Service tax on Freight

[Former Member]

Hi All,

How to map the below scenario where service tax is calculated on freight and then added to the total and on this total VAT is calculated.

BASIC AMOUNT: 1000

Loading Charges: 100

Freight Charges: 200

Service tax on freight@2.575%: 5.15

Now my VAT is calculated as: (1000100200+5.15) X 4%

How can I map this scenario??

Regards

Ayyallas

Edited by: ayyallas on Sep 15, 2010 1:13 PM

[prabhjotsingh_nayyar · Accepted solution]

Hello,

Create a PO and in that maintain Tax code which ever is applicable.

Also Maintain Freight condition.

Now do regular GR.

At the time of MIRO, you will see two line items...one for material and other for Freight.

Now in Freight line item, apply the Service Tax code and in material line item apply material tax code with VAT.

And Check the calculation.

I hope this will help.

Or

Put the service tax charges in Unplanned delivery charges.

This is also practiced all over.

Regards

Prabhjot Singh