CIN

VAT Configuration
This question has been Answered.
Uday K
Mar 13, 2012 12:08 PM
Hi SAP Experts,
Greetings to all...
I wanted to know how to configure the VAT in the system. I know that we are not supposed to ask
basic questions over here but from the past few days I have serached in sdn and couldnt find any
doc that will help me to configure the vat in the system.
Thanking you in advance,
Regards,
UK.
Correct Answer by kailas ugale on Mar 14, 2012 5:42 AM
Hi,Read SAp Note:- 822347
ymptom
Tax configuration for condition based tax procedure - TAXINN
Other terms
VAT, CIN,TAXINN, Tax Procedure, Tax Conditions
Reason and Prerequisites
Legal Change
The customers who have already made the relevant changes for VAT 2003
would only have to make the changes accordingly.
Solution
For VAT 2005, SAP recommends all customers to look into this note only.
Initial Settings:
Tax procedure for country India is "TAXINN". If you are using any other Tax procedure similar to
TAXINN , use the same in place of TAXINN in the recommended configuration settings.
Glossary
CG - Capital Goods
RM - Material other than Capital Goods
CIS - Client Independent Setting
Overview
o
o
o
A Set of New Tax condition types have been introduced for Purchase and Sales Process. These new
condition types should be used from 1st of April 2005.
o
Define the tax conditions that are currently Non deductible as VAT Non deductible . This will
enable you to address the transition to VAT at a later point of time. This would help in reporting
Taxes on Sales/Purchases for the Tax Year 2005.
For Inbound transactions five new Tax condition types have been introduced:
JVCS: A/P CST Non Deductible under VAT
JVRD: A/P VAT RM Deductible
JVRN: A/P VAT RM Non Deductible
JVCD: A/P VAT CG Deductible
JVCN: A/P VAT CG Non Deductible
Each of the condition type mentioned above should be assigned to a separate
Transaction/Account Key and a separate G/L account. This will help in the period end processing
where indvidual taxes need to be clearly identified & reported. For e.g. a separate treatment may
be required for taxes on interstate sale, that could vary from state to state.
Note: Certain settings have to be available on the production system when you start the transaction
for the Tax Year 2005. Those settings are highlighted with "TY2005" and you should capture these in
separate request.
Configuration Steps:
1. Create Tax Conditions Types for Sales/Purchases (CIS):
IMG - Financial Accounting - Financial Accounting Global Settings - Tax on Sales/Purchases Basic Settings- Check Calculation Procedure - Define Condition Types (OBQ1)
a) Create Condition Type JVCS: A/P CST Non deductible under VAT as a copy of JIPC for 'TAXINN'
Maintain Condition Category as 'D'-"Tax.
Maintain the Access sequence as 'JST1'.
b) Create Condition Type JVRD: A/P VAT RM Deductible as a copy of JIPC
Maintain Condition Category as 'D'-"Tax".Ensure the Access sequence "JST1"
c) Create Condition Type JVRN: A/P VAT RM Non-Deductible as a copy of JIPC
Maintain Condition Category as 'D'-"Tax".Ensure the Access sequence
"JST1"
d) Create Condition Type JVCD: A/P VAT CG Deductible as a copy of JIPC
"JST1"
e) Create Condition Type JVCN: A/P VAT CG Non-Deductible as a copy of JIPC
"JST1"
Note: Ensure that all the existing Condition Types used in Tax procedure TAXINN have the following
attributes. These settings are required to work without any Jurisdiction Code. These changes are
applicable from 1st April 2005. This is over and above the new condition types created. "TY2005"
Access Sequence : JST1
Condition Category : D
2. Define New Transaction Key for the new TAX Conditions:(CIS)
IMG > Financial Accounting > Financial Accounting Global Settings > Tax on Sales/Purchases >
Basic Settings > Check and Change Settings for Tax Processing (OBCN)
Akey Description
Tax Type Non Deduct Posting Ind
o JP4: A/P CST Non Deductible
2
X
3
o JP5: A/P VAT RM Deductible
2
2
o JP6: A/P VAT RM Non Deductible
2
X
3
o JP7: A/P VAT CG Deductible
2
2
o JP8: A/P VAT CG Non Deductible

