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

Streamline quantity-based tax calculation for the sales order adjustment lines in ship and bill flows in 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. Today, while executing India FDG (Request Fiscal Document) in an Order to Cash cycle, when there is a price adjustment (using price override) in the Sales Order line due to which the adjustment line is added as a charge component and is passed as separate line in FDG with quantity updated in it. This is causing the Quantity based taxes to be computed twice.

Common use case is that the customers have setup the list price of the item to be 0 INR so that 0 INR is defaulted on SO line in first place. User will change/override the unit price on the sales Order from Rs 0 to say 1000 INR or any value based on negotiation with customer. Now when they create shipment for this sales order and generate fiscal document, two lines are displayed in FDG with quantity updated in each of the lines. Due to this, the quantity based tax rates are calculated twice.

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 & bill flows, the additional charge component is passed as separate lines in India FDG. Also the adjustment line is passed with same quantity as the parent line. This is causing issue in tax calculation for quantity based taxes.

This feature ensures that for quantity based taxes, the Fusion tax engine does not consider the quantity on the additional charge lines while executing the India Fiscal Document. The Quantity based Tax calculation happens only on the parent line and not on the adjustment lines.

Business benefit:

This feature helps the GST department in an organization to correctly calculate the Quantity based taxes (GST Compensation Cess) in a Ship and Bill flow, 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, helping them to get the clearance from the Tax authorities through India E-invoicing on such taxes without any error.

Steps to Enable

You don't need to do anything to enable this feature.

Tips And Considerations

  1. This feature is also applicable for Discounts, freight charges, Shipping charges etc.
  2. This feature does not have any impact on Percentage based tax calculation.
  3. The scope of this feature is limited for Ship and Bill flows where Tax is calculated at Shipment (India FDG). 

Key Resources