CHECK AND CHANGE SETTINGS FOR TAX PROCESSING:

In this step we have to define the process keys or account keys. These account keys or process keys are used to determine general ledger accounts and posting keys for tax line items. SAP advice not to change the keys and use the defaulted keys only. If you want to change the account keys copy down the defaulted keys and change the name of the account keys and used for your project.

For this project we are using the processing keys or account keys as under:

I10: excise duty paid O10: excise duty payable I11: edu.cess paid O11: edu.cess payable I12: vat paid O12: vat payable

With the help of the above keys the system will credit the respective amounts in determined accounts either as debit or credit.

Define the calculation procedure for the country:

Path: spro>ref.img>financial accounting>financial accounting global settings>tax on sales and purchases>check calculation procedure>define procedure.

Select new procedure,

Define 4character procedure and description and keep the cursor on the procedure double click on control data button (in the left side of the dialogue structure box)

Select new entries button. Give the table contents with the condition types and respective process keys.

Define the input tax conditions step 10 base amounts. This is the base amount to calculate the excise duty

2. Educational cess is to be collected on excise duty hence in step 20:

condition key I201 base value for calculating the edu cess is excise duty, hence made as from 20 to 20 in the column

Like the way we have to define for all types of taxes and also the account keys in the extreme right of the screen (not visible in the screen).

Figure 67a

Figure 67b

Now the calculation procedure for your country is ready for use. To make account for the same to our customization we have to assign the same to country. TC: OBBG

The next important step in the configuration of taxes is defining tax codes:

path: spro>rimg>financial accounting>financial accounting global settings,>tax on sales and purchases>calculation>define tax codes: TC:

FTXP

Give country name

Give tax code: 2 character name:I0 (input tax with 0%) Description.:0% tax for input tax and continue

Figure 68a

In the next screen give all input tax as all zero and keep the cursor on output column and click on deactivate line button and save. The system creates the I0 tax.

Figure 68b

Repeat the same process for all output tax codes also Output tax code: o0 (o zero)

Output tax code o1 (excise duty payable educes payable+vat)

While creating out tax codes give tax rates in output tax column and keep the cursor on input column and select the deactivate line and save . Accordingly now for this project we have created 4 tax codes as per the requirement

Tax procedure: requirement of general ledger accounts:

To take of about the automatic determination of tax amounts we need to define accounts for tax.

In put tax accounts:

1. Excise duty paid 2. Educational cess paid . 3. Vat paid account

As asset group and allowed only input tax Out put tax accounts:

1. Excise duty payable 2. Educational cess paid 3. Vat paid account

As liability group and allowed only output tax

Change the tax options in the tax relevant accounts: means that these accounts are subject to levy of taxes.

Purchases account and accounts payable ac : allowed only input tax Sales revenue account and accounts receivable : allowed only output tax We need not to define any adjustments in respect of no tax accounts.

These accounts do not attract any taxes at any time. Hence these accounts are called as no tax accounts.

To post the interest the prerequisites:

1. Post the loan transaction in old date (with value date also old data) 2. Automatic determination of accounts for interest. Path:

spro>rimg>fa>fags>tax on sales and purchases posting TC: OB40.

Select the process key what we have defined Select the tax code check box and save

Give the tax and gl accounts as mentioned in the figure and save.

NOTE: for input tax only vat paid account will be displayed because we have given the posting indicator as 2(separate line item for that only) rest of the input tax account keys having indicator as 3(distribute to respective expenses/revenues)

Figure 69

Like the way we have to give accounts for all output tax codes also.

Execution of Interest: F.24

To post the interest select post interest settlement of transactions and update the master record. Execute. System creates batch input session RFDUZI00.

Execute the programme in sm 35.

Business scenario: satya info tech is having branches in USA and Germany also. The company is following group company code currency is $usd. And all the branches are using the same chart of accounts.

How you will configure the Business process for USA and Germany and India. And also Group Company results in us dollars.

Solution:

1. Since the satya info tech is following group concept. We have to define the Group chart of accounts maintaining language is English. While defining the chart of accounts for individual company we will assign

the group chart of accounts. And assign the each general ledger account to group account.( we can assign any number of accounts to one group account)

2. We will define one of the additional local currency is group currency i.e. Us dollars.

3. We will define country specific chart of accounts to meet the requirement of countries and assign it company code along with the operative chart of accounts. Then the system prompts the account number while creating the accounts in operative chart of accounts.

4. Give the account number in alternative account no field of the gl master record. However, we have to assign the account numbers in 1:1 ratio only.

5. If you do this functionality, the rest of reporting can be taken by the system.