SALES TAX
VAT
means valued added tax or LST Local Sales Tax
CST
mans Central Sales Tax
Purchase Sales
(Output tax)
(Input tax)
1 2 3 4
Local outside Local Outside
purchases state Sales State sales
VAT/CST
CST purchase VAT /L CST sales
Purchase
Basic 100 100 200 200
Excise 8% 8 8 20 20
VAT 4% 4.32(B+E) 2.16(CST2%) 27.50(VAT12.5%)
4.4(CST2%)
--------- -------- --------- ---------
Bill amount 112.32
110.16 247.50 224.40
======
===== ===== ======
Payment to sales Department
- Local sales –Local
purchases 27.50-4.32=23.18
- Local sales –CST
purchases 27.50=27.50
- CST sales –Local
purchases 4.4-4.32=0.08
- CST sales –CST
purchases=4.4=4.4
At the time of local purchases, tax
paid on purchases, can be adjusted –to tax payable at the time of sales. (Local
sales /CST sales)
At the time of CST purchase, tax paid
on purchases can not be adjusted –to add to inventory.
Excises rates are based on products
Excise rates are given central excise
tariff, in central excise tariff we have 8 digits chapter ID.
52000000
Textiles 8%
Central excise will be covered in the
end.
We are testing now without excise
duty.
Customization of sales tax
- Define tax procedure
Path :SPRO-Financial accounting
–Financial accounting global settings-Tax on sales /purchases-Basic
settings-Check calculation procedure.
Double click on define
procedures
Select new entries button
Procedure :H Tax
Description :Sales tax India
Save
Press enter to save in your
request
Select H Tax
Double click control data
folder
Select new entries data
folder
Select new entries button
Step Co C
Type Description From To
Account key
10 0 Select
BASB
Base amount
20 0 MWVS
Input tax 10 10 Select VST -Input tax
30 0 MWAS
Output tax 10 10 MWS output tax
Save
Assign
country to calculation procedure
Up to basic settings the path is same
Assign country to calculation procedure
Select position button
Give the country :IN for India
Enter
For country IN assign
procedure H tax
Save
Press enter to save in your
request
Define tax
codes for sales and purchases
Up to tax on sales of purchases the path is
same-Calculation –Define-Tax codes for sales and purchases. (Tr.code is FTXP)
Give the country :IN for India
Enter
Give the tax code :Vo
Enter
Description :0% input tax
Tax type :Select V input tax
Enter
Input tax, tax percent rate
0
Keep the cursor on ouput
tax, tax percent rate
Select deactivate line (F5)
button
Save
Tax code :V1
Enter
Description :4% input tax
Tax type :select V input tax
Enter
Input tax, tax % rate 4
Keep the cursor out put
tax, tax percent rate
Select deactivate line
button
Save
Tax code :A0
Enter
Description :0% output tax
Tax type :select A output tax
Enter
Output tax, tax percent
rate 0
Keep the cursor our input
tax, tax percent rate
Select deactivate line
button
Save
Tax code :A1
Enter
Description :12.5% output tax
Tax type :Select A out put tax
Enter
Output tax, tax percent
rate 12.5%
Keep the cursor on input
tax, tax percent rate
Select deactivate line
button
Save
Assign tax
codes for non-taxable transactions
Path :Up to tax on sales/purchases the
path is same Posting-Assign tax codes for non-taxable transactions (Tr code is
OBCL)
Select position button
Give your company code :AML
Enter
For AML select input tax V0
Out put tax Vo
Save
Press enter save in your request
Creation
of GL master FS00
1. VAT receivable Current
assets,
2. VAT payable Loans & Advances
Current liability
Tr code is
FS00
Give the GL account no. :200155
Company code :AML
Select with template button
Give the GL account no. :200120 (Inventory RM)
Company code :AML
Enter
Change short and GL long
text to VAT receivable
Select create / Bank
/Interest tab
Field status group change
to G041 (Tax office clearing accounts)
Save
One more account
Give the GL account
no.100505
Company code :AML
Select with template button
Give the GL account no. :200155
Company code :AML
Enter
Select type/Description tab
Change account group to
current liability and provisions
Change short text and GL
account long text to VAT payable
Save
Give the GL account
no.:200120
Company code :AML
From the menu select GL
account change
Select control data tab
Tax category :Select * (All tax types
allowed)
Select posting without tax
allowed check box
Save
Ignore the warning message
press enter
GL Account 300000 Sales A/c
Company code AML
From the menu select GL
account change
Tax category :select *
Select posting without tax
allowed check box
Save
Ignore the message press
enter
Assignment
of accounts for automatic postings:
Path :SPRO-Financial accounting
–Financial accounting global settings-Tax on sales/purchases-posting-Define tax
accounts (OB40)
Double click on
transactions à VST (input tax)
Give the Chart of
Accounts :AML
Enter
Select save button or
Ctrl+S
Give the account :200155
VAT receivable
Save
Press enter to save in your
request
Select back arrow
Double click on transactions
MWS(output tax)
Save
Give the account no.100505
VAT table
Save
Press enter to save in your
request
In live environment FI consultant’s
job: Customization
Creation of Tax procedure
Creation of tax codes
Creation of GL accounts
Assignment of GL accounts
MM module:
Purchase order material no.RM1
Purchase order vendor 1234
Purchase order Qty 1 Kg
Purchase order Rate 100
Purchase order tax code V1 (4% input
tax)
Goods receipt
Tax procedure:
Base amount 100 (1*
100) inventory Account
Input tax on base amount 4 VST
-200155 VAT receivable
(V1-4% ) -----
Vendor credit 104
===
SD module:
Sales order Customer no. 9876
Material
FG1
Qty 1Kg
Rate 200
Tax
code A1 (12.5%) output tax
Tax procedure
Base amount 200 sales account
Output tax on base amount 25 MWS
-100505 VAT payable
At 12.5% -----
Customer
debit 225
===
In FI for sales:
Customer account Dr 225
To
sales 200
To
VAT payable 25
Save
Sales
invoice posting Tr code is F-22
Give the document date :Today’s
date
Company code :AML
Posting key :01 customer debit
Account :6600001
Enter
Give the amount :225
Select calculate tax check
box
Text :Tax sales invoice posting
Posting key :50
Account no. :300000 (Sales a/c)
Enter
Amount :*
Tax code :Select A1
Business area :AMLH
Text :+
From the menu select
Document- Simulate
Double click on VAT payable
line item
Business area :AMLH
Text :+
Save
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