Diffrence in customer tax classification and material tax classification

[Former Member]

hello,

I have one issue can you please help me out,

1) we are impementing the service related project in this we have to apply vat tax as12.5% on 3980 materials.

so here in customer master data in billing document tab i am maintaining UTXJ condition as 1 taxable,and

2) In material master data in sales org tab view i am maintaining the same condition as UTXJ as 1 taxable.

3) for this i have maintained access sequence as plant/tax classification for customer/tax classfication for material

and maintaoned the condition record as12.50% tax.

so it is comming rightly,

my issue is i have another 20 materials on which i have to maintain 20% vat tax,so if i dont want to maintain any condition in customer master data and material master data as

1 taxable in customer master billing do tab and material master sales org tab,directly if i a maintain access sequence as

sales org/plant/material and maintain condition record as 20% vat on this material.

is it the right procedure,if i maintain this how the FI entries will happen please guide me

[jpfriends079 · Accepted solution]

For this you can create a new TAX condition type ZVAT.

Maintain access as plant/tax classification for customer2/material tax classfication2 if you are using plant/tax classification for customer/tax classfication in UTXJ.

That is, if you are using

TAXK1 (customer tax classfication), TAXM1(Material tax classfication) are the fields of access for the first condition UTXJ

Similarly, use TAXK2, TAXM2 for in access field for the second condition ZVAT

Rest do similar configuration for ZVAT as like UTXJ.

Accordingly,

- In material master, tax classfication for materials(UTXJ for service materials this will be 1 and non service material, it will 0. Simlarly, material relevant for VAT, ZVAT will be 1 and non VAT relevant it will be 0)

- In Customer Master, tax classfication fo customer (UTXJ & ZVAT relevant customer, maintain 1 or else 0)

- Maintain condition record ZVAT.

Regards

JP

[Former Member · Accepted solution]

its very help full answer,my doubt is with out this condition also can we maintain this?

[Former Member · Accepted solution]

Hi,

Maintain different classification for Material, maintain condition records as per material wise so it determines that material.

regards,

Kiran

[jpfriends079 · Accepted solution]

Yes, you can achieve this through other way also.

Check Tax condition MWST with access sequence MWST which consists of access having condition table 2-Domestic Taxes &11-Export Taxes.

But what if case

- your tax amount goes to different G/L acc.

- your tax condition for VAT will determine based on addition information apart for plant, tax classification for customer & tax classfication, say, plant region.

Regards

JP

[Former Member · Accepted solution]

jp what you have answered it was right, you said to maintain another condition as zvat as 2 taxable,i want to do like this please guide me

already there is one condition with UTXJ 1 as taxable,i will configure in the material and customer master as 1 for all 12.5% vat tax material.

For remaining materials i will configure zvat condition as 2 taxable for remaining materials and 0 for that materials., is it the right procedure.

on this data i want to maintain access sequence as plant/ tax classification cutomer 2 / tax classfication material 2, and records as 20%.

so for all these can u guide me how to do the configs

[jpfriends079 · Accepted solution]

Use TCode OVK1 - Country & Tax Cat

Tax country	Seq.	Tax category
IN	1	UTXJ
IN	2	ZVAT

Uses Tcode OVK3 - Customer Tax Classification

UTXJ	0	Tax Exempt
UTXJ	1	Liable for Taxes
ZVAT	0	Tax Exempt
ZVAT	1	Liable for Taxes

Uses Tcode OVK3 - Material Tax Classification

UTXJ	0	No tax
UTXJ	1	Taxable
ZVAT	0	No tax
ZVAT	1	Taxable

Add ZVAT in your pricing procedure with relevant account key according to your requirement.

You TAX condition type ZVAT should carry TAXK2 & TAXM2 as access fields for Customer & Material Tax Classification, respectively.

Maintain condition record for ZVAT with relevant tax code.

Regards

JP

[Former Member · Accepted solution]

its end for the issue last doubt i have maintained the same access sequence as plant/tax classification 5/material tax classication 5, because already there are 4 condition in customer and material master data,so i have maintained as you said,its doc field was taxk5, taxm5.

so i have maintained utxj as "1" liable for tax for 3400 materials and zvat as "0" tax excempt

for remaining 100 materials utxj as "0" tax excempt and zvat as "1" liable for tax

so when ever order flows it will look in to this condition it will take for 3400 materials as 12.50% tax and for 100 materials it will take as20%.

so any other things that i have to maintained please guide me or else i will close this thread.

[jpfriends079 · Accepted solution]

Maintain Customer Tax Classification in respective Customer master.

Make sure you have maintain Condition record for

UTXJ

taxk1	taxm1	Tax Value	Tax code
1	1	12.5%	v0

And

ZVAT

taxk5	taxm5	Tax Value	Tax code
1	1	20%	v1

If you have followed the configuaration effectively, then I don't feel you will struck anyway.

Try this on DEV client & share the feeback, before closing the theard.

Regards

JP

[Former Member · Accepted solution]

Thanks a lot for every one who has helped me and thanks to JP this isuue is rightly solved.

[gomatheeswaran_palaniappa]

Hi Abdul,

Partially you are right. You can keep sales org/plant/ material pricing grp instead of material. If you maintain based on material, you may end up in maintaining huge condition records. Try to group it under material pricing group and you can use that for classifying various %.

You have to create separate tax codes for both percentages and assign it in the condition records. You can hit different G/Ls by configuring the tax code.

Regards,

P Gomatheeswaran