We are implementing the tax collected at source.

We have configured the following steps:

1. Define Withholding Tax key (206C)
2. Define Withholding Tax type
3. Create the access sequence for withholding for TCS in SD

(Copy the existing access sequence J1AW and create the new access sequence)

4. Create condition types corresponding to Tax collected at Source in SD

5. Assign withholding tax types to SD condition types
6. Define withholding tax codes
7. Assign GL accounts for withholding tax types
8. Add TCS conditions in pricing procedure
9. creating non statistical new condition types and added them to the SD pricing procedure.
10.Create the account keys for non statistical condition types and assign them in the pricing
procedure.
11. assign the G/L accounts for the new account keys in VKOA.
after this when we try to post the invoice we get the error as "posting keys are missing for the
transaction JT1" (JT1 is our account key).
To solve this error we have made the configuration for this account key in OBCN and then in
OB40 but after that we are getting the error as tax code is not defined in TAXINN procedure.

Please guide if we need to create the new tax codes in FTXP for this or we need to make any
changes in tax procedure for TCS??

In India tax has to be collected at source (by the seller) from buyer on specific items like alcoholic liquor, tendu
leaves, timber, other forest produce, on mining/quarrying & scrap. Withholding tax rate or TCS rate is generally 1%

- 5% varying from product to product. We will see below process configuration for TCS on sale of affected products
by creating a provision for the same in sales pricing procedure.

1. First we will create two condition types say JTCS for charging TCS in sales order & JWTS for posting TCS
amount in FI with an offsetting entry. Here, JWTS will be 100% value of JTCS and will be posted from sales order
with accrual key say JTS.
.

2. Include JTCS & JWTS in pricing procedure after regular taxes:

3. Assign withholding tax type in customer master as under:

NOTE: Create condition records for JTCS 1% with withholding tax code T1 & JWTS 100% with tax code T1
for your key combination in VK11.
Tax collected at source entries in accounting document from sale of scrap will be as under:

Please note Extended withholding tax has to be activated for the company code and relevant FI configuration is
required before use of withholding tax in Sales.

FI Configuration is as under:

1. Define Withholding Tax Keys

After including country code (IN) in basic settings - check withholding tax countries, a key for withholding tax has
to be created. Enter official key 206C for withholding tax Tax collected at source

2. Now, define withholding tax type for invoice posting

Double-click and choose configuration for T1. Your choice of base amount & rounding rule here have to be backed
up with subsequent configuration for the same.

3. Assign condition type JTCS to withholding tax type T1.

4. Define withholding tax code in FI

Assign Withholding tax code for withholding tax type T1.

5. Further, assign withholding tax type to company code and define accounts for the same.

6.Define accounts for withholding tax to be paid over and accounts for withholding tax offsetting entry

7. Define processing key for modified net amount