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author's profile photo Former Member
Former Member

Backhaul Invoicing through SAP

Hi Experts,

This has regard to a new service Item which our client needs to bill to this customer.

Now to generate the invoice there is two different tax angle which we have to cater through System.

As per Service Tax rules , when the consignor or consignee falls under the specified category then, the payer of freight charges would be required to pay service tax. (Individuals do not fall under the specified category)

So on the basis of the above requirement of the law we need two different kind of the Invoice & its financial flows

1) First Scenario

In this Scenario the Invoice should show the value of Service Tax charged on the bill, but the Accounting flow should not consider the Service Tax Liability

For eg

Customer A

Invoice Amount Rs 100.00

Service Tax @ 2.5% Rs 2.50

Total Invoice Amount Rs 102.50

So the financial entry should be

Customer A/c Dr Rs 100.00 (Customer A/c)

Service Tax Payable A/c Dr Rs 2.50 (

To Back haul Income A/c Rs 100.00 (A/c Code 637)

To Service Tax Payable A/c Rs 2.50

2) Second Scenario

In this Scenario the Invoice should show the value of Service Tax charged on the bill & the respective service tax liability should also flows in the Accounting entries.

For eg

Customer B

Invoice Amount Rs 100.00

Service Tax @ 2.5% Rs 2.50

Total Invoice Amount Rs 102.50

So the financial entry should be

Customer A/c Dr Rs 102.50 (Customer A/c)

To Back haul Income A/c Rs 100.00 (A/c Code 637)

To Service Tax Payable A/c Rs 2.50 (

So kindly provide your way forward how the same can be managed through SAP

Regards,

tarmas

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  • Best Answer
    author's profile photo Former Member
    Former Member
    Posted on Jul 19, 2011 at 08:14 AM

    Hi,

    First of all try to segregate customer on which base you want to charge service tax

    example

    If customer A is in group A then service tax should not add and debit to customer

    Try to mange this with substitution rule take help of FI to write substitution rule

    or at last mange it with user exit.

    Kapil

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