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GST Configure

Hi Guys,

I may have missed some steps on how to configure GST for my Sales process.
Anyone that has inputs, please advice.

1. Setup tax types in transaction OVK1. Since the SAP pricing determines the taxes
automatically within pricing. I would also need to setup pricing in my procedure
which I will cover in the later steps.

2. Assign the plant for Tax Determination in OX10,

3. Define the Customer Taxes in OVK3, which will maintain the tax code in Customer

4. Define the Material Taxes in OVK4, which will then be maintain in Material Master.

5. Copy condition MWST to GST1.

6. Assign GST1 to pricing procedure, create/ assign new access sequence.

7. Copy account key MWS to GST.

8 Assign GL account using account Key GST, link to GL account.

Now question for my question:

1. Any steps I missed above?

2. Any steps that are wrong?

3. Assuming that the customer material combination below, GST1 should appear in
my pricing condition with 4% when customer, material = 1.

4. Anyone has a better approach in setting up GST for sales billing process?

Customer Taxes Material Taxes Rate Taxes

1 1 4%

0 0 0%

0 1 0%
1 0 0%

All feedback welcome. Thanks.

New Tax Code Setup


here are the steps for a new tax code.


obyz conditions and tax procedure

ob40 to attach gls

ftxp or fv11 depending on your needs

I Hope this helps



Hi pawan

if you do configuration like

1) create Account keys in OBCN

2) Main condition types & Tax calculation procedure in OBYZ

3) Assign procedure to country in OBBG

5) Create Tax codes in FTXP

6) create GL accounts for taxes in FS00

7) Assign Gl accounts for automatic posting in OB40

if you do all these steps the tax codes Automatically appear

i hope help full you

Hi Pavan,

Please maintain created TAX codes in OBZT then it will be appear

In MIRO header data.


T.code FTXP is used to create Tax code.

All the Taxes are divided into two categories.

Input tax: All taxes related to purchase are considered as Input tax.

Output tax: All taxes on sales come under this category. For e.g CST,service tax, VAT

T.code FTXP is used to create both input or output tax code.

Steps to create Tax code:

1. Go to T.code FTXP, and select the country for which you want to create tax [IMG - Financial
accounting - Financial accounting global settings - tax on sales/purchases - basic settings - Assign
country to calculation procedure].

2. Enter 2 digit alphanumeric code for e.g A8, 46, CC, etc.. in the field Tax code. Now SAP will ask
you to complete other additional fields such as:

description of the tax code (give a description)

define the tax type (tax code is input or output tax)

Indicator which determines that an error message should be issued if the tax amount is not
correct. It is recommended to flag this.

Eu code: Set this parameter at "1" it represents all the Sales from one EU country to another
EU country. If you do not set this parameter at "1" then all transactions with this code will be
not picked up in the ESL listing of that specific country.

The target tax code fields are used in case of deferred taxes. This is applicable for example
in France. The VAT needs to be paid for example not when the invoice is issued but when
the customer pays the VAT. There are here again special programs available in SAP for
deferred taxes.

Reporting country: this field needs to be completed when you are using the plants abroad
functionality. This means that when you as a German company have a Belgian VAT number
and you have sales in Belgium (+ you need to submit a VAT return in Belgium) , then of
course these invoices need to be booked in SAP with a Belgian tax code.

3. Now in the Menu allocate the amount where this specific tax code is used to a certain tax account.
The tax type fields such as Base Amount, Input tax, Output Tax ... can be determined via the
calculation procedures. Calculation procedures are defined in the IMG [Financial accounting -
Financial accounting global settings - tax on sales/purchases - basic settings - Assign country to
calculation procedure].

4. Account Keys.

NVV: The non deductible VAT is automatically added to the expenses account

NAV: Indicate for this key a separate account for the non deductible VAT

ESA: Output tax in case of Acquisition of EU goods

ESE: Input tax in case Acquisition of EU goodsLast but not least you also need to complete
the tax rate field.

5. Tax percentage can be maintained in two ways & that depends upon the Tax procedure that has
been followed i.e. if tax procedure is formula based then percentage can be maintained in FTXP
only, where as if the procedure is condition based then percentage has to be maintained under the
identified condition type. Create condition records using T.code FV11 to maintain the tax
percentages. Tax condition can be of two type Deductable or Non Deductable
Non deducatable: Used JVRN for Non deducatable.
For VAT, Go to FV12, select JVRN or JVRD as per our requirement .....select Tax
Classification..... maintain the % of the VAT..

Dedutable: Used JVRD for deductable.

For JVRD, Go to OB40, maintain G/L acct for JP5
GL accounts has to be assigned under OB40 for automatic posting of tax amounts.

All About Tax Determination Procedure in SAP

SAP uses Condition Method technique to calculate taxes (except Withholding Tax) in the
system. Tax Calculation Procedures (defined in the system) together with the Tax Codes
are used in calculating the amount of tax.

The Tax Code is the first step in the tax calculation procedure. The Tax code describes
following -

Tax type (Tax Type can be defined by T-code OVK1).

Amount of tax calculated / entered.

GL account for tax posting.
Calculation of additional tax.

Each country has a specific Tax Procedure defined in the standard system. A Tax
calculation procedure contains the following fields:

Steps It determine the sequence of lines within the procedure.

Condition Types Indicates how the tax calculation model will work (whether the
records are for fixed amount or percentages and whether the records can be
processed automatically.)
Reference Steps System obtains the amount/value it uses in its calculation (e.g.
the base amount).
Account/Process Keys Provide the link between the tax procedure and the GL
accounts to which tax data is to be posted. This helps in automatic tax account
assignments. To enable this automatic assignment, there is a need to define the
Posting keys (unless there is a specific requirement, it will be
sufficient to use the GL posting keys: Debit: 40, Credit: 50).
Rules to determine on which fields the account determination is to
be based (such as the tax code or country key).

Step-1 Tax Category

Tax Category is used to group and manage similar product tax rates or service tax rates.
Tax Rates are defined for each of the tax codes. The tax rates are linked to Tax Types and
are included in the tax procedures (in this relationship, it is technically possible that a
single tax code can have multiple tax rates for various tax types.) The tax code is assigned
to a Tax Procedure, which attaches to a GL master record. A specific tax procedure is
accessed whenever that GL account is used in document processing. Step-1.1

1. Enter T-code OVK3 in the command field .

2. Click on New Entries Button.


1. Enter Tax Categories ,Tax class and description.

2. Click on save button.
A Message "Data was saved " is displayed.

Step-2 Define Tax Types


1. Enter T-code - OVK1 in the command field.

2. Click on new entries button.

Step-2.2 Enter Tax country / Sequence / tax category and save the data .
Step-3 Assign the plant for Tax Determination.

1. Enter T-code OX10 in the command field.

2. Click on New entries Button.


1. Enter Plant / Name1.

2. Enter country code / city code.

Save the data.

Step-4 Define the Material Taxes.
1. Enter T-code OVK4 in the command field.
2. Click on New Entries Button.

Enter Tax category / Tax classification and description.
Save the data.

Step-5 Define the Tax Determination


1. Enter T-code VK12 in the command field.

2. Enter condition type .

Step-5.2 Select Domestic taxes.

1. Enter Country / customer tax class / material tax class.
2. Run the report.


Enter Customer Tax class/Material Tax class / amount / validity period and tax code.

Save the record.