Changes in Service Tax post budget 2011-12

[Former Member]

Dear All,

Post Union budget India - 2011-12, Service tax liability & input credit is based on point of taxation. SAP has also recommended to deactivate BTE and not to use Deferred Tax and use only Target Tax code (SAP Note 1571186). But SAP has not recommended any changes for configuring default GL Account.

For new implementation whether Interim Tax code is required and Service Tax clearing account is required? In my opinion Interim Tax code & clearing GL account is not required.

Your opinion please.

Rgds,

Dwijendra

[stephen_long]

Hello,

I'm UK consultant supporting India based business. Our business has opted not to use the new process & will continue to defer the tax until payment is made. This means we don't have to make any changes to Service Tax config.

If you are going to change over, then we were going to approach it like this:-

Agree cut over date.

Complete Deferred Tax Transfer for that period

Configure new Service Tax codes (we were going to simple change from the use of the Tax codes around:-

i.e. currently we have D* for booking of invoice & then S* for realised tax.

Deferred tax program finds paid D* items & journals the value from D* related GL account to S* related GL account.

We were just going to change the use of the codes around, so users use S* codes when booking invoice. simple.

[Former Member]

Hello,

I fully agree with you but as a statutory requirement, Point of taxation will be applicable from 30/June and Assesse will have no option to use deffered tax.

Further with referance to notification no 18/2011,credit on input service tax can be availed immediately (no deffered tax) but payment has to be made within three months. It means if payment is not made within 3 months, credit of service tax has to be reversed.

As of now, I dont see any inbuilt control related to payment and reversal of service tax credit if payment is not made within 3 months.

Regards,

Dwijendra