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Reply from Suryam SL on Jul 6 at 11:20 AM Dear SAP friends,
This has to be tackled in two steps:
(a) That part of service tax which is charged by Vendor (Service
Provider) and is payable to Vendor, then, suitable Input tax codes have to
be
created in Tax Procedure (Transaction FTXP)
(b) That part of Service Tax which is to be directly paid by Service
Receiver is to be addressed by creating Withholding Tax Types and
Withholding Tax Codes - Path - SPRO - Financial Accounting - Global
Settings - Withholding Tax - Extended Withholding Tax - Withholding Tax
types
(Ideally that part of the service tax to be directly paid by Service
Receiver - withholding tax type to be created in "Payment" processing
instead of "Invoice processing"). Reason for this, that portion of service
tax to be paid by Service Receiver will be available for Service Tax credit
only upon payment to Service Provider (the base value of service) AND
remittance to Govt (service tax amount)
The accounting entries would be as under:
(1) At the time of creation of Vendor Invoice
Debit Relevant Service Expense (Conveyance Expenses if the service is
renting of Motor vehicle) (value of service)
Debit Service Tax credit availed accoun (to be utilised in J2IUN at the
time of discharge of Excise Duty liability)
Credit Vendor Account (Base value of service plus the portion of Service
tax to be paid by Vendor) minus IT TDS deudcted at source
Credit IT deduction at source (since the service is taxable under IT law)
(2) At the time of payment to Vendor
Debit Vendor with the net amount payable as per (1) above
Debit Service Tax credit availed accont (portion of service tax to be paid
by Service Receiver)
Credit Service Tax payable account (one can create separate GL accounts for
each type of Service under Reverse Tax mechanism)
Credit Bank Account
(3) At the time of discharge of Service Tax Liability
Debit Service Tax payable account
Credit Bank Account
Regards
Suri
| | | ---------------Original Message---------------
From: Sandeep Jain
Sent: Thursday, July 05, 2012 3:23 AM
Subject: Service Tax Configuration
Dear friends,
Please advise how to configure.
Sandeep |
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