Vat Implementation

Prahlad Y
SAP Consultant (FI/CO) Email Address: pyadake@gmail.com

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BRIEF EXPLANTION
PURCHASE INVOICE
SL NO DESCRIPTION QTY RATE %TAX AMOUNT

1 ITEM-A 10 100.00 13.5 1000.00
2 ITEM-B 10 200.00 5.5 2000.00
3 ITEM-C 10 300.00 0 3000.00
BASB =Base Amount TOTAL 6000.00
ADD: VAT 13.5% 135.00
MWVS = Input Vat ADD: VAT 5.5% 110.00
GRAND TOTAL 6425.00
SALE INVOICE
SL NO DESCRIPTION QTY RATE %TAX AMOUNT

1 ITEM-A 10 200.00 13.5 2000.00
2 ITEM-B 10 300.00 5.5 3000.00
3 ITEM-C 10 400.00 0 4000.00
BASB =Base Amount TOTAL 9000.00
ADD: VAT 13.5% 270.00
MWAS = Output Vat ADD: VAT 5.5% 165.00
GRAND TOTAL 9435.00
In SAP Input Vat denoted by V and Output Vat denoted by A
TOTAL OUTPUT VAT = 435.00

TOTAL INPUT VAT = 245.00
Amount Payable to Govt: = 190.00
Difference between Input Vat and Output Vat we have to pay to

the Government.
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This document has to be used as it is, without any warranty of any kind.
Prahlad Y
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TOPIC: VAT IMPLEMENTATION
1. CHECK CALCULATION PROCEDURE
PATH : FINANCIAL ACCOUTNING FINANCIAL ACCOUTNING GLOBAL

SETTINGS TAX ON PURCHASE AND SALES BASIC SETTINGS CHECK
CALCULATION PROCEDURE
TCODE: /NOBYZ
Now you will witness the following screen:-
Double click on Define Procedures and click on
Update the appropriate values
Click on
Select the Procedure
Click on and Click on
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Update the appropriate values
Click on
2. Assign County to Calculation Procedure
PATH : FINANCIAL ACCOUTNING FINANCIAL ACCOUTNING GLOBAL

SETTINGS TAX ON PURCHASE AND SALES BASIC SETTINGS ASSIGN
COUNTRY TO CALCULATION PROCEDURE
TCODE: /NOBBG
Click on and select the Country
Click on
Change the Procedure
Assign the Procedure that

you had created in the
previous step.
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and Click
3. Define Tax Codes for Sales and Purchases
Path : PATH : FINANCIAL ACCOUTNING FINANCIAL ACCOUTNING GLOBAL

SETTINGS TAX ON PURCHASE AND SALES CALCULATION DEFINE TAX
CODES FOR SALES AND PURCHASES
TCODE: /NFTXP
Let us propose the following scenario:
A Company has got to the following Tax structure:-
Tax code V stands for Input Vat and A stands for Output Vat.
Ledger Name Tax Ledger Name Tax Percentage Tax Code

Purchases @ 5% Input Vat 5% 5 V1
Purchases @ 13.5% Input Vat 13.5% 13.5 V2
Purchase Exempt 0 V0
Sales @ 5% Output Vat 5% 5 A1

Sales @ 13.5% Output Vat 13.5% 13.5 A2
Sales Exempt 0 A0
Let us configure the Tax Code:
and click on
Enter the Value A0 in the below screen
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and press
Update the following values carefully:-
Click on and you will witness the following screen:-
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Click on
Now you will find the below screen
Now change Tax code V0 and press Enter Key and update the following values
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and click on and you will find the following screen
Click on and you will witness the following screen
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Now Change the Tax Code V1
and press Enter Key and update the following values in the below screen
and click on and you will find the below screen
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Click on
Now Change the Tax Code V2 and press on Enter Key and update the following values
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and press and now you will find the following screen and update the appropriate
values :
and click on
Similarly update for A1 and A2 for Output Vat 5% and Output Vat 13.5%.
4. Assign Zero % Tax Code for non Taxable transactions

SETTINGS TAX ON PURCHASE AND SALES POSTING Assign Tax Codes
for Non-Taxable Transactions
TCODE: /NOBCL
Click on and select the Company Code
Update V0 and A0 here
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Click on
Please create the following General Ledgers. Transaction Code: /NFS00
Ledger Name Line Item Sort Key Field status group
Purchases @ 5% (P&L)* 001 G006

Purchases @ 13.5% (P&L)* 001 G006
Purchase Exempt (P&L)* 001 G006
Input Vat 5% (BS)* 001 G001
Input Vat 13.5% (BS)* 001 G001
Sales @ 5% (P&L)* 001 G029