2
X
3
3. Define G/L Accounts:
IMG > Financial Accounting > General Ledger Accounting > G/L Accounts Master Records > G/L
Account Creation and Processing > Edit G/L Account (Individual Processing) > Edit G/L Account
Centrally (FS00)
For SAP R/3 4.0B: IMG > Financial Accounting > General Ledger Accounting > G/L Accounts
Master Data > G/L Account Creation > One Step Manual/Automatic (Alternative 3) > Alternative
Methods to Create GL Accounts > Create GL Account Manually (FS01)
Create new Tax G/L Accounts for all new Tax transaction keys created above.
4. Define Tax Accounts:

Posting > Define Tax Accounts (OB40)
Assign appropriate G/L Accounts to the Transaction keys.
Note:The changes to the tax procedure would be applicable from 1st April 2005.
5. Change TAXINN procedure:
Basic Settings > Check Calculation Procedure > Define Procedure (OBQ3)
o
Select Procedure TAXINN.Add JVCS, JVRD,JVRN, JVCD, and JVCN in TAXINN immediately after
JIPC.
Assign Transaction/ Account Keys and Alternative Calculation type as follows

JVCS - JP4 (ST inventory - India)
JVRD - JP5 (ST setoff - India)
JVRN - JP6 (ST inventory - India)
JVCD - JP7 (ST setoff - India)
JVCN - JP8 (ST inventory - India)
New Pricing Conditions in SD.

o The following condition types have to be created.
JIVP: A/R VAT Payable
JIVC: A/R CST Payable
6. Define Condition Types:
IMG > Sales and Distribution > Basic Functions > Pricing > Pricing Control > Maintain Condition
Types (V/06)
Create Condition Type JIVP: A/R VAT Payable as a Copy of JLST & Maintainthe same attribute as
in JLST.
Create Condition Type JIVC: A/R CST Payable under VAT as a Copy of JLST & Maintain the same
attribute as in JLST.
Akey Description
o JN6: A/R VAT Payable
1
2
o JN7: A/R CST Payable under VAT
1
2

Centrally (FS00)
For SAP R/3 4.0B: IMG > Financial Accounting > General Ledger Accounting> G/L Accounts
Change SD Pricing Procedure(s): Applicable from 1st April 2005
IMG > Sales and Distribution > Basic Functions > Pricing > Pricing Control > Define and assign
Pricing Procedure > Maintain Pricing Procedure (V/08)
Select the relevant SD Procedure. Add JIVP, JIVC after JLST.
Regards
Kailas Ugale
See the answer in context
Helpful Answers by A M K, BOJJA SIVASANKAR REDDY, Bijay Kumar Barik
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Products: sap_erp_logistics_materials_management Topics: enterprise_resource_planning
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Helpful AnswerRe: VAT Configuration
A M K Mar 13, 2012 12:28 PM (in response to Uday K)

