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To apply Output tax and Service tax on the same vendor invoice.

Nov 29, 2016 at 09:31 AM

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Former Member

I received a request from my Mumbai user to configure a new tax procedure / tax code to cater for the following scenario

VENDOR TAX INVOICE:

Item: Antivirus Mcfee

Quantity: 15

Rate: 1,800.00

Subtotal: 27,000.00 INR

Output VAT 6% = 1,620.00 (based on 27,000.00 above)

Service tax 14% = 3,780.00 (based on 27,000.00 above, again)

Swachh Bharat Cess 0.05% = 135.00

Krishi Kalyan Cess 0.05% = 135.00

Grand Total = 32,670.00 INR (add up all amount above)

Question:

Is it valid to apply the output tax and service tax on the same amount twice (from India’s tax regulation perspective)? Shouldn’t the vendor invoice be split in to 2 line items (service charge and product amount and apply the different tax respectively?).

Currently I don’t think there is any tax code can cater for such scenario unless I create a new one specifically for this invoice which is not practical.

Can someone help to review and comment on this vendor invoice if it is valid?

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