Understanding Tax Exemption Setup for CBS, IBS, and IS Taxes

Use the Hierarchy for Tax Exemption program (P76B011) to set up CST code and tributary class code for CBS and IBS, IS, and Regular taxes pertaining to a hierarchy based on transaction nature and other values. When you set up these details in the P76B011 program, the system stores these details in the Tax Exemptions Definition table (F76B009). When you use the P76TX002 and P76TX004 programs, or run the Sales Tax Interface (R76TX004) report, the system automatically retrieves the CST code and tributary class on the basis of transaction nature and the other combinations that exist in F76B009.

When you use the Purchase Tax Interface and Sales Tax Interface programs, the system searches for CST code and tributary class using different combinations in the F76B009 table. The system follows a specific sequence, as shown in the tables below for CBS and IBS taxes, as well as for the IS tax.

For example, for CBS and IBS taxes, the system first looks for a record that matches the combination of transaction nature, suffix transaction nature, the ShipTo address book number, fiscal classification, item, and the effective date. If a matching record is found, the system retrieves the tributary class and CST code from that record. If no record is found with this combination, the system moves to the next level of search with combination of fields marked with a ‘yes’ in the second line of the table below, which in this case means that the system searches for a combination of transaction nature, suffix transaction nature, the ShipTo address book number, item number, and the effective date, and uses values from that record if found.

The system continues searching for a matching record, moving through each level in the sequence, until it reaches the search criteria in the last row of the table.

Sl. No.	Transaction Nature	Suffix Transaction Nature	ShipTo	Fiscal Classification	Item	Effective Date
1.	Yes	Yes	Yes	Yes	Yes	Yes
2.	Yes	Yes	Yes	No	Yes	Yes
3.	Yes	Yes	Yes	Yes	No	Yes
4.	Yes	Yes	Yes	No	No	Yes
5.	Yes	Yes	No	No	Yes	Yes
6.	Yes	Yes	No	Yes	No	Yes
7.	Yes	Yes	No	No	No	Yes
8.	Yes	No	No	No	No	Yes
9.	No	No	No	Yes	No	Yes

Similarly, for the IS tax, the system searches using the combinations of values listed in the table below. As with CBS and IBS tax records, the search for IS tax record starts with the combination shown in the first row of the table and continues through each level until a matching record is found or the criteria in the last row are reached.

Sl. No.	Transaction Nature	Suffix Transaction Nature	ShipTo	Fiscal Classification	Item	Effective Date
1.	Yes	Yes	Yes	Yes	Yes	Yes
2.	Yes	Yes	Yes	No	Yes	Yes
3.	Yes	Yes	Yes	Yes	No	Yes
4.	Yes	Yes	Yes	No	No	Yes
5.	Yes	Yes	No	No	Yes	Yes
6.	Yes	Yes	No	Yes	No	Yes
7.	Yes	Yes	No	No	No	Yes
8.	Yes	No	No	No	No	Yes
9.	No	No	No	Yes	Yes	Yes
10.	No	No	No	Yes	No	Yes

For CBS and IBS, as well as for IS taxes, if the system does not find a record at any level of the search sequence as shown in the respective tables above, it displays a message to inform you of the missing setup for the order line.