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Withholding Tax

Former Member
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Dear All,

I am in to ECC6.0 implementation. When I posted invoice, WHT has been deducted. When I made the payment, again system is cutting Tax. Could someone suggest me the possibility of mistake I did in the customization?.

Thanks in advance.

Regds

Joy

Accepted Solutions (0)

Answers (6)

Answers (6)

Former Member
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Hi,

Check your vendor master data,

Thanks,

Former Member
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Dear Joy

You need to understand the process

First of all go to Change Vendor Master Data - Withholding Tax Tab

Mention All W/tax Type and Codes for Invoice Posting and for Payment, tick liable option.

e.g. C1 for invoice and CA for payment

As per Income tax law, TDS should be deducted at the time of making payment or Booking Invoice whichever is earlier.

Now when you do payment or make advance payment through F-48, then choose only CA w/tax option, so that system will deduct tds amount at the time of Advance payment

Now when you make invoice through F-43, both C1 & CA will appear, you just remove the CA w/tax code at this time, so that system should deduct tds at the time of invoice.

Now you need to clear and adjust the advance against the invoice booked through F-54, so that the tds deducted at the time of advance payment should be reversed.

Hope it Solves

Cheers

IMK

Former Member
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Hi,

Please check vendor mastaer data.

Regards

Vijay

Former Member
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At the time of payment also, you might have selected the tax codes and that is the reason it has deducted tax at that time also.

Former Member
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Hi

We will create Withholding Tax Types and Codes both for Invoices and Payments in the configuration.

we will assign in th Vendor Master Data,while assigning just give only Withholding tax types and leave the withholding tax codes blank and select the checkbox's.

While doing Payments and Invoices , system will display all the tax types for both payments and invoices, then you can select wht taxes you want.

Never do as said above by Kanuswamy , not to select the checkBox's , as you might be knowing that which ever the Payment or Invoice comes first you have to deduct the Taxes.As Kanuswamy said , you will not be able to deduct taxes for payments.This must not be done.

Regards

Venkat

Former Member
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Hi Venkat,

Thanks for your valuable reply.

My solution is based on the following assumptions:

1. Invoice comes first and payment takes place next and

2. Mr. Joy has also required the same thing. (He posted an invoice first and made the payments next)

Thanks.

Regards,

Kannusamy S

Former Member
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Thanks for the reply.

I have removed the check from 'payment' tax type and code. And I have posted an invoice and made the payment against that invoice, now it is fine (tax is not deducted second time).

But If I want to cut tax on advance, then I have to go to Master and tick the payment tax code check.

Is there any other way:

Tick for invoice and payment is active, but system should not cut tax on payment against invoice as tax already cut at the time of invoice. As well as tax should cut at the time of down payment without going to Master and put tick.

Regds

Joy

Former Member
0 Kudos

Hi,

While creating the vendor master, you need to assign the tax types and codes for Invoice and Payment posting. Whenever, you are making Down payment (F-48), system will automatically give the tax types for the payment posting. Further, when you are booking the invoice, system will give tax type and codes for the invoice and payment posting. You need to remove the tax codes for the payment posting at this stage. By following this, you will not have to change the master. Moreover, TDS will be deducted at the time of advance payment and invoice booking.

I hope this will suffice your requirement.

Regards,

Kapil

sridevi_p
Active Contributor
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Hi,

In case of invoice, make sure that the WHT base amount for payment tax code need to be manually entered as u2018Zerou2019. If missed out, WHT will get deducted on both invoice and payment.

Regards,

Sridevi

Former Member
0 Kudos

Hi

Read my earlier post wht i said.

Create the tax types and codes.

Assign only Tax types in the Vendor Master Data,

Dont assign the tax codes(leave the tax code field blank) and

Select all the check box's.

If you are making down payment and invoices,

system displays all the tax types and you can enter the tax codes.

Suppose that the Tax is deducted at the time of Advance and also at the time of Invoice , then if you make Payment through F110 , you will be able to see that Balance amount will be paid and as well as the Tax deducted extra will be Reversed(Debited).

This tax deducted extra can be Reversed a step earlier to Payment ie at F-54, for this In the Configuration you need to follow these steps

1. Create Business Place

2.Create Section Code

3.Assign Business Place to Factory Calender (this step will be in between Business Place and Section Code creation steps)

4.Define Withholding tax type for Payments -->Select the last option Central Inv. Prop.

5.While doing Down Payment(F-48) and Invoice(MIRO,MIR7,F-43, etc) Give Business Place & Section Code

6.In F-54 , Double Click the Down Payment document and check whether the amt is displayed in Transfer Posting Column and at the Total Amount in the down and then Document SIMULATE.

Here the Tax amounts will be Debited.

Regards

Venkat

Former Member
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Hello Sridevi,

I tried to put 'Zero' in base amount against payment tax codes while booking invoice. System is not taking 'Zero' there.

Regds

Joy

Former Member
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Hi Joy,

I'll explain this issue with example.

Here you have to create 2 Withholding Tax Types and Codes.

1. Withholding Tax Type for Invoice Posting and

2. Withholding Tax Type for Payment Posting

Let us assume we have three WT Types and three WT Codes for Payment Posting.

WT Name WT Type Tax Code

1. Basic 1S C4

2. Sur Chg 2S C5

3. EdnCes 3S C6

Similarly we have 3 WT Types and 3 WT Codes for Invoice Posting

WT Name WT Type Tax Code

1. Basic S1 C1

2. Sur Chg S2 C2

3. EdnCes S3 C3

In your Vendor Master, give all the WT Tax Types (6 types) and WT codes (6 Codes)

WT Type WT Code Liable

S1 C1

S2 C2

S3 C3

1S C4

2S C5

3S C6

In liable column, put tick mark for WT code for Invoice posting (C1,C2 and C3) and remove tick marks for WT code for Payment Posting (C4, C5 and C6).

Now at the time of posting an Invoice, system calculates tax.

At the time of making payments (whether it is an ordinary payment or Advance payment), system will not calculate tax.

Hope this helps.

Regards,

Kannusamy S