Value Added Tax (VAT)

Configuration Documentation

For

Value Added Tax (VAT)

2005

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 Value Added Tax (VAT)

INDEX
Structure for Jurisdiction code (OBCO)………………………………………….03
Jurisdiction Code for TAXINJ (OBCP)……………………………………………04
Condition Types for Sales / Purchases (OBQ1)……………………………...…05
Condition Types for Sales / Purchases (OBQ1)……………………………...…06
Excise Tax condition Types (OBQ1)………………………………………...……07
Tax Processing in Accounting (OBCN)…………………………………………..08
TAXINJ procedure (OBQ3)………………………………………………………….09
TAXINJ procedure…………………………………………………………………....10
New Condition Types for SD – V/06……………………………………………....12
Pricing Procedure: ZJDEPO……………………………………………………..…13
Pricing Procedure: ZJFACT……………………………………………………..…14
SD Condition Types – V/06………………………………………………………....16
UTXJ Condition Type – V/06………………………………………………………..17
GL account for new Tax transaction keys (FS00)…………………..………….18
Customer Tax Classification - OVK3………………………………..……………20
Material Tax Classification – OVK4……………………………………………….21
Tax Codes (VAT) in UTXJ- SD ……………………………………………………..22
Tax Codes (VAT) in FTXP-MM…………………………….………..………………23
Business Places…………………………………………………………………...…24
Assign Business Places to Plants………………………………...………………25
Maintain Master Records……………………………………………………………26
Migration……………………………………………………………………………….27

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 Value Added Tax (VAT)

Delete the Structure for Jurisdiction code (OBCO)

Active Settings:

The tax procedure TAXINJ from Jurisdiction code structure at field Proc. (V_TTXD-
KALSM) is not present.

Remarks:

This is in compliance with SAP recommendation.

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 Value Added Tax (VAT)

Delete Jurisdiction Code for TAXINJ (OBCP)

Active Settings:

Jurisdiction Code for TAXINJ is deactivated.

Remarks:

This is in compliance with SAP recommendation.

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 Value Added Tax (VAT)

Define Condition Types for Sales / Purchases (OBQ1)

Active Settings:

For Inbound transactions three new Tax condition types to be introduced:

1. JIP4: A/P CST Non Deductible under VAT as a copy of JIP1.
2. JIP5: A/P VAT RM Deductible as a copy of JIP2
3. JIP6: A/P VAT RM Non Deductible as a copy of JIP3

For Outbound transactions new Tax condition type have introduced:

1. JIN6: A/R VAT Payable as a copy of JIN2

For all the above, Condition Category is maintained as “D” and the Access sequence
"MWST" is assigned.

Remarks:

The above condition types have been in place and in compliance per SAP
recommendations.

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 Value Added Tax (VAT)

Define Condition Types for Sales / Purchases (OBQ1)

Active Settings:

For Inbound transactions following conditions need to be maintained with Condition

Category „D‟ and Access Sequence MWST:

1. JIP1: A/P C Sales Tax Inv.

2. JIP2: A/P L Sales Tax Inv
3. JIP3: A/P Sales Tax setoff

For Outbound transactions following conditions need to be maintained with

Condition Category „D‟ and Access Sequence MWST:

1. JIN1: A/R Centr. Sales Tax

2. JIN2: A/R Local Sales Tax
3. JIN4: CST Surcharge
4. JIN5 : LST Surcharge

Remarks:

For all the above, Condition Category is maintained as “D” and the Access sequence
"MWST" is assigned which is in compliance with SAP recommendations.

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 Value Added Tax (VAT)

Change in Excise Tax condition Types (OBQ1)

Active Settings:

For following conditions Tax Category „D‟ & Access sequence "MWST" has to be
maintained:

1. JMO1 - A/P Excise duty for Setoff

2. JAO1 - A/P AED for Setoff
3. JSO1 - A/P SED for Setoff
4. JMO2 - A/P Excise duty for Inventory
5. JAO2 - A/P AED for Inventory
6. JSO2 - A/P SED for inventory
7. JMOD - A/R Excise Duty
8. JAED - A/R Add. Excise Duty
9. JSED - A/R Sp. Excise Duty
10. JCES - A/R CESS
11. JECS - IN A/R Education Cess
12. JEC1 - A/P Ecess for setoff
13. JEC2 - A/P Ecess for Inven

Remarks:

For all the above, Condition Category is maintained as “D” and the Access sequence
"MWST" is assigned which is in compliance with SAP recommendations.

