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Former Member

Service tax for Freight

Hi all, the following is the scenario, how do i map it

1. PO has material supply vendor and also a different transport vendor for transporting the same.

2. material has ED/cess/edcess/vat

For the above 2 conditions I have no issues as i can assign different vendor in condition type and i can create tax conditions for material as required for ED/Cess/ecess/vat.

But my problem is

The Transport vendor attracts service tax 12% of (25%of the total transport cost) and 3% ed.cess upon the 12% amount.

How do I achieve it? How do i get the taxes calculated upon the transport cost? as in normal case we are able to calculate taxes for the PO items only?

I can not have a separate PO for transporter as the amount will not be added the expenses to the material procured.

Any idea

Thanks

Samuel

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2 Answers

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    Former Member
    Oct 14, 2008 at 07:36 AM

    Hi,

    Please take two line item in purchase order.

    One for Material and second for services.

    Take second line item for services also take third party vendor at second line item condition level and also put service tax as 12.36%.

    Regards,

    Mahesh Wagh

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  • Nov 26, 2008 at 04:25 AM

    Dear Samuel,

    If u want the service tax to get added to the material then i suppose it is a nonsetoff tax and in which case u can enter the frieght amount inclusive of the service tax and cess on it.

    If the service tax is setoff then it should not go to the material cost in which case enter only the freight amount as a condition in the PO, asssign it to a freight vendor and maintain the service tax setoff conditions in FV11. Pass the material vendor bill separately and freight vendor bill separately in MIRO and since u have maintained service tax setoff conditions in FV11 it will be calculated only for the freight cost.

    Actually i had the same problem and i tried the above.

    Let me know whether the above fits for u as well

    Thx

    Raja

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    • Former Member

      Hi all

      I did not do any thing extra for the issue, since service tax re-coverable , we covered tax on freight part in FI. I was able to add the normal taxes bed/cess/secess vat for the material as usual. Freight being separate it was not difficult for me to that.

      Thanks

      samuel