• The Central Board of Direct Taxes (CBDT) has implemented TCS under section 206C of the Income-tax Act, 1961, on specified goods exceeding INR 1,000,000 (Notification S.O. 1825(E)). Affected goods include: wristwatches, art, collectibles, yachts, sunglasses, handbags, shoes, sportswear, home theatre systems, and horses for racing/polo.
  
  
• TCS of 1% will be applicable on goods whose sale value per item is INR 1,000,000 or more as per section 206C of the Income-tax Act, 1961.
  
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SAP S/4HANA Cloud Public Edition

Legal Requirement

This legal change will Collect TCS during the sales process i.e during creation of sales order, Delivery document and Billing document.

    Tax account configuration:

• 1. Create Target Tax Code for the tax procedure (0TXIN is shown as sample) via SSCUI 101016:
     
     
     
  2. Z1 is created as sample tax code.
     
     
     
     
  3. Create GL account for TCS posting via Fiori App Manage Operating G/L Accounts
     
     Note:  The TCS account GL should be Open Item Managed Tax Category should be “>” Output Tax account 
     
     
     
     
     
  4. GL account for TCS should be maintained via SSCUI 101871 based on tax code. Provide your Charts of Accounts and Transaction key JTC (shown below as sample).
     
  5. Maintain GL against the tax code created with business place
     
     
     
     
  6. When you create billing document, the TCS amount will be posted to this GL account 

   PRICING

• Condition table: 

  1. Create condition table using SSCUI 103119 as shown below.
     
     NOTE: The screenshots shown below are for reference and table number may differ in system.
     
     
     
     The technical setting is as below:
     
     
     
     
     

• Access Sequence: 

  1. Create access sequence via SSCUI 103121 with description as Tax on Luxury Goods
  2. Add the condition table created in previous step (004 is shown as sample) to the access sequence

• Condition type: 

  1. Execute SSCUI 101120 and Modify condition type JTC4
  2. Change description of condition type JTC4 to ‘TCS on Luxury Goods’
  3. Check if the item condition and Amount/Percentage checkbox are enabled, if not, enable those
  4. Assign the access sequence created in the previous step (Access Sequence shown below is a sample data, actual access sequence may differ in the system)
  5. 

• Transaction key

  1. Use accounting key ’JTC’ and maintain it against condition type JTC4 in the pricing procedure

• Pricing Procedure

  1. Set Pricing procedure via SSCUI 101117 (Z18101 is shown as sample).
  2. Enter JTC4 as the condition type and maintain the steps to derive base amount.
  3. Assign 365 Routine in column ‘Alternative Calculation of Condition Amount’ against JTC4 condition type.
     
     

• Classify Condition type

  1. Classify Condition Types for Goods and Services Tax for India for JTC4 via SSCUI 101934
  2. Create an entry with the pricing procedure (Z18101 is sample pricing procedure in current document), condition type JTC4 and condition name TCSGSAR as shown below.
     

• Maintain Condition record 

  1. Create condition record for condition type JTC4 via App Set Material Prices: Sales mentioning Tax rate as 1%.
  2. The 10 Lakhs sale consideration check will be done in the routine 365

GST, 206C, Luxury goods, watches, TCS, VA01, VL01N, VF01, JTC4, TCSGSAR, High value goods, Section 206C, TCS on luxury goods, India , KBA , FI-LOC-SD-IN , India (aka XX-CSC-IN-SD) , FI-LOC-LO-IN , India , Problem