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 Value Added Tax (VAT)

Settings for Tax Processing in Accounting (OBCN)

Active Settings:

For following transaction keys for new tax conditions to be defined.

Akey Description Tax Types Non Deduct Posting Ind.

JP4 A/P CST Non 2 X 3
Deductible
JP5 A/P VAT RM 2 2
Deductible
JP6 A/P VAT RM Non 2 X 3
Deductible
JN6 A/R VAT Payable 1 2

Remarks:

The above transaction keys have been maintained as per SAP recommendation.

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 Value Added Tax (VAT)

Change TAXINJ procedure (OBQ3)

Active Settings:

In tax procedure TAXINJ, condition types JIP4, JIP5, JIP6 have been added
immediately after JIP1, JIP2 and JIP3.
Transaction/ Account Keys and Alternative Calculation type have been assigned
as follows
1. JIP4 - JP4 and 371 (ST inventory - India)
2. JIP5 - JP5 and 370 (ST setoff - India)
3. JIP6 - JP6 and 371 (ST inventory - India)

For the sales side, conditions JIN6 have been added in TAXINJ immediately after
JIN1, JIN2, JIN4 and JIN5 conditions.
Transaction/ Account Keys and Alternative Calculation type have been assigned
as follows:
1. JIN6 - JN6

Remarks:
Above is in compliance with SAP Recommendation.

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 Value Added Tax (VAT)
The details of the TAXINJ procedure as maintained is given below:
Step Cntr CTyp Description From To Man Mdt Stat P SubTo Reqt AltCTy AltCBV ActKy Accrls
100 BASB Base Amount 962
110 Calculated call 100 652
120 Sub Total X
150 JMO1 A/P Eduty for Setoff 100 X 974 VS1
155 JAO1 A/P AED for Setoff 100 864 VS2
160 JSO1 A/P SED for Setoff 100 868 VS3
162 JEC1 A/P Eduty for Inven 150 864 VS1
165 ZMO1 A/P AED for Inventry 150 162 NVV
170 JMO2 A/P SED for inventry 100 862 NVV
175 JAO2 A/P AED E-cess Inv 100 865 NVV
180 JSO2 A/P SED for inventry 100 869 NVV
182 JEC2 A/P Ecess for Inven 170 207 865 NVV
213 Sub total for Sales Tax 120 182 363
214 LSTT TOT%LST-Fullsalestax 213 X 363 NVV
215 JIP1 A/P C Sales Tax Inv 213 371 363 NVV
216 LSTX A/P L Sales Tax Inv 213 371 363 NVV
217 JIP3 A/P Sales Tax setoff 213 221 370 363 VS5
218 LSTC SURCHARGE%-LST 216 217 NVV
219 LPTT TOT%LST(formBD/15EC 213 363 NVV
221 LPTX A/P Local Purch Tax% 213 972 363 NVV
222 ZPI3 A/PSTsetoff(BD/15EC) 213 363
223 LPTC Surcharge%-Pur.Tax 221 222 X NVV
230 ZPTX A/P Loc PurTax(Prov) 213 370 363 ZS5
231 ZUTX A/P Loc PurTax(Unrg) 213 370 363 ZS6
243 ZF31 Fm-31 ST Set off red 213 370 363 VS5
248 ZRST F31-Resale tax 213 370 363 NVV
260 JIP4 A/P CST Non deductib 213 371 363 JP4
270 JIP5 A/P VAT RM Deductibl 213 370 363 JP5
280 JIP6 A/P VAT RM Non-Deduc 213 371 363 NVV
440 ZRTU A/P RIGHT TO USE TAX 100 NVV
460 ZSER A/PService Tax Cenvt 100 ZS1
470 ZSC1 A/P Ecess on ser cvt 460 ZS2
480 JSER A/P SERVICE TAX 100 NVV
485 ZSC2 A/PEdu Cess on Serv 480 NVV
490 JSVD SERVICE TAX DEBIT 250 ESE
510 JMOD A/R Excise Duty 120 363
511 JAED A/R AED [Edu Cess] 510 X 366
512 JNED A/R N.C.C.D. 120 X 366
513 JSED A/R Sp. Excise Duty 120 X 360
514 JCES A/R Cess 120 X 352 367
515 Sub total X 352
517 JECS A/R Education Cess 515 X 352 366
518 Total of all central taxes 515 517 X 352
520 JIN1 A/R Centr. Sales Tax 518 X MW1
530 JIN2 A/R Local Sales Tax 518 MW2
532 JIN6 A/R VAT Payable 518 JN6
534 LST / VAT surch base 530 532 352
535 Subtotal 518 532

