To Auto determine VAT and Cess in Input TAX procedure

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Hi Experts,

In this blog post, I would like to explain how can we apply VAT & CESS in Purchase Order as a Input TAX Procedure. So , system will auto determine its VAT & CESS Value in PO and also in Invoice Booking, instead of manually entry in PO Pricing Procedure.

Purpose:

In Fuel products, still VAT & Cess is applicable.  In SAP we can go for Tax based condition type and use in Tax Procedure like GST Calculation.

In order to calculate VAT as per Tax Based Procedure, we need to do some configuration in TAX condition type, Access sequence, TAX Procedure.

 

Let’s have a simple example which will explain in a very easy way.

Refer below steps to create TAX based (VAT 20.20 % and CESS  4%).

1. Create New Condition Type through T-code OBQ1.
   
   
   
   1. 
      
      
      
      1. 1 Create new Condition Type named ZVT1 (VAT) as shown below.1.2 Create another Condition Type ZVTC (For Cess on VAT) as show below
      
      
      2. Create Condition Table from T-code m/03 which is based on Vendor and Material if it is not available in system. Here I want to apply VAT on Specific Vendor and Material, so created new Condition Table. 
      
      
      3. Create New Access Sequence and assign Condition Table and its Fields to it through t-code OBQ2.3.1 Assign Condition table, click on Accesses and enter Condition table to it as shown below.3.2 Assign Fields to Accesses as shown below
      
      
      4. Now Assign Condition Type to Tax Procedure using T-code (OBQ3). Here need to set From and To Step means on which Amount TAX will be calculated. Also maintain Proper Account Key, so it will hit to proper Account posting.
      
      
      5. Now, assign TAX % for the created Condition type through T-code FV11.
      
      
      6. Now, Let’s create PO having Material is like Fuel as shown below.
         

         Refer its Taxes details as shown below

         
         
      
      
      7. Now while booking Invoice through MIRO, system will automatically show VAT amount as TAX Amount.Conclusion : By doing this configuration , system will auto calculate VAT and CESS amount like GST Taxation.