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Former Member
Mar 13, 2013 at 12:46 PM

New Entry for Service Tax in SAP Business One


Hi Experts ,

Generally while applying Service Tax in AP Invoice the Whole Tax Amount + Base Amount is Credited to Vendor , this is general Scenario.

But now government has released a notification stating that several Services included in notification should pay Service tax on Ration Basis.

Example for Legal Fees :

Below entry is general Standard Entry in Sap Business One for Service tax entry

General Scenario

Suppose the Charges for Legal Is Rs.1000/-

i am creating AP Invoice Service Type document and selected the relevant "Legal Fees" ledger account and also the Service Tax Code with 12.36%

The following is the entry.

Account Debit Credit Vendor
1123.6 Service Tax Ecess Input 2.4
Service Tax HCess Input 1.2
Service Tax Input 120
Legal fees 1000

1123.6 1123.6

Now according to New Service Tax Notification the service tax for Legal Fees has to be paid fully by Service Receiver.

so the Accounting Entry should be like below

Account Debit Credit Vendor
1000 Service tax Paid ( Expense Account ) this is clubbed value of Cess & Hcess 123.6
Service tax Payable ( Liability Account ) this is clubbed value of Cess & Hcess
123.6 Legal Fees 1000

How this can be Achieved in SAP Business One.

Awaiting Your response Experts

Krishna Vamsi