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WINLEN 4-1 SAP AG

SAP AG 2002

Sales with VAT

Contents:

VAT Implication on Sales Process Business Place SD ConfigurationMaster DataSales Scenarios

WINLEN 4-2 SAP AG

SAP AG 2002

VAT Implication in Sales Processes

SAP R/3

Purchasing

Invoice Verification

Inventory Valuation

Delivery

VAT Accounting

Sales Order Billing

Utilization & Tax Payment

VAT impact

The areas getting affected by VAT are the sales order in which the VAT taxes appear and the billing document where the accounts get posted. We are not covering the VAT utilisation.

WINLEN 4-3 SAP AG

SAP AG 2002

Business Place in R/3

BUSINESS PLACE A New

Organizational Unit in Logistics

Tax Reporting entity

Defined at Company Code

Level

A new Organizational entity - Business Place (BUPLA) has been brought in use in Logistics.

Business Place represents a Tax Reporting entity for an Organization in a state or Region.

Business Place in R/3 will be defined at the Company Code level and will be assigned to Plant(s).

One Business Place can be assigned to more than one Plant in a Region, but one Plant cannot be assigned to more than one Business Place.

Business Place is currently used by SAP customers in many countries for VAT related Tax Reporting.

Note: In India Business Place field was in use in Finance for EWT before 1st April 2003, however, 1st April 2003 onwards this field was replaced with Section Code for EWT. Now this field is in use for Logistics.

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SAP AG 2002

Business Place Assignment

Business Place is assigned to Plants

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SAP AG 2002

Business Place Applicability

Business Place used for VAT related Tax reporting in Sales and DistributionMaterials Management

Before using in Logistics, Business Place was used in Finance till 1st April 2003.

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SAP AG 2002

Business Place

Entity Business Place will primarily be used for -Defining Vat Registration Number Determining Official Number Range for :

All Billing Transactions in SDAll Credit Memo Transactions in MM

Consolidating data for Period End Processing requirements Determining "Alternate G/L Accounts" for Taxes

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SAP AG 2002

Business Place Scenario 1

Define Single Business Place for all the Plants in a state.Define Single Business Place for all the Plants in a state.

PLANT 1PLANT 2

PLANT 3

# Single VAT Registration

# Consolidation for all Plants

before utilization

# Single period end process

reports for all plants

COMPANY ABC

STATE : KARNATAKA

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SAP AG 2002


Define Separate Business Place for both Plants in the state.Define Separate Business Place for both Plants in the state.

PLANT 1PLANT 2

VAT Registration : XXX

COMPANY ABC

STATE : KARNATAKA

VAT Registration : YYY

Output is under deferral/ exemption scheme

An Organization has two plants in one state

Output of one plant is under deferral/ exemption scheme

State Law may require separate registration number for both the plants

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SAP AG 2002


State specific number range requirements may be specified

Solution: Business Place is used to determine number range objects.

Solution: Business Place is used to determine number range objects.

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SAP AG 2002


Need for maintaining separate VAT Credit and Debit accounts for different states

Solution: Separate G/L Accounts are maintained at state level. Business Place is used to determine correct G/L account at the time of posting.

Solution: Separate G/L Accounts are maintained at state level. Business Place is used to determine correct G/L account at the time of posting.

WINLEN 4-11 SAP AG

SAP AG 2002

Intra State Finished goods VAT applicable Sales pricing and Tax procedure

Sales Order Pricing

Basic Rate Rs85X 10 pcs= Rs 850

Excise Duty @20 = Rs 170

Tax Base Amount Rs 1020

VAT Rs. 102

Total Rs.1122

Pricing procedure JFACT

Condition type UTXJ

Access sequence JIND

Access Country/ Plant Region / Region/ TaxCl1Cust/ Tax Cl.Mat

Tax Code S1

Plant detailsCustomer masterMaterial master

Tax procedure TAXINJ JIN 6

10% VAT

10% VAT rate used for ease of representation. Actual VAT rates as per law.

