(IND) Set up sales taxes for multiple taxation transactions [AX 2012]

Updated: July 20, 2012

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2

To post a purchase transaction or sales transaction that has multiple taxes, you must activate the tax features of the tax types, such as excise and customs, in the General ledger parameters form. Then, you can set up a combination of sales taxes to use for a transaction that has multiple taxes.

Use the General ledger parameters form to activate sales taxes for India.

  1. Click General ledger > Setup > General ledger parameters.

  2. Click Sales tax.

  3. In the Apply India taxes field group, select all the check boxes to activate the tax features for India.

    When multiple taxes are levied on a purchase transaction or sales transaction, the combination of taxes might differ. The combinations of sales tax and other taxes are as follows:

    • Excise + Central sales tax

    • Service tax + Central sales tax

Use the Legal entities and Manage addresses forms to set up a combination of sales taxes.

  1. Click Organization administration > Setup > Organization > Legal entities.

  2. Select a legal entity.

  3. Click the Tax registration FastTab, and then enter the tax registration number for sales tax.

  4. Click the Tax information FastTab, and then enter information about the permanent account number (PAN) and withholding tax.

  5. Click Taxes to open the Manage addresses form, and then click the Tax information FastTab.

  6. Click Add to open the Manage tax information form, and then enter the following types of taxes:

    • Excise tax

    • Customs tax

    • Service tax

    • Sales tax

    • Value-added tax (VAT)

    • Withholding tax

You create a purchase order for a vendor. The purchase order has an amount of 9,000.00 and a maximum retail price, or credit, of 6,000.00. The maximum retail price was originally 9,000.00 but was changed to 6,000.00. The purchase order was updated with the changed amount.

The purchase order has both excise tax and sales tax.

The following table shows the tax details and the formula that is used to calculate each tax component.

Sales tax group or item sales tax group

Tax component

Percentage

Formula

MRP amount

BED (Basic Excise Duty)

10

Maximum retail price

AED (Additional Excise Duty)

10

Maximum retail price

Excise surcharge

5

Maximum retail price + BED + AED

PE Cess (Primary Education Cess)

1

Excluding line amount + Excise surcharge

SHE Cess (Secondary and Higher Education Cess)

1

Excluding line amount + Excise surcharge

LST (Local Sales Tax)

4

Maximum retail price amount + BED + AED + Excise surcharge + PE Cess + SHE Cess

The base amount is calculated by using the following formula:

Original amount = Maximum retail price - (BED + AED + Excise surcharge + PE Cess + SHE Cess + LST)

Therefore, the basis that is used to calculate tax is 4,574.40.

The tax amount for each tax component is calculated as follows:

  • BED: 4,574.40 * .10 = 457.44

  • AED: 4,574.40 * .10 = 457.44

  • Excise surcharge = (4,574.40 + 457.44 + 457.44) * .05 = 274.46

  • PE Cess: 274.46 * .01 = 2.74

  • SHE Cess: 274.46 * .01 = 2.74

  • LST: 4,574.40 + 457.44 + 457.44 + 274.46 + 2.74 + 2.74 = 5,769.22 * .04 = 230.77

Therefore, the total tax is 1,425.60.

NoteNote

In the Formula designer form, the Price incl. tax check box must be selected for each taxable basis. The taxable basis is the maximum retail price excluding the line amount.


Announcements: To see known issues and recent fixes, use Issue search in Microsoft Dynamics Lifecycle Services (LCS).

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