hi,
Please refer to
SAP Note - 950977 Country Version India (CIN) Master note for SD FAQs or
SAP Note - 950976 Country Version India (CIN) Master note for MM FAQs
SAP Note - 532557 FAQ: Country Version India (CIN) General queries
Links below : http://help.sap.com/saphelp_47x200/helpdata/en/40/a23c39129ffe2ee10000000a114084/frameset.htm
Rgds.

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

CIN tax procedure TAXINN

hi all,
in
Logistics - General - Tax on Goods Movements - India - Basic Settings - Determination of Excise Duty - Select Tax Calculation Procedure
if i choose to have tax procedure TAXINN,
in
Logistics - General - Tax on Goods Movements - India - Basic Settings - Determination of Excise Duty - Maintain Excise Defaults
i can only define 1 condition type under CVD cond. field..
what if i have a few several more condition type to be defined?
because in J1IEX, the Total BED value is taken from the condition type defined in CVD cond. field.
how is it possible for me to add in a few more condition type into CVD cond. field?
i have tried adding the other condition types under field like A/P BED Cond. and A/P SED Cond. but the value was not being captured in J1IEX.
anyone can advice?
thanks.

Hi all,
my scenario is i need to have the following condition type(customized) to be populated in the excise invoice.
Z001 - Z004 are the customized condition type for their respective tax.
CVD - Z001
Edu CESS - Z002
Higher Edu Cess - Z003
S.A.D - Z004
IN
Tax on Goods Movements - India - Basic Settings - Determination of Excise Duty - Maintain Excise Defaults
since i am using TAXINN, i have managed to tagged Z001 to CVD cond field and the value was able to come out in J1IEX correclty.
what about Z002 to Z004? do i need to switch to TAXINJ so i can populate them into A/P BED cond, A/P SED Cond, A/P AED Cond? what are the alternatives for TAXINN?
i read somewhere that for india implementation, it's best to use TAXINN, as TAXINJ will be obsolete soon. - correct me if i am wrong.
I will need to populate all the values above to in J1IEX so that in my RG23D form can capture and display the value from Z001 to Z004.
thank you.

Error in Tax procedure TAXINJ

Dear Friends,
During creating of tax procedure TAXINJ i am getting error in condition types. The error is Condition type JM01(IN: A/P BED deductib) not defined, please tell me where can i create these condition types i.e. JM01, JA01, JS01 etc...
If possible please tell me step by step and navigation to create tax procedure taxinj.
And tell me what is the difference between TAXINJ and TAXIIN
Advanced thanks
ES.

