Posting of Rental condition after TDS and Service Tax calculation in SAP RE-Fx

[Former Member]

Hi Experts,

Currently, in one of my Retail SAP RE-Fx implementation the client is oeprating on commercial Lease-in contracts. The rent which is paid out to the landlords (vendors) is as shown in the given example:

Fixed rent paid towards a store:

Fixed Rent (base amount)	25000	INR
Service tax@12.36%on 25000	3090	INR
Total	28090	INR

Landlord raises the invoice for the amount of Rs 28090 & is sent to my client twoards rent payment.

The client receives the invoice & pays the rent accordingly.

Post payment of rent, the books of accounts entered by the client in its books are as follows:

	Dr	Cr
Exepnse A/c	28090
To landlord A/c		25590*
To TDS A/c		2500

* Calculation of credit amount to Landlord:

Header 1	Header 2
10% TDS on 25000	25000*10%
	= 2500 INR
Vendor amount Credit	28090-2500
	= 25590

Since both the Service Tax and TDS is applicable on the rent paid by the client to its landlords; how can this scenario be built in RE-FX module?

Thanks

Shantanu Kar

[former_member196871]

Hi Shantanu,

It is a standard case which can be dealt with in SAP RE-FX easily. Refer the below steps.

• Maintain relevant settings at "Flexible Real Estate Management (RE-FX)-> Accounting -> Automatically Generated Accounting Documents -> Taxes"
• Maintain relevant settings at "Flexible Real Estate Management (RE-FX)-> Accounting -> Integration FI-GL, FI-AR, FI-AP -> Taxes"
• Maintain the relevant 'Tax Type' and 'Tax Group' as defined in the above configurations at the contract-posting parameters tab.
• Maintain the relevant withholding tax information at the contract.
• Please make sure that the witholding tax code used is applicable on the NET Amount and not the GROSS amount at the path "Financial Accounting (New) -> Financial Accounting Global Settings (New) -> Withholding Tax -> Extended Withholding Tax -> Calculation -> Withholding Tax Type -> Define Withholding Tax Type for Invoice Posting

Regds,

Hardik Sharma

[Former Member]

Hi Hardik,

I tried your proposed solution but still when I excute RERAPP, I'm seeing only service tax being deducted & no TDS being calculated.

As per the SAP Note (Note# 1268756) I explored,

1268756 - REFX-India : Section Code for TDS in ERP 602 and 603

I saw some BADi implementation to populate the section code in Business Entity transaction which will capture withholding tax. Right now the client is working on EHP 613 & hence all the note details are available in EHP 613.

I've checked all the screen sequence & field group settings in for the field Section Field (Technical field: SECCO) & everything is in place. I'm able to see the section code field in the table VIBDBE but not able to populate the field in REBDBE transaction code.

Please assist how do I populate the "Section Code" field in the transaction REBDBE? so that I can maintain the Withholding Tax?

Thanks

Shantanu Kar

[Former Member]

Dear Shantanu,

To get Business Place & Section Code fields in your master data, you need to activate country specific settings in REFX.

Goto SPRO->REFX->Country specific settings, Add country 'IN' and select check box 'Activate'.

Try this.

Rgds,

Srini

[Former Member]

Hi Srinivas,

Thanks for the reply. This has helped to populate the Section Code & Business Place fields in t-code REBDBE.

However, I'm unable to calculate the Withholding tax in Lease-In contracts.

Please assist.

Thanks

Shantanu Kar

[Former Member]

Hi Srinivas,

Can you please tell me how the service tax will get calculated in rental conditions?

I've made the following configuration settings:

Step1: RE-Fx>> Accounting>> Automatically Generated Accounting Documents>> Summarize Documents:

Under this node>> Set Item Summarization "Active" for the particular co. code.

Step 2: Defined service tax under "Tax Type" for country INDIA

Step3: Under the IMG node:

RE-Fx>> Accounting>> Integration FI-GL, FI-AR, FI-AP>> Assign Tax Code:

I've maintained Service Tax (tax type) to the country IN.

Also in the contract under posting parameters tab; i've maintained the Tax Type as Service Tax.

In conditions tab also, when I'm simulating the condition, I'm getting the correct entries, (as shown in the screen shot):

Condition Amount: 20,0000 INR

Net Cnd Crrncy: 20,000 INR (for the month of July)

Tax Cnd Crrncy: 2472 INR.

However, when I'm doing RERAPP; i'm unable to post the condition. Getting the 2 errors (screen shot attached):

1) Tax code S2 does not exist in company code E500

2) Taxes by item is activated; consequently, transfer by item is mandatory

Kindly pl. assist where I'm going worng or any configuration missing due to which I'm unable to execute RERAPP for a condition (with service tax calcultaion) for a commercial lease in contract.

Thanks

Shantanu Kar

[Former Member]

For charging withholding tax ensure two steps:

1. Withholding tax type/ code entered in the vendor master and marked as liable

2. Withholding tax type/ code entered in the posting term in contract

To meet the current tax requirement that TDS is applicable only on rent portion and not rent + service tax, take assistance of FI consultant. You have to change the base in withholding tax code configuration in FI

[Former Member]

Hi Shantanu,

Check your tax code assignment to company code.

SPRO -- > Logistics general -- > tax on Goods Movements -- >India -- > Basic setting -- > Determination of Excise Duty -- > Condition-Based Excise Determination -- > Assign Tax code to Company Codes

Rgds,

Srini

[narnei]

Hi Mr.Shantanu Kar,

Can you pls check that in contract --> Posting parameters tab --> with holding tax --

have you assigned the with holding tax ( Should flow from Vendor master )  type to that vendor as shown in attached screen shot.

Pls confirm it.

Regards,

N.S.Rao