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 Value Added Tax (VAT)
540 JIN4 CST surcharge 520 520 MW3
550 JIN5 LST surcharge 534 MW3
555 ZJAS LST surcharge- Addn 534 ZAS
560 ZTT1 A/R TO Tax(incl. ST) 518 MW4
570 ZTT2 A/R TO Tax(Inc ST) 535 MW4
580 ZST1 A/R SrvTx Payable 100
590 ZST2 A/R E cess serv tax 580

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 Value Added Tax (VAT)

Active Settings:

New SD condition types to be defined for VAT with Condition Category – „D‟.

 JIN6: A/R VAT Payable

Remarks:

Above SD Condition Type are already in place in following Pricing Procedures:

ZJDEPO
ZJFACT
ZJGDN1
ZJSCRP
ZJFSPR
ZJFSRT
ZJFSP1
ZJBRAN
YJFSPR
YJGDN1
ZAHBAJ

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 Value Added Tax (VAT)
ZJDEPO:
Proc. Step Cnt Ctyp Description From To Man. Mdt Stat P SubTo Reqt AltCTy AltCBV ActKy Accrls
r
ZJDEPO 100 ZDSP Depot Selling Price X X 1 ERL
ZJDEPO 180 ZP01 Taxable Insurance 100 X 4 INS
ZJDEPO 190 ZTTR Territorial Rebate X ERL
ZJDEPO 250 ZDF1 Dep Taxable Freight X 5 602 FRT
ZJDEPO Dep Add.Taxable
255 YDF1 Frt 250 X 5 602 FRT
ZJDEPO 275 Tax Base 100 260
ZJDEPO 300 UTXJ Tax Jurisdict.Code 275 X 652
ZJDEPO 310 Sub Total 1 100 260
ZJDEPO 350 JMOD A/R Basic Excise 300 X D 355
ZJDEPO 400 JEX2 A/R Basic Excise 350 X X 2 353
ZJDEPO 550 JCES A/R Cess 100 190 X X H 359
ZJDEPO 720 JIN1 Central sales tax 275 X X X 3
ZJDEPO 740 JIN2 Local sales tax 275 X X X 3
ZJDEPO 740 JIN6 VAT Payable 275 X X X 3
ZJDEPO 760 JIN4 CST surcharge 720 720 X X X 3
ZJDEPO 770 JIN5 LST surcharge 740 740 X X X 3
ZJDEPO LST surcharge-
772 ZJAS Addn 740 740 X X X 3
ZJDEPO 775 Base Price+ST 310 772 X A
ZJDEPO 777 ZTT1 Turnover Tax 775 X X X
ZJDEPO 778 ZTT2 Turnover Tax 775 775 X X X 3
ZJDEPO 780 ZDF2 Dep Non-tax Freight 775 X X 3 602 FRT
ZJDEPO Dep Add Non-Tax
785 YDF2 Frt 780 X 3 602 FRT
ZJDEPO Dealer Purchase
790 Price 775 785 A
ZJDEPO 800 ZENT Entry tax X X 902
ZJDEPO 820 ZPDI Pre Delivery Inspect X PDI
ZJDEPO 860 ZVSC Veh service charges X VSC
ZJDEPO 870 ZVS2 Veh ser chg Year II X VS2
ZJDEPO Stock Reserve
880 ZSRA Akurdi X SR1
ZJDEPO Stock Reserve
882 ZSRC Chakan X SR2
ZJDEPO Stock Reserve
885 ZSRW Waluj X SR3
ZJDEPO 890 ZDFP Dep Freight payable X
ZJDEPO 900 ZND1 Net Dealer Price X

