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Aug 08, 2016 at 10:09 AM

Withholding Tax threshold limit for India Vendors

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Dear Friends ...

I am looking for assistance on the below… I been referring to SCN and other discussion (CIN / Ex WHT …) forums for the solution, unfortunately I could not find any relevant!! Request you to share your ideas

In India, Withholding Tax (WHT) should be calculated on Invoice / Payment whichever is earlier! We have different threshold limits for each tax type/code (15000 / 180000 / …)

In SAP we have WHT separately for Invoice & Payment, and also the threshold can be defined separately for each! Considering this and above condition how do we achieve threshold together for Invoice & Payment?

Since we have two different WHT codes (Invoice & Payment) and also threshold is defined at each level separately, system only considers WHT calculation once after crossing the threshold either Invoice or Payment

I also referred few of the below notes …

1945137 - Amount Based TAN level Exemption for India

1769234 - Withholding Tax Enhancements for India

1737480 - Withholding tax India Localization : DPC with MIRO

Example: Vendor A with threshold of 1, 80,000

In the month of July:

  1. We have an Invoice for 1, 20,000 – no WHT calculated as within the threshold limit
  2. Advance of 80,000 –Even now no WHT calculated as Payment is less than the threshold

Expected: When we put together Invoice+ Advance (1, 20,000 + 80,000 = 2,00,000) Vendor is already crossed the threshold of 1,80,000 hence from the ‘Advance’ system should calculate WHT!

Hope friends from India could have already have comments on this this, Is there a way to achieve the above expected?