Hi,
In OBYZ we will create the condition type and include the same in the taxxinn procedure and in
SPRO-LG-Tax on Goods Mvt- India- Basic Settings-Determination of Excise Duty-main defaults
Also --> Condition-Based Excise Determination - Classify conditins (maintain your condition as
VAT)
In easy access in FV11 maintain your VAT % against the tax code created
Regards
Ayyallas
o Alert Moderator
o Like (0)
BOJJA SIVASANKAR REDDY Mar 13, 2012 12:29 PM (in response to Uday K)
hi
vat maintain at different level , what is your tax calculation procedure , taxinj or taxinn
in taxinj , you maintain at formula based it is fixed at ftxp and ftxa, and also maintain condition
records for customer tax of UTXJ Based on customer requirement , check the ovk1, ovk2, ovk3,ovk4
,
this all tax related ,
taxinn maintain the condition for each types , it is a condition based , so you maintain records at
FV11, fv11,
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o Like (0)
Bijay Kumar Barik Mar 13, 2012 1:13 PM (in response to Uday K)
Hi,
Concept behind VAT: VAT which is a sale tax behave differently as per business where some time
VAT added inventory account (we can say as non-deductable) and other side VAT can be used for
Set-Off or Receivable (We can say as Deductable).
You can have two VAT condition types namely as ZVIN (VAT inventoried) & ZVST( VAT Set-Off).
Assign NVV key to condition type ZVIN and assign ZTV key {create an accounting key ZTV in t.code:
OBCN and keep Posting indic. 2 } to condition type ZVST in tax procedure in OBYZ t.code and
assign to G/L account (VAT receivable) to ZTV accounting key in t.code: OB40.
You should have two separate tax codes(FTXP), one as VI (for VAT inventoried) and another one
VS(VAT Set-Off) .Maintain condition record in t.code: FV11 with condition types ZVIN for tax code
VI and maintain tax rate and with condition types ZVST for tax code VS and maintain tax rate.
Do transactions for each tax code for creating PO, GR and finally do invoice, you will have difference
on accounting entries in each case.
NOTE:
VAT which are inventoried will affect in MIGO transaction adding VAT amount to Inventory
Account and VAT which are Set-Off, it will affect in MIRO transaction by having VAT amount posted
to separate G/L account other then G/L for vendor, GR/IR, excise G/L(if there).
Regards,
Biju K
o Alert Moderator
o Like (0)
Correct AnswerRe: VAT Configuration
kailas ugale Mar 14, 2012 5:42 AM (in response to Uday K)

Hi,Read SAp Note:- 822347
ymptom
Tax configuration for condition based tax procedure - TAXINN
Other terms
VAT, CIN,TAXINN, Tax Procedure, Tax Conditions
Reason and Prerequisites
Legal Change
The customers who have already made the relevant changes for VAT 2003
would only have to make the changes accordingly.
Solution
For VAT 2005, SAP recommends all customers to look into this note only.
Initial Settings:
Tax procedure for country India is "TAXINN". If you are using any other Tax procedure similar to
TAXINN , use the same in place of TAXINN in the recommended configuration settings.
Glossary
CG - Capital Goods
RM - Material other than Capital Goods
CIS - Client Independent Setting
Overview
o
o
o
A Set of New Tax condition types have been introduced for Purchase and Sales Process. These new
condition types should be used from 1st of April 2005.
o
Define the tax conditions that are currently Non deductible as VAT Non deductible . This will
enable you to address the transition to VAT at a later point of time. This would help in reporting
Taxes on Sales/Purchases for the Tax Year 2005.
For Inbound transactions five new Tax condition types have been introduced:
JVCS: A/P CST Non Deductible under VAT
JVRD: A/P VAT RM Deductible
JVRN: A/P VAT RM Non Deductible
JVCD: A/P VAT CG Deductible
JVCN: A/P VAT CG Non Deductible
Each of the condition type mentioned above should be assigned to a separate
Transaction/Account Key and a separate G/L account. This will help in the period end processing
where indvidual taxes need to be clearly identified & reported. For e.g. a separate treatment may
be required for taxes on interstate sale, that could vary from state to state.
Note: Certain settings have to be available on the production system when you start the transaction
for the Tax Year 2005. Those settings are highlighted with "TY2005" and you should capture these in
separate request.
Configuration Steps:
1. Create Tax Conditions Types for Sales/Purchases (CIS):
IMG - Financial Accounting - Financial Accounting Global Settings - Tax on Sales/Purchases Basic Settings- Check Calculation Procedure - Define Condition Types (OBQ1)
a) Create Condition Type JVCS: A/P CST Non deductible under VAT as a copy of JIPC for 'TAXINN'
Maintain Condition Category as 'D'-"Tax.
Maintain the Access sequence as 'JST1'.
b) Create Condition Type JVRD: A/P VAT RM Deductible as a copy of JIPC
Maintain Condition Category as 'D'-"Tax".Ensure the Access sequence "JST1"
c) Create Condition Type JVRN: A/P VAT RM Non-Deductible as a copy of JIPC

