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Additional Service tax line items at the time of payment

Former Member
0 Kudos

Hi friends,

Please look into the following requirement:

At the time of vendor invoice, following entry is passed:

Dr. Expenses 3000

Dr. Service Tax (ST) not accrued Due 100

Dr. Ed. Cess on ST Not accried Due 20

Dr. SHE Cess on ST Not accrued Due 10

Cr. Supplier 3130

In the normal course, at the time of payment the following entries are generated:

Dr. Suppliera/c. 3130

Cr. Bank a/c. 3130

My requirement is: at the time of payment, the service tax components debit entries should be nullified by credit entries and these three items should be debited to new accounts and the entries should be:

=========================

Dr. Suppliera/c. 3130

Dr. Service Tax (ST) 'accrued Due' 100

Dr. Ed. Cess on ST 'accrued Due' 20

Dr. SHE Cess on ST 'accrued Due' 10

Cr. Service Tax (ST) Not accrued Due 100

Cr. Ed. Cess on ST Not accried Due 20

Cr. SHE Cess on ST Not accrued Due 10

Cr. Bank a/c. 3130

==========================

The purpose of the above is to carry forward only the tax applicable to the due account at the time of paying the vendor.

These additionally created three items as 'accrued due' should be taken for adjustment against the output tax liability at the time of making the payment of tax to the Government.

I am not sure whether this is what being following as a general practice.

If this is not so, I look forward your remarks on the procedure to be followed or updation of any SAP Notes.

Full points will be awarded for eligible answers.

Regards,

Accepted Solutions (0)

Answers (2)

Answers (2)

Former Member
0 Kudos

Hi,

You can use the concept of TDS and create one code for service tax. The adv is there is no manual intervention at any point.

or

U need to pass a manual entry when you need to net off the amount. The adv here is that you need not process the entire cycle till certificate printing...

POINTS PLEASE

Cheers

Raghu

Former Member
0 Kudos

Hi,

You can use withholding taxcode with offsetting to GL.

regards

Anil

Former Member
0 Kudos

Hi..

It is not a withholding tax and is paid at the time of payment. But credit is availed.. The credit should be made in the appropriate accounts at the time of payment only. I hope I have clarified.

Regards

Former Member
0 Kudos

you would need to pass a manual entry in that case..

POINTS PLZ

Cheers

Raghu

Former Member
0 Kudos

Hi

No my friend. I do not want manual entries. In fact, at the time of payment when you click the open item invoice of the vendor, the system should pass these entries automatically.

Thanks for response.

Regards

Former Member
0 Kudos

Hi,

I know it is not withholding tax, but to serve your purpose you can use withholding tax on payment with offsetting to GL, so your entries will be

Cr. Service Tax (ST) Not accrued Due 100

Cr. Ed. Cess on ST Not accried Due 20

Cr. SHE Cess on ST Not accrued Due 10

Cr. Bank a/c. 3130

Dr. Suppliera/c. 3130

Dr. Service Tax (ST) 'accrued Due' 100

Dr. Ed. Cess on ST 'accrued Due' 20

Dr. SHE Cess on ST 'accrued Due' 10

regards

Anil.

Former Member
0 Kudos

I am not sure of your requirement completely..

But i think you meet your requirement by using the concept of Sp GL Indicator for that...

POINTS PLZ

Cheers

Raghu

Former Member
0 Kudos

Can you elaborate it further on special gl procedure ?

Regards

Former Member
0 Kudos

Dude...

I believe you know concept of Sp GL Indicator...

Try and understand if your requirement fits into the concept and the procedure...

I am not clear on your req and if you need my help.. please send across me in detail..

POINTS PLZ

Cheers

Raghu

Former Member
0 Kudos

Yes yar. I know the concept of special GL. But I fail to understand how that would be applied in the case.

My requirement is in another terms:

At the time of posting vendor invoice, the ST line items are created and is taken for input credit.

But I dont want that to be taken for credit at that time. Only at the time of payment to the vendor, the same should be credited to my 'due' account. So the line items generated at the time of invoice posting should be nullified with equal credit entries and additional credit entries for availing credit should be generated at the time of payment. This process should happen in the case of output service tax also.

The processes should generate those additional nullifying and crediting 'due' accounts manually when you select the outstanding invoice and click on it for processing.

Am I more clear to you now ? Please offer your comments. Is there any SAP Notes for coping the situation.

Regards

Former Member
0 Kudos

I think there is way to get this done for this service tax. As per legal rules, we need to pay this when the vendor has been paid. If we use FB05 transfer and clear when its paid.

regards

S

Former Member
0 Kudos

Hi Sreedevi

I am searching for some method for automatic generation and clearing of tax line items. Thanks for your response.

Former Member
0 Kudos

I am a fico user. As far I know SAP has now introduced Service Tax Availment program for CIN ver. Other than that there are no Standard Program for Service Tax utilisation.

Regards

Mukesh