CIN Configuration
1.1 Maintain Excise Registration
 Logistics general  SAP Ref. IMG SPRO Maintain Excise Basic setting India tax on Goods Movements Registrations
1.2 Maintain Company Code Settings
SPRO   Basic settingIndia  tax on Goods Movements Logistics general SAP Ref. IMG   Maintain Company Code Settings
1.3 Maintain Plant Settings
tax on Goods Logistics general  SAP Ref. IMG SPRO   Maintain Plant Basic setting India Movements Settings
1.4 Maintain Excise Groups
SAP Ref. IMGSPRO   Maintain Basic setting India  tax on Goods Movements Logistics general  Excise Groups
1.5 Maintain Series Groups
SAPSPRO  Basic setting India  tax on Goods Movements Logistics general Ref. IMG Maintain Series Groups
1.6 Maintain Excise Duty Indicators
tax on Goods Logistics general  SAP Ref. IMG SPRO   Maintain Excise Duty Basic setting India Movements Indicators
1.7 Maintain Subtransaction Type with Text
India  tax on Goods Movements Logistics general  SAP Ref. IMG SPRO   Maintain Subtransaction Type with TextBasic setting
1.8 Determination of Excise Duty
tax Logistics general  SAP Ref. IMG SPRO   Select Tax Calculation Determination of Excise DutyIndia on Goods Movements Procedure
1.9 Maintain Excise Defaults
SAP Ref.SPRO   Determination of ExciseIndia  tax on Goods Movements Logistics general IMG   Maintain Excise DefaultsDuty
1.10 Condition-Based Excise Determination
tax on Goods Logistics general  SAP Ref. IMG SPRO   Define Tax Code for Condition-Based Excise DeterminationIndia Movements Purchasing Documents
1.11 Condition-Based Excise Determination
tax on Goods Logistics general  SAP Ref. IMG SPRO   Assign Tax Code to Condition-Based Excise DeterminationIndia Movements Company Codes
1.12 Classify Condition Types
SAPSPRO   Condition-BasedIndia  tax on Goods Movements Logistics general Ref. IMG   Classify Condition TypesExcise Determination
1.13 Maintain Chapter IDs
tax on Goods Logistics general  SAP Ref. IMG SPRO   Maintain Chapter ids Master dataIndia Movements
1.14 Assign Users to Material Master Screen Sequence for Excise Duty
SPRO  Master dataIndia  tax on Goods Movements Logistics general SAP Ref. IMG Assign Users to Material Master Screen Sequence for Excise Duty
1.15 Specify Excise Accounts per Excise Transaction
tax on Goods Logistics general  SAP Ref. IMG SPRO   Specify Excise Accounts per Excise Account determinationIndia Movements Transaction
1.16 Specify G/L Accounts per Excise Transaction
tax on Goods Logistics general  SAP Ref. IMG SPRO   Specify G/L Accounts per Excise Account determinationIndia Movements Transaction
1.17 Incoming Excise Invoices
SAPSPRO   BusinessIndia  tax on Goods Movements Logistics general Ref. IMG   Incoming Excise InvoicesTransactions
1.18 Define Processing Modes Per Transaction
 Logistics general  SAP Ref. IMG SPRO   Define Processing Modes Business TransactionsIndia tax on Goods Movements Per Transaction
1.19 Define Reference Documents Per Transaction
tax on Goods Logistics general  SAP Ref. IMG SPRO   Define Reference Documents Per Business TransactionsIndia Movements Transaction
1.20 Maintain Rejection Codes
SAPSPRO   BusinessIndia  tax on Goods Movements Logistics general Ref. IMG   Maintain Rejection CodesTransactions
1.21 Specify Which Movement Types Involve Excise Invoices
Logistics SAP Ref. IMG SPRO   Specify Which Business TransactionsIndia  tax on Goods Movementsgeneral Movement Types Involve Excise Invoices
1.22 Outgoing Excise Invoices
tax on Goods Logistics general  SAP Ref. IMG SPRO Assign Outgoing Excise Invoices  Business TransactionsIndia Movements Billing Types to Delivery Types
1.23 Maintain Default Excise Groups and Series Groups
 Logistics general  SAP Ref. IMG SPRO  Outgoing Excise Invoices  Business TransactionsIndia tax on Goods Movements Maintain Default Excise Groups and Series Groups
1.24 Subcontracting Attributes
tax on Logistics general  SAP Ref. IMG SPRO   Subcontrac Subcontracting Business TransactionsIndia Goods Movementsting Attributes
1.25 Maintain Movement Type Groups
SPRO   BusinessIndia  tax on Goods Movements Logistics general SAP Ref. IMG   Subcontracting SubcontractingTransactions Attributes
1.26 Utilization Determination
SAPSPRO   BusinessIndia  tax on Goods Movements Logistics general Ref. IMG   Utilization Determination UtilizationTransactions
1.27 Specify SAPscript Forms
tax on Logistics general  SAP Ref. IMG SPRO   Specify Excise Registers Business TransactionsIndia Goods Movements SAPscript Forms
1.28 Number Ranges
SAP Ref. IMGSPRO   Number ToolsIndia  tax on Goods Movements Logistics general  Ranges
1.29 Message Control
 SAP Ref. IMG SPRO   Message ToolsIndia  tax on Goods MovementsLogistics general Control
Regards,
Rajesh Banka

