Tax Code for Service Tax and VAT

[Former Member]

Dear all,

We have received invoices as mention below from Vendor.

Kindly guide whether new tax code needs to be created. Please note that i have already created Service Tax Set off 12.36% and Set off GVAT 12.50% and 2.5%.

Problem:

Vendor charged VAT & Addl VAT on Transmission Exp + Service Tax there on.

We have to take credit on both Service Tax and  VAT Paid to Vendor.

Objective

The proposed accounting Entry should be

Gas Purchase Dr	86,87,019
Gas Transmission Dr	15,23,230
Service Tas Rble Dr	1,88,271
VAT Rble Dr	15,59,778
To Vendor	1,19,58,299

Following is the invoice

quantity	Rate
917.7	10438.333	MMBTU (N)	95,79,259
Prm/Reb. Price			(10,55,555)
Mktg Margin (Qty)	200	MMBTU (N)	1,83,540
Mktg Margin Rebate			(20,225)
RLNG Trench Tpt	42.46	MMBTU (G)	15,23,230
Service Tax	12		1,82,788
ECS on Service Tx	2		3,656
Seces on Service Tax	1		1,828
A/R VAT Payble	12.5		12,99,815
A/R VAT Payble (Addl)	2.5		2,59,963
Total			1,19,58,299

[former_member222241 · Accepted solution]

Hi,

In case you have defined condition type and then you need to create new tax code and if you are making direct postings to G/L then new tax code is not required.

Regards,

Tejas

[Former Member · Accepted solution]

Dear Sir

Thanks for reply

Direct Posting is not allowed transaction will be routed through MM process.

Further, which condition type & Tax Rate to be maintained so that, Transmission Expense (Rs15,23,230) and Service Tax+Ecess+SHE (Rs1,82,788+ 3,656+ 1,828)thereon are consider for calculation of VAT in addition to Basic Value (Rs.95,79,259+ (10,55,555)+1,83,540+(20,225)).

Accounting of purchase, transmission, Set off Service Tax and Set off VAT should be done in Separate G/l.

So request to guide in some detailed manner.

Regards.

Rajan.

[pankaj_pandey2 · Accepted solution]

HI,

You have to create a seperate VAT condition for this specific scenario, as this type of VAT behaviour is different than the regular one.

Create condition adn define the step, the base for this condition type should be including base value and service tax.

You can create this value just below the service tax codnition.

Hope this would help you.

Regards

Pankaj

[Former Member · Accepted solution]

Thanks sir.

If i am not wrong than that i have to create New Condition type for Set off VAT with the t-code OBQ1 and assign in Tax procedure with t-code OBQ3???

Regards,

Rajan.

[pankaj_pandey2 · Accepted solution]

Hi,

In OBQ3 you have to assign the condition in TAXINN.

Regards

Pankaj

[Former Member · Accepted solution]

Thanks to all.

Solved the problem as under:

Created a new Tax code FV11.

Added Tax Procedure with OBQ3

Assign G/l to New Tax Code against for each condition type with OB40.