Tax calculation on Net or Gross invoice amount.

[DHARARAJA]

Introduction:

In SAP, when we book a Vendor/Customer invoice it is up to the business requirement that how business wants to calculate the Tax amount it can be either on the gross amount or the net invoice amount.

For example in case of vendor invoice the entry for tax calculation on net amount:

Purchase A/c--- DR   (1000 Rs)

Tax A/c---- DR   (180 Rs)- Based on assumption of 18% GST

To Vendor A/c  (1180)

Alternatively, there can be another business scenario wherein the tax calculation for vendor invoice must be calculated on Gross amount:

Purchase A/c----DR   (847.46)

Tax A/c----- DR   (152.54)- Based on assumption of 18% GST

To Vendor A/c (1000 Rs)

In this blog we will see how we can suffice both the above-mentioned business requirements.

Step 1: Go to T-code: FB00.

Step 2: Click on radio button “Calculate Taxes on net amount” under Document entry tab in FB00 screen.

Step 3: Click on Change user master to save the changes made.

Step 4: Once the changes are saved an pop up message will be displayed at the bottom of the screen as “The options were entered in the user master record”

FB00 Screen

Step 5: Post Vendor invoice (T-code- FB60) and the tax amount will be calculated on net invoice amount i.e., Invoice amount=1000 +18% GST= 1180.

T-code:- FB60 Vendor Invoice screen

T-code: FB60 vendor Invoice screen

Vendor Invoice Simulation view

Vendor invoice posted with 18% GST on Net amount

In case business has a requirement to calculate tax on Gross Invoice amount.

Step 1: Go to T-code: FB00.

Step 2: Under the Document entry tab, untick the radio button “Calculate Taxes on Net Amount”

Step 3: Click on Change user master.

Step 4: Once the changes are saved an pop up message will be displayed at the bottom of the screen as “The options were entered in the user master record”

FB00 Screen

Step 5: Post Vendor invoice (T-code- FB60) and the tax amount will be calculated on gross invoice amount i.e., Gross invoice amount=1000 -18% GST= 820.

T-code:- FB60 Vendor Invoice screen

T-code: FB60 vendor Invoice screen

Vendor invoice posted with 18% GST on Gross amount

Note:

The changes made in the Transaction code “FB00” is user specific and solves very common and critical requirements.