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 line 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