WINLEN 4-12 SAP AG

SAP AG 2002

SD Configuration

Define Condition Types

IMG PathSales and Distribution Basic Functions Pricing Pricing Control Maintain Condition Types (Transaction V/06)

New SD tax conditions are introduced for the VAT:JIN6: A/R VAT PayableJIN7: A/R CST Payable under VATJIN8: A/R CST Surcharge Payable under VAT

The condition category of these and the existing condition types should be changed to D

These new tax conditions would need to be added to the relevant pricing procedure and the tax procedure

WINLEN 4-13 SAP AG

SAP AG 2002

SD Configuration

Change SD Pricing Procedure

IMG PathSales and Distribution Basic Functions Pricing Pricing Control Define and Assign Pricing Procedure (Transaction V/08)

The control parameters for JIN6, JIN7 and JIN8 would remain same as JIN2, JIN4 and JIN5 respectively

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SAP AG 2002

SD Configuration

Create New Condition Table

IMG PathSales and Distribution Basic Functions Pricing Pricing Control Define Condition Tables (Transaction V/04)

2 condition tables are required to determine UTXJ in domestic and export sales document: Table 368 and Table 11

Table 368 (condition table for domestic pricing) to have following fields:ALAND: CountryWKREG: Region of delivering plantREGIO: Region of ship-to-partyTAXK1: Customer tax classification 1TAXM1: Material tax classification 1

Table 11 (condition table for export pricing) to have the following fields:

ALAND: CountryLAND1: Destination countryTAXK1: Customer tax classification 1TAXM1: Material tax classification 1

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SAP AG 2002

SD Configuration

Change in Access Sequence

IMG PathSales and Distribution Basic Functions Pricing Pricing Control Define Access Sequence (Transaction V/07)

Add the condition tables 11 and 368 in the access sequence JIND Put condition table 11 before 368, so that the system checks first if the sale is an

export or domestic

The additional accesses are used in UTXJ to determine the Output Tax Code in SD Documents

These accesses do not use jurisdiction code and would help users to determine the tax code when Tax Jurisdiction code is switched off

In Export Pricing Procedure also UTXJ would determine the Output Tax Code maintained for Export

WINLEN 4-16 SAP AG

SAP AG 2002

SD Configuration

Define Condition Types (TAXINN)

IMG PathSales and Distribution Basic Functions Pricing Pricing Control Maintain Condition Types (Transaction V/06)

New SD tax conditions are introduced for the VAT:JVAT: A/R VAT PayableThe condition category of these and the existing condition types should be changed to D

These new tax conditions would need to be added to the relevant pricing procedure and the tax procedure

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SAP AG 2002

SD Configuration

Settings for Tax Processing (TAXINN)

IMG Path Financial Accounting Tax on Sales and Purchases Basic Setting Check and Change setting for tax processing (Transaction OBCN)

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SAP AG 2002

SD Configuration

Define Account Keys (TAXINN)

IMG Path Sales and Distribution Basic Function Account Assignment/Costing Revenue Account Determination Define and Assign Account Keys Define Account Keys

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SAP AG 2002

SD Configuration

Change SD Pricing Procedure (TAXINN)

IMG PathSales and Distribution Basic Functions Pricing Pricing Control Define and Assign Pricing Procedure (Transaction V/08)

Condition type JVAT added

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SAP AG 2002

SD Configuration

Define Business PlaceSM31 Table name: J_1BBRANCV

Define a new business place Create business place for different controlling areas Enter the country and region for which Business Place is created

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SAP AG 2002

SD Configuration

Assign Business Place to PlantSM31 Table name: J_1BT001WV

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SAP AG 2002

Alternate G/L Accounts: Introduction

To determine alternate G/L accounts for Taxes

It is used for Sales Taxes and not meant for excise posting

Helpful in reporting

Useful in maintenance of Tax Codes (input & output)

The concept of alternate G/L Account is used for LST, CST etc and not applicable to excise related duty

This feature will help to determine alternate G/L accounts for Taxes, which will in turn help user for reporting and maintenance of Tax Code

This functionality is available for both types of taxes (Input and Output)

WINLEN 4-23 SAP AG

SAP AG 2002

Alternate G/L Accounts: Usage

Alternate G/L account can be used in the following business processes

Determination of Separate G/L Account for VAT and Non VAT StatesDetermination of Separate G/L Account for Deferral & Non-Deferral Plants by using Business PlaceDetermination of Separate G/L Account for Standard and Sub-contracting Purchases Any other Business requirements

WINLEN 4-24 SAP AG

SAP AG 2002

Alternate G/L Accounts: Maintenance

Alternate G/L account can be maintained based on:

Chart of accounts

Business Place

Transaction Key

Tax Code

It may be created for Alternate Debit as well as credit account.