Sales @ 13.5% (P&L)* 001 G029
Sales Exempt (P&L)* 001 G029
Output Vat 5% (BS)* 001 G001
Output Vat 13.5% (BS)* 001 G001
(BS)* = BALANCE SHEET ITEM (P&L)* = PROFIT AND LOSS A/C ITEM
After the creation of the above Ledger accounts, please come back to IMG (Tcode
/NSPRO).
6) Define Tax Accounts

SETTINGS TAX ON PURCHASE AND SALES POSTING Define Tax
Accounts
TCODE: /NOB40
Locate transaction MWS and double click on the same.
Enter the chart of Accounts
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and press
Select the Tax code check box
and Click on
and click on
Account 101202 = Output Vat 5%
Account 101203 = Output Vat 13.5%
Click on and Locate transaction for VST and double click on VST
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Now you will witness the following screen and click on Tax Code check box
Click on
Now enter the proper Tax code with Tax Accounts
Account 101200 = Input Vat 5%

Account 101201 = Input Vat 13.5%
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7) Assign Tax Codes to Purchase and Sales Accounts
For example:
Ledger Name Tax Code

Purchase Exempt A/c V0
Purchase @ 5% V1
Purchase @ 13.5% V2
Sales Exempt A/c A0
Sales @ 5% A1
Sales @ 13.5% A2
The above task will achieved by following below steps
Please type /NFS00
Select the account, for example, you can select the account Purchase Exempt and click on
and click on
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Change the appropriate Tax category and Click on
Next select ledger Purchase 5% and click on and click and change
appropriate Tax category
Click on
Kindly repeat the same procedure for V2, A0, A1, A2
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END USER:-
To test the above configuration please enter one Purchase and Sales documents
TCODE FOR PURHCASE: /NF-43
Click on and update the following values and fields carefully
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and click on and update the values
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Now click on Document / Simulate
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Now you will witness the following screen
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Click on after successfully posting you will get the following message:-
Kindly test for Sales. TCODE FOR SALE: /NF-22
Good Luck!!!!!!
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Vat Implementation

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Prahlad Y

SAP Consultant (FI/CO) Email Address: pyadake@gmail.com

SL NO DESCRIPTION QTY RATE %TAX AMOUNT

SL NO DESCRIPTION QTY RATE %TAX AMOUNT

In SAP Input Vat denoted by V and Output Vat denoted by A

TOTAL OUTPUT VAT = 435.00

Difference between Input Vat and Output Vat we have to pay to

TOPIC: VAT IMPLEMENTATION

1. CHECK CALCULATION PROCEDURE

PATH : FINANCIAL ACCOUTNING FINANCIAL ACCOUTNING GLOBAL

Now you will witness the following screen:-

Double click on Define Procedures and click on

Update the appropriate values

Select the Procedure

Click on and Click on

Update the appropriate values

2. Assign County to Calculation Procedure

PATH : FINANCIAL ACCOUTNING FINANCIAL ACCOUTNING GLOBAL

Click on and select the Country

Change the Procedure

Assign the Procedure that

3. Define Tax Codes for Sales and Purchases

Path : PATH : FINANCIAL ACCOUTNING FINANCIAL ACCOUTNING GLOBAL

Let us propose the following scenario:

A Company has got to the following Tax structure:-

Ledger Name Tax Ledger Name Tax Percentage Tax Code

Sales @ 5% Output Vat 5% 5 A1

Let us configure the Tax Code:

Enter the Value A0 in the below screen

Update the following values carefully:-

Click on and you will witness the following screen:-

Now you will find the below screen

and click on and you will find the following screen

Click on and you will witness the following screen

Now Change the Tax Code V1

and click on and you will find the below screen

4. Assign Zero % Tax Code for non Taxable transactions

Path : PATH : FINANCIAL ACCOUTNING FINANCIAL ACCOUTNING GLOBAL

Click on and select the Company Code

Update V0 and A0 here

Please create the following General Ledgers. Transaction Code: /NFS00

Ledger Name Line Item Sort Key Field status group

Purchases @ 5% (P&L)* 001 G006

Sales @ 5% (P&L)* 001 G029

6) Define Tax Accounts

Path : PATH : FINANCIAL ACCOUTNING FINANCIAL ACCOUTNING GLOBAL

Locate transaction MWS and double click on the same.

Enter the chart of Accounts

Select the Tax code check box

Now enter the proper Tax code with Tax Accounts

Account 101200 = Input Vat 5%

7) Assign Tax Codes to Purchase and Sales Accounts

Ledger Name Tax Code

The above task will achieved by following below steps

Please type /NFS00

Change the appropriate Tax category and Click on

Kindly repeat the same procedure for V2, A0, A1, A2

TCODE FOR PURHCASE: /NF-43

Click on and update the following values and fields carefully

and click on and update the values

Now click on Document / Simulate

Now you will witness the following screen

Kindly test for Sales. TCODE FOR SALE: /NF-22

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