Tax configuration for condition based tax procedure - TAXINN Other terms VAT, CIN,TAXINN, Tax Procedure, Tax

Conditions Reason and Prerequisites Legal Change The customers ho ha!e alread" made the rele!ant changes for VAT #$$% ould onl" ha!e to ma&e the changes accordingl"' Solution (or VAT #$$), *AP recommends all customers to loo& into this note onl"' Initial Settings: Tax procedure for countr" India is +TAXINN+' If "ou are using an" other Tax procedure similar to TAXINN , use the same in place of TAXINN in the recommended configuration settings' C, - Capital ,oods -. - .aterial other than Capital ,oods CI* - Client Independent *etting

Glossary Overview A *et of Ne Tax condition t"pes ha!e been introduced for Purchase and *ales Process' These ne condition t"pes should be used from /st of April #$$)' 0efine the tax conditions that are currentl" Non deductible as VAT Non deductible ' This ill enable "ou to address the transition to VAT at a later point of time' This ould help in reporting Taxes on *ales1Purchases for the Tax 2ear #$$)' (or Inbound transactions fi!e ne Tax condition t"pes ha!e been introduced3

4VC*3 A1P C*T Non 0eductible under VAT 4V-03 A1P VAT -. 0eductible 4V-N3 A1P VAT -. Non 0eductible 4VC03 A1P VAT C, 0eductible 4VCN3 A1P VAT C, Non 0eductible 5ach of the condition t"pe mentioned abo!e should be assigned to a separate Transaction1Account 6e" and a separate ,1L account' This ill help in the period end processing here ind!idual taxes need to be clearl" identified 7 reported' (or e'g' a separate treatment ma" be re8uired for taxes on interstate sale, that could !ar" from state to state'

Note: Certain settings ha!e to be a!ailable on the production s"stem hen "ou start the transaction for the Tax 2ear #$$)' Those settings are highlighted ith "TY2 !" and "ou should capture these in separate re8uest' "on#iguration Ste$s: 1. Create Tax Conditions Types for Sales/Purchases %"IS&: I., - (inancial Accounting - (inancial Accounting ,lobal *ettings - Tax on *ales1Purchases - 9asic *ettings- Chec& Calculation Procedure - 0efine Condition T"pes :;9</= a) Create Condition Type JVCS: A/P CST Non deducti le under VAT as a copy of J!PC for "TA#!NN" .aintain Condition Categor" as >0>-+Tax' .aintain the Access se8uence as >4*T/>' ) Create Condition Type JV$%: A/P VAT $& %educti le as a copy of J!PC .aintain Condition Categor" as >0>-+Tax+'5nsure the Access se8uence +4*T/+ c) Create Condition Type JV$N: A/P VAT $& Non'%educti le as a copy of J!PC .aintain Condition Categor" as >0>-+Tax+'5nsure the Access se8uence +4*T/+ d) Create Condition Type JVC%: A/P VAT C( %educti le as a copy of J!PC .aintain Condition Categor" as >0>-+Tax+'5nsure the Access se8uence +4*T/+ e) Create Condition Type JVCN: A/P VAT C( Non'%educti le as a copy of J!PC .aintain Condition Categor" as >0>-+Tax+'5nsure the Access se8uence +4*T/+ Note3 5nsure that all the existing Condition T"pes used in Tax procedure TAXINN ha!e the follo ing attributes' These settings are re8uired to or& ithout an" 4urisdiction Code' These changes are applicable from /st April #$$)' This is o!er and abo!e the ne condition t"pes created' "TY2 !" Access *e8uence 3 4*T/ Condition Categor" 3 0 ). %efine Ne* Transaction +ey for the ne* TA# Conditions:%"IS& I., ? (inancial Accounting ? (inancial Accounting ,lobal *ettings ? Tax on *ales1Purchases ? 9asic *ettings ? Chec& and Change *ettings for Tax Processing :;9CN= A&e" 0escription Tax T"pe Non 0educt Posting Ind 4P@3 A1P C*T Non 0eductible # X %

4P)3 A1P VAT -. 0eductible # # 4PA3 A1P VAT -. Non 0eductible # X % 4PB3 A1P VAT C, 0eductible # # 4PC3 A1P VAT C, Non 0eductible # X %