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 Value Added Tax (VAT)
ZJFACT:
Proc. Step Cntr CTyp Description From To Man Mdt Stat P SubTo Reqt AltCTy AltCBV ActKy Accrls
.
ZJFACT 100 ZNDP Net Dealer Price X X 1 ERL
ZJFACT 110 ZSPP Special Price X 1 ERL
ZJFACT 150 ZFHA Forwarding/ Handling X X FLH
ZJFACT 175 ZDR1 CSD Dealer Markup X 5 ERL
ZJFACT 200 Ass Value 100 175 X
ZJFACT Ass value
250 ZNCD (SED/NCCD) 200 X
ZJFACT 300 UTXJ Tax Jurisdict.Code 200 X X 652
ZJFACT 350 JMOD A/R Basic Excise X X X D 355
ZJFACT 375 Base Prices 200
ZJFACT 400 JEX2 A/R Basic Excise 350 2 353 EXD
ZJFACT 410 ZEX2 A/R Basic Excise 400 X
ZJFACT 475 Base prices + BED 375 400 X
ZJFACT 550 JCES A/R Cess 200 X X X H 959
ZJFACT 575 JCED A/R Cess 550 X 353 EXC
ZJFACT Basic Price + BED +
590 CESS 475 550
ZJFACT 600 JSED A/R Special Exc.duty 250 X X X H 959
ZJFACT 605 JNED A/R NCCD 250 X X X H 959
ZJFACT 610 JAED A/R Add. Excise duty 200 X X X H 959
ZJFACT 625 JEXS A/R SED 600 X 353 EXD
ZJFACT 630 JEXN A/R NCCD 605 X 353 EXN
ZJFACT 635 JEXA A/R AED 610 X 353 EXD
ZJFACT 640 BED 400 X
ZJFACT 641 CESS 575 X
ZJFACT Sub total of central
643 taxes 625 642 X
ZJFACT 644 JECS A/R Education Cess 643 X X X H 959
ZJFACT 645 JECX A/R Education Cess 644 353 EDC
ZJFACT 647 Basic price 375 X
ZJFACT Sub total of central
648 taxes 643 X
ZJFACT 650 Sp. Disc. For CSD 645 648 X
ZJFACT Sub Total-
653 Price+ED+Edu.cess 645 648 X
ZJFACT 655 ZCDM CSD Dealer Mark-up X 702 ERL
ZJFACT 675 Ex-Factory Price 653 655 X 3
ZJFACT 700 ZP01 Taxable Insurance 675 X 602 INS
ZJFACT 710 ZFR1 Taxable Freight X 602 FRT
ZJFACT 715 YFR1 Add. Taxable Freight 710 X 959 FRT
ZJFACT 720 JIN1 Central sales tax 675 715 X X X
ZJFACT 740 JIN2 Local sales tax 675 715 X X X
740 1 JIN6 VAT Payable 675 715 X X X
760 JIN4 CST surcharge 740 X X X
Base
Price+Excise+ST+Dis
775 count 675 770 X 6

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 Value Added Tax (VAT)
777 ZFR2 Non Taxable Freight X 602 FRT
Add. Non Taxable
779 YFR2 Fre 777 X 959 FRT
781 Copy of Ex factory 675 X
783 Taxes for Insurance 720 760 X
Non Taxable
785 ZP02 Insuranc 781 784 X 602 INS
Dealer Purchase
790 Price 775 785 X A
930 ZND1 Net Dealer Price X
940 ZVS2 Veh ser chg Year II X VS2 VS2
950 ZENT Entry tax X ENT ENT
960 ZPDI Pre Delivery Inspect X PDI PDI
970 ZFDI Factory Direct Incen X FDI FDI
980 ZDLR Dealer MarginInspect X
990 ZVSC Veh service charges X VSC VSC

Above are examples of Pricing Procedures. The complete list is available with
BAL.