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SAP AG 2002

Alternate G/L Accounts: Configuration

Note 607907 to be applied

Transaction: SM30

Table name: J_1IT030K_V

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SAP AG 2002

Master Data

Plant Region

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SAP AG 2002

Master Data

Tax classification Customer

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Master Data

Tax classification Material

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SAP AG 2002

Master Data

Tax code determination

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SAP AG 2002

Master Data

VAT rate 12.5%

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SAP AG 2002

Official Document number Configuration

Define document ClassAssign the Document class to the Sales Area and RegionDefine Document NumberingAssign the Document numbering for the Business Place

Define the Document class through SM30 in view the V_DOCCLS. For example V for VAT and B for BOS.

Assign the VAT/BOS document class for the Plant Region and Sales Area / Document type in the view J_1IDCLSDET.

Create the Number group in the view V_1ANUMGR1. Create the number range through the transaction J1AB. Assign the Document Class / Number Group / number range for the company code and

Business place in the view V_OFNUM_TW_2. Assign the accounting document type for the Billing type in transaction VOFA. Assign the Routine 350 at the item level of the Copying control. The transaction code is

VTFL for Delivery related and VTFA for the Order related billing. Assign any one of the document class for Example either V VAT or B- Bill of Sales for

the country IN in the view V_T003_B_I. You may refer the OSS note 831870 for other information.

WINLEN 4-32 SAP AG

SAP AG 2002

Official document Number Process flow

Identify the country of the customer. IN Export -BOS

No

Check the Tax code in table J_1iexcdef

Yes

Deemed Export - BOS

Same Tax Code

Check the Tax code in table J_1iexmptcode

Exempted Sales - BOS

Exempted Tax Code

Different Tax Code

Check the VAT Registration No in the Customer Master Tax code Field

Normal Tax Code

Un Registered customers Sales - BOS

Unregistered CustomerRegistered

customers Sales - VAT

Yes

All the Logic for Determining the VAT or BOS has been written in the Data transfer routine 350 assigned to the item category.

The Tax code will be determined in UTXJ condition type. The Deemed Export tax code should be maintained in the Excise default table J_1iexcdef table. If the

determined tax code is similar in the default table then it is a Deemed export sales and the Bill of Sales document class will be used.

The Exempted tax code can be maintained in the view J_1iexmptcode. When the system find the determined tax code in this table then this sales will be treated as Exempted sales and Bill Of Sales Document class will be determined.

The VAT Registration number should be maintained in the Tax code 2 field of the customer master. Please note that the VAT Registration number provided in the standard can not be used for CIN.

For some of the state for the Unregistered Customer also the VAT Invoice should be issued. To handled this the User exit J_1I7_CHECK_CUSTOMER_VAT can be used to change the document class as VAT.

When the Customer country is in India and the tax code determined is not Deemed export Tax code and the tax code is not Exempted sales and the customer is Registered then VAT Document class will be determined.

All the VAT / BOS document class for the Plant Region and Document type of the Billing and Sales area will be maintained in the view J_1IDCLSDET.

WINLEN 4-33 SAP AG

SAP AG 2002

Organization Structure

Chart of A/c INT

Plant 1 Mumbai IN10 Maharashtra

Plant 3 Chennai IN20

Sales Area (0001/ 01/ 01)

Company Code (EWT)

VAT Reg ID 1 VAT Reg ID 2

Shipping point 0001

Shipping point 0002

Ex gp E1, Series gp S1 Domestic, S2 Exports Ex gp E2, Series gp S3

We are doing sales from Plant IN10 only which is at Mumbai state Maharashtra

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SAP AG 2002

Master Data

Material Master MBG01 - Professional Mountain Bike with GearsMB01 - Professional Mountain Bike without Gears

Customer Master INC01 Mumbai DealerINC02 Chennai DealerINC08 Depot Customer for VATINC09 - Depot Customer for CST

G/L Accounts

VAT Payable A/c - Used for paying VAT on all sales

VAT Alternate GL A/c - Used for paying VAT on all sales

WINLEN 4-35 SAP AG

SAP AG 2002

Sales Scenarios with VAT

Followings are the scenarios with VAT

Intra State Finished goods (VAT applicable- general VAT rates)

Finished goods (VAT exempt)

Depot sales (VAT applicable)

Inter State Finished goods

Exports Finished goods

Deemed Exports Finished Goods

Stock Transfer Inter State

Intra State

WINLEN 4-36 SAP AG

SAP AG 2002

Intra State Finished goods (VAT applicable general VAT rates)

Sales Order Pricing




VAT Rs. 102

Total Rs.1122


Condition type UTXJ



Tax Code S1

Plant detailsCustomer masterMaterial master

Tax procedure TAXINJ JIN 6

12.5% VAT

Participants can try out Finished Goods (VAT applicable with alternate G/L Accounts)

