Skip to Content
0
Former Member
Jun 25, 2016 at 06:37 AM

TAN Based Exemption - Withholding Tax (CIN) for Vendor Invoice Posting - India

1665 Views

Hi All,

We have a scenario where the withholding tax amount during vendor invoice posting from FB60 or MIRO, should be calculated considering the exemption percentage and exemption thresholds which is specific to vendors.

Example:

--> Standard Tax percentage of Tax Type T1 and Tax Code C1 is 2%

--> Vendor 9000 has an exemption of 50% on tax type T1 and Tax code C1, only upto threshold amount of 1 lakh

--> Now Invoice-1 came with 50k, as it falls under threshold the WT will be calculated at 1% which is 500 Rs (Considering exemption of 50%)

--> Now Vendor 9000 has only 50k balance in threshold

--> Now Invoice-2 came with 1 lakh, now only 50k falls under threshold and the WT tax should be calculated as below:

50k @ 1% (Considering exemption) which is 500 Rs

50k @ 2% (As it falls outside the threshold) which is 1000 Rs

Total 1500Rs should reflect as with holding tax line item.

We have achieved the above functionality by implementing note 1945137 (TAN Exemption process in vendor master), however the problem we are facing now is with the quaterly TDS returns report ( TCODE: FIWTIN_QRETURNS), where we the above entries for vendor lists as below:

Example:

Vendor Document No With.hold Tax code WTTax Amount Base Amount Rate (Exemption) P W/Tax rate 9000 1900000000 C1 500 50000 50 1 9000 1900000001 C1 1500 100000 0 2


From the above we can see that the second line's W/Tax rate is shown as 2%, but our calculated amount 1500 is derived at a rate of 1.5 % (Considering split between below threshold and above threshold of exemption limit vendor has)

But client want to see the below:

Vendor Document No With.hold Tax code WTTax Amount Base Amount Rate (Exemption) P W/Tax rate 9000 1900000000 C1 500 50000 50 1 9000 1900000001 C1 1500 100000 Not Sure what it should be here(Its okay even if its blank like above scenario) 1.5 (Client want to see this coz they will key in the same to tax report filing)

Kindly guide me to achieve the above functionality.

Observation: The reason for the above behavior of report (FIWTIN_QRETURNS) is the report is getting data from WITH_ITEM table and the table doesn't have the exemption details for the second document (1900000001), for the first document (1900000000) it has an exemption rate as 50% in WITH_ITEM table because of which the report is showing 1% as P W/Tax rate on the report; where as it is showing 2% for second as it don't have exemption percentage.

Please let me know if there is any way to solve this, I believe WITH_ITEM should be updated with exemption percentage as 25% for second document (1900000001) considering our split with threshold limit exemption. so that the quarterly report will show 1.5% on output.

Thank you!

Siva Chidam

Message was edited by: Siva Chidam