What is Central Value-added Tax and how it is configured? in sap fico

What is CENVAT (Central Value-added Tax) and how it is configured?

Anil

Before I am going to explain what is cenvat, you have to under stand the Indian tax Central Excise Duty (BED). It is called as basic excise duty. Every manufacturer is liable to pay the excise duty in various kinds namely Basic Excise Duty, Special Excise Duty, Additional Excise Duty etc.,

Just think over a product which is reached to a end user, how many manufacturing activities are done. So to reduce the tax burden of the end user, the Govt. of India introduce the MODVAT scheme which is now called CENVAT scheme.

Based on this, if any manufacturer purchased a material, which is duty paid, and if it is used for his further manufacturing activity, he can avail this as credit in his book based on the Central Excise Invoice. At the time of selling his manufactured goods, he is liable to pay the excise duty. He can adjust the credit which he has taken into his book and pay the rest. For example:

CENVAT availed at the time purchased various goods Rs.20,000 (EXcise duty alone)
CENVAT payable for his product at the time sales Rs.25,000
He will pay only Rs.5000 through cash deposit in PLA.

This customizing are in SAP CIN Module. If you are having the CIN CD, go through.

K. SUNDAR

Good Explanation. In addition to this. The CENVAT means, Tax on Value Addition on the goods manufactured according to Central Excise & Customs Act Difinition. Here the value addition means the Additional Services/Activities etc. which converts the Input in to Output, and the output is newly recognised as per the this act as Exciseble goods. Like this the discussion
is goes on for definition.

In 4.7 SAP version, there is no CIN version seperately, it is available with Standard SAP it self.

I hope Mr. Anil Gurjar's query is completely answered.

Change in Tax in sap fico

The transaction code to change your tax rate is FTXP.

It is reference to your tax codes.

Tax rates are always updated with reference to FROM DATE.

You need not specified the To Date as the current From date becomes the To Date for the earlier rate.

what is the Difference between Withholding Taxes and Extended Taxes

What is the difference between Withholding Taxes and Extended Withholding Taxes?

Please read this for the same. I have mentioned prominant difference between the two.

Withholding Tax

Classic Withholding Tax (All release)
Extended Withholding Tax (from release 4)

Difference between the two

S.No Individual Function Classic Extended
1 Withholding Tax on Outgoing payment Yes Yes
2 TDS on Incoming payment Yes
3 TDS at the time of Invoice Yes
4 TDS on partial payment Yes
5 No. of withholding tax from each document Max 1 Several
6 TDS basis
- Net amount Yes Yes
-Gross amount Yes Yes
-Tax amount x Yes
7 Rounding rule Yes
8 Cash discount consideration Yes
9 Accumulation Yes
10 Minimum/Maximum amt and exemption Yes
11 Certification Numbering Yes
12 Calculation Formula Yes Yes

SAP FI Tips by : Kapil

Withholding tax is calculated and posted to the appropriate withholding tax accounts at different stages, depending on the legal requirements in each country. As a rule, withholding tax is posted at the same time that the payment is posted, in other words the outgoing payment (Accounts Payable) or incoming payment (Accounts Receivable), is reduced by the withholding tax amount.

In certain countries, such as Brazil, the Philippines, and Spain, withholding tax can or must be posted when the invoice is posted. This means that the amount receivable or payable is reduced by the withholding tax amount.
Extended withholding tax supports both concepts.

The key concept in extended withholding tax is the distinction between withholding tax type and withholding tax code. While withholding tax types represent basic calculation rules, specific features of these rules - in particular the percentage rate -
are represented by the withholding tax code. You can define any number of withholding tax codes for a given withholding tax type.

If a particular transaction requires more than one kind of withholding tax, this is covered in the SAP System by defining more than one withholding tax type.

When entering a line item, you can enter withholding tax data for each of these withholding tax types.

SAP FI Tips by : Rahul Gupta

How To Configure Withholding Tax?

Steps for extended withholding tax :
1. Check withholding tax countries
2. Define Ex. Withholding tax types for invoice postings
3. Define Ex. Withholding tax codes
4. Formula for Ex. Withholding tax calculation
5. Assign Ex. Withholding tax types to Company code
6. Activate Ex. Withholding tax
8. Create a G/L a/C for Ex. Withholding tax
9. Define A/C for Ex. Withholding tax (DBWW)
10. Make changes in Vendor master (XK02)
11. Maintain Company Code Settings:
Path: IMG -> Logistic -> General -> Taxes on goods movement -> India -> Maintain company code settings
12. Activate country version for specific fiscal year position
Path: IMG -> FA -> -> FAGS -> Taxes on sales purchases -> Basic Setting -> India -> Activate country specific for fiscal year position