1. Using Financials for Asia/Pacific
  2. Quantity-Based Tax Calculation for Price Adjusted Orders in Ship and Bill Flows

Quantity-Based Tax Calculation for Price Adjusted Orders in Ship and Bill Flows

You can streamline quantity-based tax calculation for the sales order adjustment lines in ship and bill flows in India.

Let's learn more about this feature.

  • What are Quantity based Taxes for India?

    In India GST Regime, there are certain goods on which the GST Compensation Cess is a fixed amount as per quantity, rather than a percentage. These taxes are configured as Quantity based Taxes in ERP Cloud.

  • What causes Quantity based Taxes to be calculated twice?

    Here are the reasons:

    • Customers set up the list price of the item to be 0 INR so that 0 INR is defaulted on SO line in first place.
    • Users change/override the unit price on the sales Order from Rs 0 to say 1000 INR or any value based on negotiation with customer.
    • When users create a shipment for this sales order and generate fiscal document, two lines are displayed in FDG with quantity updated in each of the lines.

    When the India FDG (Request Fiscal Document) in an Order to Cash cycle is run and there is a price adjustment (using price override) in the Sales Order line, the adjustment line is added as a charge component and is passed as a separate line in FDG with quantity updated in it. This causes the Quantity based Taxes to be computed twice.

  • What causes an issue in tax calculation for Quantity based Taxes?

    When the original list price of the item is updated, this additional adjusted price is stored as one of the charge components in Order Management due to which in ship and bill flows. These additional charge components are passed as separate lines in India FDG. The adjustment line is passed with same quantity as the parent line. This causes an issue in tax calculation.

  • Quantity based Taxes are not calculated twice now. Why?

    For quantity based taxes, the Fusion tax engine does not consider the quantity on the additional charge lines when executing the India Fiscal Document now. The Quantity based Tax calculation happens only on the parent line and not on the adjustment lines.

  • What has changed in Quantity based Taxes calculation?

    The GST department in an organization can calculate the Quantity based taxes (GST Compensation Cess) in a Ship and Bill flow correctly, wherever applicable. When any price adjustment is made in Sales Order, lines or any additional charges or discount is applied on the Sales order line. This helps them to get the clearance from the Tax authorities through India E-invoicing on such taxes without any error.

  • What are the limitations or considerations for this feature?

    This feature is also applicable for discounts, freight charges, and shipping charges. However, it doesn't have any impact on Percentage based tax calculation. The scope of this feature is limited for Ship and Bill flows where Tax is calculated at Shipment (India FDG).