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Calculation On Freight - Different Scenarios

This document discusses different scenarios for calculating freight charges and taxes in purchase orders. It explains that for Ex-Works terms, freight is typically not included in the tax base, while for FOR Destination terms, freight is added to the tax base. It provides examples of configuring SAP MM and tax procedures to either include or exclude freight from the tax calculation based on the purchase order terms. Maintaining a subtotal for freight in the pricing procedure and using a specific tax base calculation allows freight to be treated differently for taxes depending on the purchase order freight terms.

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DISHIMUKH YADAV
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321 views

Calculation On Freight - Different Scenarios

This document discusses different scenarios for calculating freight charges and taxes in purchase orders. It explains that for Ex-Works terms, freight is typically not included in the tax base, while for FOR Destination terms, freight is added to the tax base. It provides examples of configuring SAP MM and tax procedures to either include or exclude freight from the tax calculation based on the purchase order terms. Maintaining a subtotal for freight in the pricing procedure and using a specific tax base calculation allows freight to be treated differently for taxes depending on the purchase order freight terms.

Uploaded by

DISHIMUKH YADAV
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Calculation on Freight – Different Scenarios....

Jay(SAP MM / S4 HANA MM Consultant)

Calculation on Freight – Different Scenarios

Generally , Purchase Order Terms and Conditions for Freight will be a FOR Destination or Ex-
works.
1) Ex-Works, It means Buyer will pay the freight and insurance charge up to buyer
destination.
2) FOR Destination, It means Seller will pay the freight and insurance up to Buyer
destination

1. EX-Works

Case 1: PO Tax should not be calculated over freight (Normal Case)

If the freight condition type is with accrual key and no subtotal maintained against the
condition type in MM pricing,
then the condition won't be added to the net value / tax base and it won't affect the tax
calculation.

MM pricing procedure:

1
Calculation on Freight – Different Scenarios.... Jay(SAP MM / S4 HANA MM Consultant)

GST Tax Procedure

Choose, Atl.Condition Base Value : 362

Create Purchase Order

PO Qty : 10 PC Unit Price Rs. 50/Pc Net Price = 10 x 50 = Rs. 500 Freight Charge = Rs. 15

2
Calculation on Freight – Different Scenarios.... Jay(SAP MM / S4 HANA MM Consultant)

Freight value won't be added to tax base and the freight has no effect on tax.. in Normal Case,
Look at Here, Only Net Price Rs. 500 + GST 18%

Case 2: The freight value should be added to tax base, so that all taxes (CGST+ SGST & IGST) will be
calculated over the net + freight:

2.FOR DESTINATION

In this case, maintain subtotal “4” against the freight condition in PO pricing procedure and
maintain the base calculation procedure as 362 against the BASB condition in tax procedure:

3
Calculation on Freight – Different Scenarios.... Jay(SAP MM / S4 HANA MM Consultant)

GST Tax Procedure

Maintain the base calculation procedure as 362 against the BASB condition in tax procedure

Purchase Order

PO Qty : 10 PC Unit Price Rs. 50/Pc Net Price = 10 x 50 = Rs. 500 , Freight Charge = Rs. 15

4
Calculation on Freight – Different Scenarios.... Jay(SAP MM / S4 HANA MM Consultant)

Here, Freight value has been calculated to base amount.


Look Here, Freight amount added to the net price , so total Net Price 515 + GST 18%

Name : Mr. M.Jayababu


Profile : SAP MM / SAP S4 HANA MM Consultant
e-mail : [email protected]
Call/Whatsapp : +91-9014788147

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