Dear Vineeth,
Tax Code is just a two digit numeric or alphanumeric code through which we calculate taxes on materials,services etc.
A condition type is a representation in the system of some aspect of your daily pricing activities. For example, you can define a different condition type for each kind of price, discount or surcharge that occurs in your business transactions.
Tax Procedure is one where tax calculation procedure for country version and it supports condition-based excise determination is maintained(this depends for which country you are configuring the tax calculation procedure.)
In India there are two types of tax calculation procedure.
1.TAXINN-Condition Based
2.TAXINJ-Formula Based.
We create Tax code through FTXP and condition types are assigned to this tax code through T code FV11.
In Tax procedure these condition types are maintained which ultimately defines the calculation of the taxes based on your Tax code.
Configuration for Tax Code steps are
1. Maintain the Tax Procedure OBQ1
2. Maintain the Tax Processing in Accounting OBCN
3. Change View of procedure & go to control OBQ3
4. Maintain the Tax Code FTXP
5. Changing in GL Master for assign TAX Code FS00
6. GL assign to Maintain Configuration for automatic posting OB40
7. Make your posting with Tax Code.
For Example if suppose i have to make a Tax code EM for Service tax12.36(Deductible).
Then first i will make Tax code through FTXP(Considering that condition types and calculation procedure has been configured already).
After that i will assign the condition types to tax code EM through T code FV11.
JSVD-12%
JEC3-2%
JES3-1%
This is how it works.
For more detail about tax code you can search forum where you will get many documents on this.
I am giving one link below kindly have a look.
Configuration of Tax Calculation Procedure TAXINN - India - SAP Library
Hope this will help you.
Regards
Eugene