Tax Posting without maintaining Tax Procedure

Hi Gurus -
Currently we get invoice information from thrid party software to post into SAP through interface. The Tax Code and Tax Amount are passed to SAP as a line item and the Taxes are already calculated in the thrird party and we only need to post that tax amount with Tax Code in SAP. Could anyone explain me what are the different config settings need to be done to accomodate this? I don't want SAP to calculate the Tax because the invoice file that comes from thrid party software already brings in the calculated Tax values.
Pls suggest how to handle this in SAP.
Thanks
Jay

Hi,
Even though you do not want the system to calculate the taxes, still, if you want the tax codes to be appearing in the transaction, you have to customize / use the standard tax procedure that is provided.
Now once you have assigned the tax procedure to the country, you can create the tax codes and at the time of creation of the tax codes make sure that all the tax codes have only the descriptions, but the rates to be maintained as 0. this will ensure that SAP does not calculate tax again.
So for example if you have two different tax combinations like:
ED + 4% VAT
ED + 12.5% VAT,
you can create them as two tax codes say, V1 and V2, but inside both these tax codes, the % has to be maintained as 0.
The above example is on the assumption that you will be using TAXINJ as the tax procedure.
If you are using TAXINN, then the condition types are to be maintained with 0%.
Again assuming that you are implementing in India. The same logic can also be applied for other countries.
Regards
Venkatesh

Tax procedure compatability in different countries

Hi All,
Can we have two companies (Company codes) operating in differeng countries under same client?
We are operating in India, can we have another subsidiary say in Spain within same Client?
And is the Tax Procedure Company Code specific or Client?
We are currently using TAX INJ condition, will it be compatable to the Tax procedure of Spain or we have to migrate to TAX INN condition to incorporate TAX procedure of Spain.
Regds,
Ritesh

Hi Ritesh,
Yes. you can have two company codes operating under same client. You can have a company code for India and another for Spain But keeping under same client. This allows you to share the settings like master data, config settings, and also it enables intercompany transactions between India and Spain .
Tax Procedure is country specific actually. Hence you will be assigning your tax calculation procedure for a specific country i.e in this case India and spain respectively. Transaction code is OBBG. And the procedures will be different.
Hope it helps!
Thanks & Regards,
Preethi

Transporting Tax Procedure - Through Request or Adjustment ?

Hi All Experts,
Good Morning !
I have issue where India TAXINN procedure did not copied fom SAP Standard client unfortunately. Where is it present in rest client. I am thinking of two approach for the same to add the Tax Procedure.
A ) Create the transport request and add the tax procedure and move to client.
B ) By using Adjustment feature between two clients.
What is the best policy to go ahead with ?
1 ) If TR is approach - Then how to add the complete tax procedure component in request ? is this possible ? The mistake I did, I tried by making changes in text but only textual changes got transported in earlier request rest all condition types and details went blank. That created much confusion and now facing some inconsistancies. My BASIS team doesnt know about this how to add particular component to TR. My requirement is want to transport the Tax Procedure as it is presented in source client which intact in and working perfect so that I can have the same consistent effect in my current client.
If anybody has gone through the same issue, please comment on this. It will be great guidance for me and who are reffering this thread.
Thank you for patient reading !
Regards,
Sharvari Joshi.

Self Solved.
Regards,
Sharvari Joshi.

Tax Procedure in Bangladesh

Hi,
In Bangladesh, at the time of making procurement, they are paying VAT to vendor,
During sales of finished product, they are utilising the VAT against sales VAT.
How to address. What TAX PROCEDURE we have to follow.
Vijay

Dear experts,
Can you please help to explain a little more on the tax procedure for bangladesh? Do I copy India's tax procedure as a basis?
Also, I noticed that the VAT percentages given by my users varies, e.g. 15%, 3%, 5% etc.
Can anyone please help to explain the rationale behind this?
Thanks alot in advance
Cheers,

Tax Procedure Edit

Hi,
We need to edit field value of "J 1ICAT1AP" in " J_1IEXCDEF" table for tax procedure TAXINJ.
How we can do this.
Thanks,
Vikas Rander

