You specify the valid tax types in transaction OVK1.
More than one tax type can be defined for a country by defining the sequence.
The SAP System determines the taxes automatically within pricing.
In the standard SAP R/3 System, the elements of tax calculation are
predefined (for example, tax condition type "MWST"
for taxes on sales and purchases).
Assign the plant for Tax Determination in OX10,
using the country key, the SAP System recognizes which tax type is valid for a
plant and thus which taxes are relevant when creating an SD document.
Define the Customer Taxes in OVK3, you
will maintain the tax code in Customer Master.
Define the Material Taxes in OVK4, which
will then be maintain in Material Master.
For example :-
MWST GST 0 Tax Exempt
MWST GST 1 Liable for Taxes
In this example, if both the Customer Master and Material Master Tax code is
1, Tax will be included when you create the Sales Order.
Tax Code in Customer Master / Sales Order
How can we maintain the Tax Code (Tax code - which we maintain in MWST
Condtion Records) in Customer Master or in Sales Order?
There are few points which I would like to remind you:
1) MWST is a tax condition which is applied to customer to whom we are
selling. The rate of tax is depend on various parameteres, whether is fully
liable for tax or expemted (in case of Defence Customer)
2) There are few parameteres which we apply tax condition. Whether customer
is tax liable? Whether material is tax exempted?
For example, if you are selling a goods which are free for tax to any
customer, put the Tax Indicator (at MMR as '0'). If your
material is tax liable pur the Tax Indicator (at MMR as 1). If your customer is
not liable for tax at all (like the case of Indian
Defence organisations) put the Tax Indicator (at CMR as 0) or 1 in case fully
tax liable.
3) Now, at VK11 you need to mainatain your pricning conditions with all the
combinations like:
1 0
1 1
0 1
0 0
4) While maintaining your Material Master Records or Cusotmer Master Records,
you must identify, which are tax liable and which are tax exempeted.
5) In anycase, as a SAP standard Best Practises, while processing a sales
order, you must retrieve a Tax condition record from SAP database only and not
entered Manually. Accordingly, at V/06, the MWST condition Defintions, the field
for 'Manual Entries', it would be marked as - D (Not possible to process
Manually).
Due to this setting, normally, you cannot maintain Condition tax code during
sales order processing. And in Cusotmer Master, you can only maintain Tax
Indicator and not Tax Code.
6) In case your client insists for Manual entry of Tax code during Sales
Order processing, you can change the field at point 5) above to C-Manual entry
is priority instead of D.
