Company has following requirement
Goods has been sold to customer in INDIA from CHINA, now spare parts has to be delivered from Plant in INDIA.So, there will be FOC delivery and Proforma Invoice has to be created. Since we are sending spare parts for the machin which has not been sold from INDIA so VAT / CST will be applicabe.
In the case of FOC delivery, what will be the accounting entry. Since during the billing there will not be any account determination.
My client has a requirement that tax should be implied to invoice, and it should be debited to Expenses account rather than Customer,Since it is FOC. I am trying to do it but Customer G/L gets Hit.
Customer A/c= Debited
VAT Paable A/C = Credited
Please help me out