How to expense/ Inventorise VAT at GR

[Former Member]

My client is the final consumer of goods and services enjoyed. They pay VAT on purchases which is input tax to them , since they are the final consumers of these goods and services so to them VAT is a cost  . How ever at the end of the financial reporting they want a report to show total amount of VAT incurred during the year but is the system the want to treat VAT as an expense. The accounting required are as flollows

PO

    PRICE = 85

    VAT =     15

    T0TAL    100

(VAT must be shown clearly in the PO as required by the law)

1. Goods receipt

    Dr stock/expense          100

    CR gr/ir                         100

2. invoice posting

    DR gr/ir                         100

    CR  Vendor                   100

the tax amount  15 must be a statistical figure for reporting only. Kindly advise

[BijayKumarBarik · Accepted solution]

Hi,

You want VAT amount to added- you need to have MM pricing procedure(M/08) and a Tax procedure(OBYZ). In Tax procedure, you can keep assigning NVV key  to VAT condition type. For more refer

Regards,

Biju K

[Former Member · Accepted solution]

Thanks Bijay

i am getting closer, one last hurdle

i have successfully done all the settings as per your guidance, these are the results i got

PO TOTAL 115     

PRICE       100

VAT            15

1.     GR: DR STOCK 115

               CR GR/IR   115 (THIS IS PERFECT)

2. INVOICE:  DR GR/IR       115    (THIS IS PERFECT)

                    CR  VENDOR  115    (THIS IS PERFECT)

                    DR  TAX           7.5   (WRONG)

                     CR   STOCK     7.5    (WRONG)

The two lags at the bottom are categorically wrong, i would like to have it end where vendor is credited with 115 and GR/IR 115.

THANKS

[BijayKumarBarik · Accepted solution]

Hi,

During MIRO for your purchase order- are you entering correct VAT tax code which was available in your PO?

All looks OK

1. PO with pricing elements details

2. GR document with accounting entries

I am not sure- how your system bring Tax 7.5 with debit and credit entries.

Can you share screens details :-

1. PO with Conditions TAB

2. PO with VAT condition details

3. Tax procedure with VAT condition type placing

4. MM procedure

5. MIRO  with tax code details

Regards,

Biju K

[Prasoon]

Hi,

   The scenario is exactly a non-deductible tax scenario. Ensure the following:

1. Maintain account key as NVV in the tax procedure against the tax condition type.

2. Ensure "non deductible" flag is maintained against the account key in OBCN.

3. Create a new tax code in FTXP.

4. Maintain condition record in FV11.

5. Create a new PO with the new tax code and check the tax calculation in taxes tab - check whether any other deductible taxes are triggered.

6. Do GR for the item and check the accounting entries.

7. Do IR for the item and ensure that the same tax code is maintained in the invoice item level and header level.

8. Flag the "calculate tax" check box in MIRO.

9. Post the invoice and check the accounting entries - with the transaction keys.

    Revert back with screenshots in case any clarification required.

Regards,

AKPT

[timbown]

in FV11, I am guessing you have split the tax 50% deductible and 50% non-deductible. Hence it is putting half of the tax to expense and half to tax account