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?