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SAP AG 2002

Intra State Finished goods (VAT exempt )

Accounting documents


CENVAT suspense ED payable

Sales revenue accountCustomer accountCENVAT suspense

3

Bill of Sale

4

Excise invoice

Billing

2

ShippingShipping

Sales Order

1

5

Period end processing

NVAT-MAT1 VAT 0%

Intra-State Customer Cus_intra1

WINLEN 4-38 SAP AG

SAP AG 2002

Intra State - Depot Sales (VAT applicable)

Mumbai Plant IN10 (Factory)

Delivery

Excise Invoice

Mumbai Plant IN 30

(Depot)

Goods Receipt

Stock in Transit

Sales Order

Goods Issue

Billing

Purchase Order

VAT Register Updation


Mumbai Plant IN 30

(Depot)


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SAP AG 2002

Inter State -Finished goods 2

ShippingShippingSales Order

1

4

Excise invoice

3

Bill of Sale

Billing 5



Dr.Customer a/cCr.Sales revenue a/c Cr.CST payableCr. Cenvat Suspense

Dr.CENVAT suspenseCr. ED payable

Inter State Customer (KAR) Cus_inter1

VAT- MAT1 (VAT rate 10%)

WINLEN 4-40 SAP AG

SAP AG 2002

Exports -Finished goods

2


1

4

Excise invoice

3

Bill of Sale

Billing

5


Foreign Customer (UK) Cust_exp1 MAT-EXP

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SAP AG 2002

Deemed Exports -Finished goods

2


1

4

Excise invoice

3

Bill of Sale

Billing

5


Deemed Export Customer CUST_DEXP1VAT- MAT1 (VAT rate 10%)

WINLEN 4-42 SAP AG

SAP AG 2002

Intra State Finished goods (VAT exempt) Sales pricing and Tax procedure

Sales Order Pricing




VAT Rs. 0

Total Rs.996


Condition type UTXJ



Tax Code S2

Tax procedure ZEXVAT ZIN 1

0% VAT

WINLEN 4-43 SAP AG

SAP AG 2002

I N 1 0 M u m b a i

E x c i s e I n v o i c e

S t o c k i n T r a n s i t

C r I n v e n t o r y A / c P l a n t 1 = R s 1 0 0 D r I n v e n t o r y A / c P l a n t 2 = R s 1 0 0

N o A c c o u n t i n g E n t r i e s a n d N o I n v o i c e v e r i f i c a t i o n N o V A T c r e d i t s

S T O f r o m P l a n t 2 Q t y 1 E AR a t e 1 0 0

G o o d s I s s u e M v t 6 4 1

C r E D P a y a b l e A / c = R s 1 6 D r E D C l e a r i n g A / c = R s 1 6

I N 2 0 C h e n n a i

C a p t u r e & P o s t E x c i s e I n v o i c e

G o o d s R e c e i p t M v t 1 0 1

D r R G 2 3 A / C A / c = R s 1 6 C r E D C l e a r i n g A / c = R s 1 6

M A H A R A S H T R AV A T R e g I D 1

T A M I L N A D U V A T R e g I D 2

P e r i o d E n d P r o c e s s i n g

P e r i o d E n d P r o c e s s i n g

Inter-State Stock Transfer via SD

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SAP AG 2002

Intra-State Stock Transfer

M u m b a i P l a n t 1

E x c i s e I n v o i c e

S t o c k i n T r a n s i t

C r I n v e n t o r y A / c P l a n t 1 = R s 1 0 0 D r I n v e n t o r y A / c P l a n t 2 = R s 1 0 0

N o A c c o u n t i n g E n t r i e s a n d N o I n v o i c e v e r i f i c a t i o n N o V A T c r e d i t s

V A T R e g i s t e r U p d a t i o n

( Q t y & V a l u e )

S T O f r o m P l a n t 2 Q t y 1 E AR a t e 1 0 0

V A T R e g i s t e r U p d a t i o n

( Q t y & V a l u e )

G o o d s I s s u e

C r E D P a y a b l e A / c = R s 1 6 D r E D C l e a r i n g A / c = R s 1 6

M u m b a i P l a n t 2

C a p t u r e & P o s t E x c i s e I n v o i c e

G o o d s R e c e i p t

D r R G 2 3 A / C A / c = R s 1 6 C r E D C l e a r i n g A / c = R s 1 6 M A H A R A S H T R A

V A T R e g I D 1

WINLEN 4-45 SAP AG

SAP AG 2002

VAT ListingReport RFUMSV00

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