Hi,
Go to SPRO > Logistics - General > India > Basic Settings > Determination of Excise Duty > Maintain Excise Defaults

Let me know recommended Tax Procedure for CIN

I heard from some of my friends Condition based Tax procedure is recommended by SAP (ie. TAXINN).
If the above statement is true, Can any help me to identify the SAP Note no. for this recommendation? Because i need to give the same to my client.
Thanks,
Venkat

Hi,
952289 - General Clarifications on TAXINN
950976 - Country Version India (CIN) Master note for MM FAQs
Go to following link
[https://websmp106.sap-ag.de/notes]
and enter Search Terms as "TAXINN" it will provide list of all the possible SAP Notes relevant to TAXINN

Tax procedure for SEZ companies

hi,
sap gurus,
My client's plant is in SEZ zone and he does exports from there, i would like to know what are tax procedures that have to be captured in SAP and how it is maintained in SAP. A step by step guide would be of immense help to me.
Thanking you all in advance for your kind help.
points will be rewarded suitably
rgds
Toshniwal

Hi,
1.JDEPOT - Depot Sales
2.JEXPOR - Export Sales
3.JFACT - Factory Sales
4.JSTKTR - Stock Transfer
Country Version India comes with four pricing procedures as follows:
JINFAC (Sales from manufacturing plants)
JINEXP (Export sales)
JINDEP (Sales from depots)
JINSTK (Stock transfers
These are the standard pricing procedure for SEZ.
for their config. you can find the relevant details in www.help.sap.com
regards,
Siddharth.

Are tax procedures TAXIN and TAXINN same?

Guys, in OBYZ transaction I don't find TAXINN, I find only TAXIN. Are these one and the same? If not, how do I activate TAXINN in the system?
Regards,

Hi,
When you enter a purchasing document, for example, a purchase order, the R/3 System automatically calculates the applicable excise duties using the condition technique. The standard system comes with two tax calculation procedures:
- TAXINN - IN; India taxes new
- TAXINJ - Sales Tax India
TAXINN:
1. It is Condition Based Tax procedure.
2. Tax Code is required to be maintained in Condition Record, & if Tax Code is not found in Condition Record, Sales Cycle will go upto billing, but not release to accounting. Hence even a single Tax code may suffice the requirement for different Tax rate.
3. Tax condition record is maintain through TCode FV11.
4. It only supports condition-based excise determination.
TAXINJ:
1. It is Formula Based Tax procedure.
2. It was most commonly used upto initial phase of R/3 4.7, but the latter implementations were with TAXINN.
3. Tax Code plays a vital role, as the Tax Rate are maintained in Tax Code in TCode FTXP..
4. It is complex compared to TAXINN
5. It can supports both condition-based excise determination and formula-based excise determination.
6. For Example, code for 362 routine for Condition formula for alternative calculation type
Activation steps are same as above:
>Go to transaction code OBCO to define the tax procedure TAXINN and TAXINJ.
>Then assign country to tax procedure in transaction code OBBG
Regards,
Jyoti

Income tax depreciation in india

Dear All,
How do we adress the income tax depreciation in India.
As we know the depreciation treatment for Income tax depreciation is a block concept...how do we adress that...
Could any one explain elaborately if possible...short and precise inputs are also most welcome...
Please help to resolve the issue
Sapfrido

Existing group asset concept for income tax depreciation functionality was withdrawn with Note 738919.
Following limitations/restrictions are there in the existing process.
Limitations of Group Assets
Locking
Cap on the volume of transactions u2013 99,999
Limitations of Report J1IQ
Opening Balance Calculation
Depreciation Calculation for Assets acquired and Put to use for less than 180 days
Depreciation Calculation for different fiscal year variants
Assets Acquired and Sold in the same year
Asset Block Retirement by Scrapping
Asset put to use date capture
Report Formatting Issues
The solution for IT Depreciation Calculation is being revamped and the new solution shall be available in EhP5.
If you have further query about new solution better to contact SAP by raising the OSS message by using component -XX-CSC-IN-FI

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.

Tax Procedure in India

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