R/3 system follows two types of Taxation 1) Procedure based tax calculation (MM & FA) 2) Condition based

tax calculation (S & D) Tax on Sales/Purchases a) Basic Settings b) Calculation c) Posting Withholding Tax (Extended Withholding Tax) a) Basic Settings b) Calculation c) Company Code d) Posting Configuration Settings for Tax on Sales/Purchase: - Value Added Tax & Central

Sales Tax
a) Calculation and Basic Settings. To calculate the tax on sale/purchase following configuration Tax Procedure BACL Description Tax Codes A0 10% Output Tax A1 4% Output Tax V0 10% Input Tax V1 4% Input Tax b) Posting of Tax. For the purpose of posting of sales tax, following settings has been done. Description VAT Payable CST Payable Transaction MWAS MWAS Tax Codes A0 A1 G/L A/c. No. 150000 150001

C) Condition Types: Calculation is done basing on the condition types specified. Step 10 100 Condition Type BASB I900 From 10 To 10 A/c. Dr. I90

Withholding Tax Configuration. Tax to be deducted from Salaries, Contractors, Rent, Professionals, and Commission Paid.

Tax to be deducted on Invoice amount or on advance payment which ever is earlier. A) To define the business place from where the tax is paid B) Define Income Tax Address C) Calculation and Basic Settings. To calculate the withholding tax the following configuration Tax Type G1 G2 G3 G4 G5 G6 G7 G8 to G14 G15 to 21 Description 194C- Contractors Invoice 194C-Contractors Payment 194I Rent 194I Advance Payment 194J Professionals 194J Advance Professionals 194G Commission Surcharge on G1 to G7 Education Cess G1 to G7 Tax Code CI CA RI RA PI PA CMI SS EC Rate 2% 2% 12% 12% 5% 5% 5% 2% 2%

D) Posting of Tax. For the purpose of posting of withholding tax following configuration settings Tax Code G/L A/c. No. GL Description GTS 150002 TDS on Salaries GTC 150003 TDS on Contractors GTR 150004 TDS on Rent GTP 150005 TDS on Professionals GTR 210000 TDS Receivable E) Maintain Tax Due dates Country IN Official Receipt 192,194c, 194I, 194J No. Of Days 7777

F) Define Minimum and Maximum Amounts TAX CODE 194 194C 194I 194J MINIMUM AMT. 100000 20000 120000 20000 MAXUIMUM AMT.

G) Assign Tax Codes to Co. Code H) Define TDS Accounts ACCOUNT NO. 150006 150006 210000 ACCOUNT DESCRIPTION TDS Payable Education Cess Payable TDS Receivable

I ) Maintain Number Ranges for Challan Printing , TDS Certificates printing , Annual Returns Year 2006 From 1 TO 9999

J ) Remittance Challan preparation J_IEWT_MIGRATE SECO. K ) Withholding Tax Certificates to vendors JIINCERT_CERT L ) Annual returns to government J1IFAR EXCISE DUTY Tax on goods movement from bonded warehouse Define: excise registration no, duty applicability, cess, BED, Company code settings: Maintain excise groups challan, invoice, to post in a single step, MIGO settings Maintain series groups: Series group G0 Series Description GRP 1 2 3 Records to be maintained RG-23 (A&C) Part-I and Part II PLA Personal ledger account RG-23D Sales from depots RG-1 Production information relating to finished goods Excise registration No. 1 Full Tax 16% Tax Null Tax

To main excise indicators

Postal address of Plants Bonded warehouse

RD 12 Monthly reports, CENVAT, PLA To classify condition types. Input and out put tax procedure To maintaining GL Accounts 1) 2) 3) 4) 5) 6) 7) 8) 9) RG 23-A Rg23-C CENVAT CENVAT Offset CENVAT Suspense Personal Leger A/c CENVAT Reversal A/c 210000 211000 212000 214000 216000 217000 218000

CENVAT Clearing 213000 CENVAT On Hold 215000

Integration with MM Moment type 101-Goods Receipts 101-Goods Receipts 103-GR into Block Stock 103-GR into Block Stock 105-GR from Block Stock 105-GR from Block Stock Register 23A 23C 23A 23C 23A 23C

Vendor excise details for vendors and SSI units Excise Indicators for plants, Excise rates AED, BED Cess rate on excise duty. Maintain number ranges Co code GLOB register name PLA form J_21PLA Description PLA Ledger

Integration with SD: Indicate excise duty for customer master data KOFI Sold to party, bill to party, shift to party, payer Change customer master records pricing procedure XD02 Maintain excise indicator as full tax Maintain no ranges for excise invoice 1 2006 1 9999