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Former Member

Want to calculate service tax at the time of MIRO

Dear Expert,

Want to calculate service tax at the time of MIRO.

Currently we are using tax code process with condition records to calculate the service tax at the MIRO.

But in the new scenario my client wants to calculate the service tax during MIRO.

Example:

Service PO amount = ` 10000.00

Then a/c flow at MIRO is:

GR/IR Service = ` 10000.00 Dr

ST @ 10 % = ` 1000.00 Dr

ECS @ 2% =` 20.00 Dr

Hcess @ 1% = ` 10.00 Dr

Vendor V1 = ` 11030.00 Cr

New Requirement:

Service Po Amt = ` 10000.00

Then a/c Flow should be:

GR/IR Service = ` 10000.00

Service Tax = ` 900.00

Ecs @ 2% = ` 18.00

Hcess @ 1% = ` 9.00

Vendor V1 = ` 10927.00

This is because client does not know the service tax charges during creation of PO.

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6 Answers

  • Best Answer
    Posted on May 01, 2012 at 06:02 PM

    You can try this scenario with the following workarounds, if your Client agrees to it,

    1- Create tax codes as per your requirement (Say 9,2,1 % for example you have given)

    2- You can allow direct postings for the service tax GL & post this values of Service Taxes in G/L tab i.e. 2nd Tab you see in MIRO screen, Check which helps you,

    As per me this is the only 2 options available for postings i.e. Either by Proper Tax code or by Direct G/L Postings.

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  • author's profile photo Former Member
    Former Member
    Posted on May 01, 2012 at 08:30 AM

    Hi,

    Please follow below.

    -Create a Service Tax code

    -Assign this to PO

    -In MIRO, Please go in TAX tab, untick "Calculate Tax" put tax manually. follow below

    Best Regards

    Ruksana


    Service Tax.JPG (120.5 kB)
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  • Posted on May 02, 2012 at 08:05 AM

    Hi Rakesh,

    Try this one - it is simpler than the earlier suggestion I had given.

    While doing MIRO, split the invoice value into 2 parts - one without service tax (in your eg. Rs.1000/=) and the balance with service tax (Rs.9,000/=).

    Click on G/L tab in MIRO screen and enter 2 line items as below:

    1. Service/expense G/L, Rs.1,000/= , zero% tax code

    2. Service/expense G/L, Rs.9,000/=, 10% service tax code.

    Upon posting, system automatically calculates the tax on the 2nd line item only, since 1st line item has zero tax code.

    Regards

    Prabhu

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  • Posted on May 01, 2012 at 04:15 AM

    Hi,

    Service tax will capture ONLY at the time of invoice verification(MIRO).

    Service tax need to maintain in the service PO in the INVOICE TAB in item details and during invoice

    verification, service tax with tax code will flow from service PO to Invoice.

    More on details, refer linkS:

    http://scn.sap.com/thread/1807649

    http://scn.sap.com/thread/1802120

    http://scn.sap.com/thread/2091232

    Regards,

    Biju K

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    • Former Member Bijay Kumar Barik

      Hi Biju,

      My understanding is like this:

      In system the possibility exists where I can enter the service tax in MIRO but by business it is not a standard practice to follow as no finance dept will accept for such a method of invoicing.

      Thanks for the reply.

      Regards

      Ayyallas

  • Posted on May 01, 2012 at 04:52 AM

    you will have to enter the tax code in the PO. it may not be possible to enter the s tax amount directly as an amount during MIRO.

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  • Posted on May 01, 2012 at 06:58 AM

    Hi ,

    As highlighted above , it is quite logical that purchase department & Vendor should maintain level of clarity on all terms ( including Taxes) at the time of Agreement.Specially if you are taking credit of these taxes.

    If you still feel that requirement is justified then i guess this can be sorted by a work around solution.

    1) Maintain condition type for Service Tax with calculation type Manual instead of %age.

    Suppose ZSER Condition type with manual calculation type.

    2) Add these Condition types in your taxation procedure.Maintain Key Combination as per you requirement Frequency.

    3) Create a Tax Code

    4) Apply this tax code in PO

    5) Suppose at the time of Invoice you want to insert

    Service tax ( ZSER ) : 100

    Education Cess ( ZECS) : 2

    Higher Education Cess ( ZHCS) : 1

    Then Maintain Condition Records accordingly with proper validity periods.

    6) At the time of MIRO posting system will check the condition records & pick up updated taxes Conditions..

    Hope it helps !!

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