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New Entry for Service Tax in SAP Business One

Former Member
0 Kudos

Hi Experts ,

Generally while applying Service Tax in AP Invoice the Whole Tax Amount + Base Amount is Credited to Vendor , this is general Scenario.

But now government has released a notification stating that several Services included in notification should pay Service tax on Ration Basis.

Example for Legal Fees :

Below entry is general Standard Entry in Sap Business One for Service tax entry

General Scenario

Suppose the Charges for Legal Is Rs.1000/-

i am creating AP Invoice Service Type document and selected the relevant "Legal Fees" ledger account and also the Service Tax Code with 12.36%

The following is the entry.

AccountDebitCredit
Vendor
1123.6
Service Tax Ecess Input2.4
Service Tax HCess Input1.2
Service Tax Input120
Legal fees1000

1123.61123.6



Now according to New Service Tax Notification the service tax for Legal Fees has to be paid fully by Service Receiver.

so the Accounting Entry should be like below

AccountDebitCredit
Vendor
1000
Service tax Paid ( Expense Account ) this is clubbed value of Cess & Hcess 123.6
Service tax Payable ( Liability Account ) this is clubbed value of Cess & Hcess
123.6
Legal Fees1000

How this can be Achieved in SAP Business One.

Awaiting Your response Experts

Krishna Vamsi

Accepted Solutions (0)

Answers (1)

Answers (1)

Former Member
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Hi Krishna,

This is very much possible is SAP Business One.

What you can do is the following:

  • For the Tax type "Service", set the rate as 12.36
  • Create a new tax type called "Service Reversal" or what ever you want to call it, map the account which has to be credited and set the rate as 12.36.
  • The formula of Service would be based on Total but the formula of the new tax type i.e. Service Reversal should be BaseAmount = -(Total)
  • Create a combination of Service and Service Reversal Tax type.
  • Create a tax code with the new combination just created (one mentioned above)
  • Use it in AP Invoice and you would get the desired result.

Thanks,

Joseph

Former Member
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Hi Joseph

I will try it in Test Database and get back to you.

Thanks for your prompt Reply

Regards

Krishna Vamsi

Former Member
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Hi Vamsi,

Have you checked this? Do you have any issues or queries on this one?

Thanks,

Joseph

Former Member
0 Kudos

Hi Vamsi,

Do you still have questions on this one?

If not, you may mark this thread as answered..

Thanks,

Joseph

Former Member
0 Kudos

Hi , this is Kasinadhan

I have checked the service tax scenario, and am getting the JE as follows

Vendor    -                1000.00 Cr

Expenses account -  1123.60 Dr

Service Tax Payable -  123.60 Cr

Here , end user need to update the total payment due manually in the AP Invoice and tax reversal calculation formula need to be applied.

I would like to know, in which way we can segregate the amount 123.60 in to service tax paid account instead of expenses account of AP Invoice Row GL account.

Regards

Kashi

kothandaraman_nagarajan
Active Contributor
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Hi,

Please create new discussion for above query.

Thanks.