,. %efine (/- Accounts: I., ? (inancial Accounting ? ,eneral Ledger Accounting ? ,1L Accounts .aster -ecords ? ,1L Account Creation and Processing ? 5dit ,1L Account :Indi!idual Processing= ? 5dit ,1L Account Centrall" :(*$$= (or *AP -1% @'$93 I., ? (inancial Accounting ? ,eneral Ledger Accounting ? ,1L Accounts .aster 0ata ? ,1L Account Creation ? ;ne *tep .anual1Automatic :Alternati!e %= ? Alternati!e .ethods to Create ,L Accounts ? Create ,L Account .anuall" :(*$/= Create ne Tax ,1L Accounts for all ne Tax transaction &e"s created abo!e' .. %efine Tax Accounts: I., ? (inancial Accounting ? (inancial Accounting ,lobal *ettings ? Tax on *ales1Purchases ? Posting ? 0efine Tax Accounts :;9@$= Assign appropriate ,1L Accounts to the Transaction &e"s' Note:The 'hanges to the ta( $ro'edure would )e a$$li'a)le #rom *st +$ril 2 /. Chan0e TA#!NN procedure: I., ? (inancial Accounting ? (inancial Accounting ,lobal *ettings ? Tax on *ales1Purchases ? 9asic *ettings ? Chec& Calculation Procedure ? 0efine Procedure :;9<%= *elect Procedure TAXINN'Add 4VC*, 4V-0,4V-N, 4VC0, and 4VCN in TAXINN immediatel" after 4IPC' Assign Transaction1 Account 6e"s and Alternati!e Calculation t"pe as follo s !,

4VC* - 4P@ :*T in!entor" - India= 4V-0 - 4P) :*T setoff - India= 4V-N - 4PA :*T in!entor" - India= 4VC0 - 4PB :*T setoff - India= 4VCN - 4PC :*T in!entor" - India= New Pri'ing "onditions in S-, The follo ing condition t"pes ha!e to be created' 4IVP3 A1- VAT Pa"able 4IVC3 A1- C*T Pa"able 1. %efine Condition Types: I., ? *ales and 0istribution ? 9asic (unctions ? Pricing ? Pricing Control ? .aintain Condition T"pes :V1$A= Create Condition T"pe 4IVP3 A1- VAT Pa"able as a Cop" of 4L*T 7 .aintainthe same attribute as in 4L*T'

Create Condition T"pe 4IVC3 A1- C*T Pa"able under VAT as a Cop" of 4L*T 7 .aintain the same attribute as in 4L*T' 2. %efine Ne* Transaction +ey for the ne* TA# Conditions:%"IS& I., ? (inancial Accounting ? (inancial Accounting ,lobal *ettings ? Tax on *ales1Purchases ? 9asic *ettings ? Chec& and Change *ettings for Tax Processing :;9CN= A&e" 0escription Tax T"pe Non 0educt Posting Ind 4NA3 A1- VAT Pa"able / # 4NB3 A1- C*T Pa"able under VAT / #

3. %efine (/- Accounts: I., ? (inancial Accounting ? ,eneral Ledger Accounting ? ,1L Accounts .aster -ecords ? ,1L Account Creation and Processing ? 5dit ,1L Account :Indi!idual Processing= ? 5dit ,1L Account Centrall" :(*$$= (or *AP -1% @'$93 I., ? (inancial Accounting ? ,eneral Ledger Accounting? ,1L Accounts .aster 0ata ? ,1L Account Creation ? ;ne *tep .anual1Automatic :Alternati!e %= ? Alternati!e .ethods to Create ,L Accounts ? Create ,L Account .anuall" :(*$/= Create ne Tax ,1L Accounts for all ne Tax transaction &e"s created abo!e' 4. %efine Tax Accounts: I., ? (inancial Accounting ? (inancial Accounting ,lobal *ettings ? Tax on *ales1Purchases ? Posting ? 0efine Tax Accounts :;9@$= Assign appropriate ,1L Accounts to the Transaction &e"s' "hange S- Pri'ing Pro'edure%s&: +$$li'a)le #rom *st +$ril 2 !

I., ? *ales and 0istribution ? 9asic (unctions ? Pricing ? Pricing Control ? 0efine and assign Pricing Procedure ? .aintain Pricing Procedure :V1$C= *elect the rele!ant *0 Procedure' Add 4IVP, 4IVC after 4L*T' in NVV no need to gi!e an" ,1L