on 2012 Jan 04 1:35 PM
Hi experts..
I have one query regarding tax.
When we purchase any material at that time we pay output tax. ..which comes from configuration done on Tax on Sales and Purchases....Does W/Tax also calculated for the same as we are dealing with vendor and W/Tax is applicable to vendor when we pay any amount.
Exp...if we pay purchase material.
Entry....Invoice.
Purchase / Expense account ......DR
Output Tax....................................DR
To...Vendor accout ......................CR
In above case will WTAX comes in credit side of the entry.
Please reply
First of all correct that output tax si on sales and input tax on purchases
While doing Invoice
Good Receipt
Dr Raw Material A/c 100
Cr GRIR A/c 100
Invoice Receipt
Dr GRIR A/c 100
Dr Input Tax A/c 16
Cr Vendor A/c 110
Cr WHT A/c 6
When Payment made to Vendor
Dr Vendor A/c 110
Cr Bank A/c 110
When Payment made to Tax Authorities
Dr WHT A/c 6
Cr Bank A/c 6
There is no 2nd tax involved. Here we have only one tax ie 16
Secondly WHT 6 is not a tax, it is tax deduction at source TDS from vendor.
Srinivas
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Hi Expert,
If the vendor contains Taxes on Sales and Purchase and Withholding Tax, then you should provide the withholding Tax Code and Withholding Tax Type and select liable check box in the Vendor Master(XK02).
While posting we need to select the Tax Code, then the accounting entry as follows:
Withholding Tax will be deducted at the time of Payment to Vendor.*
Sometimes we pay advance to Vendor, then we will also deduct withholding tax, this again adjusted at the time of Invoice, the balance will be paid to vendor with deducting withholding tax*
Advance payment to Vendor
Advance to Vendor - Dr - 1,00,000/-
Withholding Tax - Cr - 5,000/-
Vendor - Cr - 95,000/-
If Invoice is for RS: 1,00,000/- (If the withholding tax amount is already deducted at the time of Advance, then it is adjusted)
Purchases A/c - Dr - 85,000/-
Input Tax A/c - Dr - 10,000/-
Withholding Tax A/c - Dr - 5,000/-
Vendor A/c - Cr - 1,00,000/-
Regards,
GK
SAP
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Hi,
You can do both Tax, like Input tax on Purchase and WHT tax deduction on invoice posting.
Dr Expense Acc
Dr Input tax
Cr Vendor
Dr WHT tax on invoice posting
When you do MIRO you select the Calculate Tax for Tax on Sales and Purchase and from WHT tax tab we select TDS deduction on invoice posting.
Regards
Arun
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Hi Vijay,
For purchasing material only output tax will apply. With Holding tax will apply for only service rendered vendors.
Regards,
Rambo
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At the time of purchase
Dr Purchase
Dr Input tax
Dr WHT
Cr Vendor
Rgds
Murali. N
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Hi Vijay,
Correction in my post : for purchasing material only input tax will apply. With Holding tax will apply only for service rendering vendors.
@ Murali,
Please confirm, as per my knowledge there is no possiblity of 2 types of taxes at a time I mean input tax and WH Tax.
In this case entry will be :
Purchase a/c Dr
Input Tax a/c Dr
Vendor a/c CR
Regards,
Rambo
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