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 Value Added Tax (VAT)

Maintain SD Condition Types – V/06

Activity:
All SD Cenvat Conditions like JMOD, JEX2, JECX, JAED, JEXA, JCED, JCES,
JEXS, JECS, JECX should be maintained with Condition Category „D‟.
Remarks:
Condition Types JMOD, JAED with Condition Category „1‟ has been changed to
Condition Category „D‟ and JECX, JEX2 with Condition Category „_‟ has been
changed to Condition Category „D‟.

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 Value Added Tax (VAT)

Maintain UTXJ Condition Type – V/06

Activity:
Condition Category „1‟ should be maintained with Access Sequence ZCIN.

Remarks:
Condition Category „1‟ is maintained with Access Sequence ZCIN. However
ZCIN is having same tables 909 and 910 (copy of 11 and 368) with same fields.
These tables should be marked exclusive. Currently these tables were not
marked exclusively which was now maintained as exclusive.

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 Value Added Tax (VAT)

Create GL account for new Tax transaction keys (FS00)

Active Settings:

Following new accounts are proposed to be opened after VAT is implemented.

For input credits - in current asset group

461501 VAT Receivable - Raw Material & Components

461502 VAT Receivable - Capital Goods
461503 VAT Receivable - Opening Stock
461511 VAT credit on hold - Raw Material & Components
461512 VAT credit on hold - Capital Goods
461513 VAT credit on hold - Opening Stock

Remarks:

Above GL Accounts have been activated in PRD.

For VAT reversals on non-productive use/shortages etc. - in expenses group

680211 VAT Others

For reversal of input tax credit on depot/branch transfers. - in expenses group

660921 VAT reversal on depot transfers

For the Sales tax collected we propose to continue using the same account
codes that are in use today. The list is as under.

221351 CST Current Year - Maharashtra

221352 CST Current Year - Uttar Pradesh
221353 CST Current Year - Bihar
221354 CST Current Year - West Bengal
221355 CST Current Year - Punjab
221356 CST Current Year - Haryana
221357 CST Current Year - Chandigarh
221358 CST Current Year - Rajasthan

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 Value Added Tax (VAT)
221359 CST Current Year - Assam
221360 CST Current Year - Tamilnadu
221361 CST Current Year - Jammu and Kashmir
221362 CST Current Year - Orissa
221363 CST Current Year - New Delhi

221251 LST/VAT Current Year - Maharashtra

221252 LST/VAT Current Year - Uttar Pradesh
221253 LST/VAT Current Year - Bihar
221254 LST/VAT Current Year - West Bengal
221255 LST/VAT Current Year - Punjab
221256 LST/VAT Current Year - Haryana
221257 LST/VAT Current Year - Chandigarh
221258 LST/VAT Current Year - Rajasthan
221259 LST/VAT Current Year - Assam
221260 LST/VAT Current Year - Tamilnadu
221261 LST/VAT Current Year - Jammu and Kashmir
221262 LST/VAT Current Year - Orissa
221263 LST/VAT Current Year - New Delhi

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 Value Added Tax (VAT)

Maintain Customer Tax Classification - OVK3

Active Settings:

Following Key Indicators are currently defined for Customer Tax Classification:

Indicator Description
0 Export Customer
Veh/Spares
3 Veh/Sp Part Dealer
6 Inter Div - IMS
7 Inter Div - OMS
8 Nepal / Bhutan 0%
9 Exempted Sale
A Veh/sp dlr w/o Form 'C'
G Matl/Scrap customer

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 Value Added Tax (VAT)

Maintain Material Tax Classification – OVK4

Active Settings:

Following Key Indicators are currently defined for Material Tax Classification:

Indicator Description
0 Chemical
1 Veh Taxable
I Pigment
J MH, 4% , Trading
K MH, 12.5% , Trading
L MH, 0% , Factory Part
M MH, 4% , Factory
Part
N MH, 12.5% , Factory
Part
B Agency Sale Business
Q Matl for proc srv tx

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 Value Added Tax (VAT)

Create Tax Codes in UTXJ

Activity:

Following Tax Codes have been generated for VAT in FTXP and created
condition records as below. Tax Codes have been assigned to respective GL
accounts.

