on 05-27-2015 7:55 AM
Dear Experts,
Section 66B of the Finance Act, 1994 has been amended by Section 108 of the Finance Act, 2015. The rate of Service Tax is being increased from 12% to 14% (including Cesses). This change will come into effect from 1st of June, 2015. We are having more than 100 tax codes configured. Is there any possibility of working the above change through date validity option to avoid creation of new tax code? or suggest the best industry procedures.
Thanking you in advance.
Regards,
C. Sudhir
Hi Gurus,
We are using TAXINN, Due to Service tax changed from 12.36% to 14% we made a control in FV11 as per validity period (i.e) from till 31.05.2015 as 12.36% and 01.06.2015 to 31.12.9999 as 14%. In Receivable case the service calculation is not calculating at the time of Service Entry Sheet, In Non-Receivable case it is happening. also in MIRO level both Rec and Non-Rec is working fine.
Kindly provide some solution regarding my issue.
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Hi Sudhir,
You do not need to create new tax codes. You can extend the validity for the tax code with new tax rate.
Regards,
Mukthar
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Hi Sudhir,
If you are using the condition based tax procedure i.e. TAXINN, then you can maintain the tax codes for the condition with validity period from 01.06.2015 in FV11. For old tax codes you can restrict upto 31.05.2015 in FV12.
Moreover, If you are using reverse charge mechanism and it configured through withholding tax, then you can maintain the tax rates with validity in withholding tax formulas configuration node. For cess you can restrict the w.h.tax types with validity upto 31.05.2015 in the assignment of w.h.tax type to co.code configuration.
Regards,
Mukthar
Dear,
Hope for service tax codes in tax procedure ZTXINN have validity periods.I suggest you to have new tax structure for 14% service tax code.
Because you need to check for point of taxation based on your scenario of service supply for this as follows:
To summarize above parameters ,to make it simple- there are three parameters-
If two parameters before 1.6.2015 then old rate. If two after 1.6.2015 then new rate.
I suggest better have new service tax codes and amend all the pipe line P.Os with new tax codes.
This service tax hits only at the time of MIRO.
Hope this information may help you little bit.
Regards,
Pardhu
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