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Former Member
Sep 14, 2010 at 08:22 AM

Purchase & Service Scenario

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Hi

We are purchasing a material, say Rubber from a Vendor. He supplies the Material to us and does some Servicing on it in our premises.

The details of the Purchase Order is as below:

Qty 1

Price 52910

Base Amount 52910.00

Base Amount for VAT (On Base Amt) 75% 39682.50

VAT 13.50% 5357.14

Base Amount for Service Tax (On Base Amt) 25% 13227.50

Service Tax 10.00% 1322.75

Service Tax 2% 26.46

Service Tax 1% 13.23

Total Service Tax 1362.43

Total Invoice Amt 59629.57

Here the Vendor is charging VAT on 75% of the Base Amount & Service Tax on 25% of the Base Amount. In our case, the VAT is recoverable, and do not maintain any record of the Service Tax. We simply add the Service Tax Amount to the Cost of the Material.

The above scenario is not mapped in our SAP System. And for work around we are creating a Standard PO and change the Material Price to 7,936.50 just to get the correct VAT Value 5,357.14. This we have discussed with Accounts also and they are OK with it. We deduct the TDS, and for this we are doing the changes in the MIRO only.

Can we go ahead with the above work-around? Or what is best way to resolve this Issue for the time being as we are doing back-log entries..

Alternatively I can create two Purchase Orders, one Standard Purchase Order for Material & other Service Purchase Orderu2026. Sounds stupid for me as we get single Invoice from the Vendor..

Also request you to please give the SAP Standard Solution for the same.

Regards,