"JST1"
d) Create Condition Type JVCD: A/P VAT CG Deductible as a copy of JIPC
"JST1"
e) Create Condition Type JVCN: A/P VAT CG Non-Deductible as a copy of JIPC
"JST1"
Note: Ensure that all the existing Condition Types used in Tax procedure TAXINN have the following
attributes. These settings are required to work without any Jurisdiction Code. These changes are
applicable from 1st April 2005. This is over and above the new condition types created. "TY2005"
Access Sequence : JST1
Condition Category : D
Akey Description
o JP4: A/P CST Non Deductible
2
X
3
o JP5: A/P VAT RM Deductible
2
2
o JP6: A/P VAT RM Non Deductible
2
X
3
o JP7: A/P VAT CG Deductible
2
2
o JP8: A/P VAT CG Non Deductible
2
X
3
Centrally (FS00)
For SAP R/3 4.0B: IMG > Financial Accounting > General Ledger Accounting > G/L Accounts
Note:The changes to the tax procedure would be applicable from 1st April 2005.
5. Change TAXINN procedure:
Basic Settings > Check Calculation Procedure > Define Procedure (OBQ3)
o
Select Procedure TAXINN.Add JVCS, JVRD,JVRN, JVCD, and JVCN in TAXINN immediately after
JIPC.
Assign Transaction/ Account Keys and Alternative Calculation type as follows

JVCS - JP4 (ST inventory - India)
JVRD - JP5 (ST setoff - India)
JVRN - JP6 (ST inventory - India)
JVCD - JP7 (ST setoff - India)

JVCN - JP8 (ST inventory - India)
New Pricing Conditions in SD.
o The following condition types have to be created.
JIVP: A/R VAT Payable
JIVC: A/R CST Payable
6. Define Condition Types:
IMG > Sales and Distribution > Basic Functions > Pricing > Pricing Control > Maintain Condition
Types (V/06)
Create Condition Type JIVP: A/R VAT Payable as a Copy of JLST & Maintainthe same attribute as
in JLST.
Create Condition Type JIVC: A/R CST Payable under VAT as a Copy of JLST & Maintain the same
attribute as in JLST.
Akey Description
o JN6: A/R VAT Payable
1
2
o JN7: A/R CST Payable under VAT
1
2
Centrally (FS00)
For SAP R/3 4.0B: IMG > Financial Accounting > General Ledger Accounting> G/L Accounts
Change SD Pricing Procedure(s): Applicable from 1st April 2005
IMG > Sales and Distribution > Basic Functions > Pricing > Pricing Control > Define and assign
Pricing Procedure > Maintain Pricing Procedure (V/08)
Select the relevant SD Procedure. Add JIVP, JIVC after JLST.
Regards
Kailas Ugale
o

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VAT Configuration

This question has been Answered.

o JP8: A/P VAT CG Non Deductible

4. Define Tax Accounts:

Assign Transaction/ Account Keys and Alternative Calculation type as follows

New Pricing Conditions in SD.

8. Define G/L Accounts:

Helpful AnswerRe: VAT Configuration

A M K Mar 13, 2012 12:28 PM (in response to Uday K)

kailas ugale Mar 14, 2012 5:42 AM (in response to Uday K)

Maintain Condition Category as 'D'-"Tax".Ensure the Access sequence

Assign Transaction/ Account Keys and Alternative Calculation type as follows

JVCD - JP7 (ST setoff - India)

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