REGIOPL REGIO CUSTCL MATTCL RATE TAX GL A/C

CODE
MAH MAH 3 1 100% 1A 221251 0%
MAH MAH 3 1 100% 1B 221251 12.5%
MAH MAH 3 M 100% 1C 221251 4%

Above are examples of mapping Tax Codes. The complete list is available with
BAL.

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 Value Added Tax (VAT)
MM Tax Codes:

TX RATE
JM01 JM02 JEC1 JEC2 JIP5
3P 100% 2% 12.5%
3Q 0% 100% 12.5%
3R 100% 100% 2% 2% 12.5%
4A 100% 2% 4%
4B 100% 2% 4%
4C 4%
4D 100% 2% 12.5%
4E 100% 2% 12.5%
4F 12.5%
4G 100% 2%
4H 100% 2%
4I
4J 100% 2%
4K 100% 2%
4L
4M 100% 2%
4N 100% 2% 1%
4O 1%
4P 100% 2%
4Q 100% 2%
4R
4V
4W
4X 100% 2%
4Y 100% 2% 4%
4Z 100% 2% 12.5%

Above are examples of mapping of MM related Tax Codes.

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 Value Added Tax (VAT)

Define Business Places – J_1BBRANCV

Active Settings:

Presently following Business Places are maintained:

AK01 – Akurdi
CH01 - Chakan / Akurdi
WA01 - Waluj
ZZ01 - Guwahati
ZZ02 - Sambalpur
ZZ03 - Kharagpur
ZZ04 - Faridabad
ZZ05 - Hosur
ZZ06 - Jammu
ZZ07 - Kota
ZZ08 - Patna
ZZ09 - Luknow
ZZ10 - Chandigarh
ZZ11 - Zirakpur
ZZ12 - Delhi

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 Value Added Tax (VAT)

Assign Business Places to Plants – J_1BT001WV

Active Settings:
Business Places were assigned to Plants:
Remarks:
Following Plants / Depots have been assigned to Business Places:

Business Place Plants / Depots

AK01 AK01
AK01 AK02
AK01 AK03
AK01 AK04
AK01 AK06
CH01 CH01
CH01 CH02
CH01 CH03
CH01 CH04
WA01 WA01
WA01 WA02
WA01 WA03
WA01 WA04
WA01 WA05
ZZ01 ZZ01
ZZ02 ZZ02
ZZ03 ZZ03
ZZ04 ZZ04
ZZ05 ZZ05
ZZ06 ZZ06
ZZ07 ZZ07
ZZ08 ZZ08
ZZ09 ZZ09
ZZ10 ZZ10
ZZ11 ZZ11
ZZ12 ZZ12

Maintain Master Records

Master Data Maintenance

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 Value Added Tax (VAT)
1. Customer Master Data:

 Remove Jurisdiction Code: Maintain blank field in Jurisdiction Code field for all
customers.
 Define correct Region of Customer: Ensure correct input of Customer Region.
 Define correct Customer Tax Classification: Ensure correct input of Customer
Tax Classification.
 Define TIN Number: Maintain correct TIN Number for Customers.

2. Material Master Data:

 Define correct Material Tax Classification: Ensure correct input of Material Tax
Classification.

3. Condition Records for UTXJ:

 Domestic: New condition records need to be created for the access sequence
i.e. Region of Delivering Plant / Region of Ship to Party / Customer Tax
Classification1 / Material Tax classification1 -Tax Code.

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 Value Added Tax (VAT)

Migration

Activity:

BAL have foreclosed all Purchase and Sales Orders so that smooth migration can be
availed.

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