Reverse Charge Mechanism Applied in Service TAX

[eswar_reddichaarala]

HI ALL

Any one worked on Reversal service tax Mechanism please tell config steps.

scenario

Now 100% TDS Detecting from vendor invoice but India gov abandonment 50% TDS Service provider and 50 % Service Receiver should pay to Gov.  please tell the config steps

regards

eswar

[former_member1009083]

Hi,

   In F-43 you have to enter Expense amount.

Regards

Diptadhi

[eswar_reddichaarala]

hi DIPTADHI,

if experiences entered 100 its calculating like this

001 31       0010000175 vendor                98.00-

002 40       0000600061 exp                          94.18                 T1

003 40       0000231017  Tax Payable 50%             5.82                 T1

004 40       0000231021 Tax Payable 50%             5.82                 T1

005 50       0000231017  Tax Payable 50%             5.82-                T1

006 50       0000230102 TDS Basic  -              2.00-

its correct or i want change anything

regards

eswar

[former_member1009083]

Hi,

   Your Condition Type configuration is OK, no need to change the settings of Condition Type

As per abatement records you have to create different Tax Codes in FTXP and assign percentage rates as per abatement scenario.

In case of Formula Based Procedure, create seperate tax codes in FTXP and maintain percentage rates say in Tax Code 1B, 1C , 1D etc.

In case of Condition Based Procedure, create tax codes and maintain Condition Records against Tax codes say 1B, 1C, 1D through Tax Classification in FV11

Regards

Diptadhi

[eswar_reddichaarala]

HI DIPTADHI

I have tested and i have doubt here in f-43  have to enter total invoice or expense amount.and please tell i want select any requirement Routine in tax calculation procedure

regards

eswar

[former_member1009083]

Hi,

    You can also check SAP Note 1736781 which specifies aboutService Tax legal changes for abatements

Regards

Diptadhi

[subhadeep_das]

Many Thanks Diptadhi.

best regds

Subhadeep

[eswar_reddichaarala]

Hi Diptadhi

In my client not only 50%,they are having share like 40% and 25% for that i have to create diff tax codes correct with same condition type .

Doubt in  the condition type i have to maintain below mentioned selection or separate selection required . please suggest me.

Cond. class :   D Taxes

Calculat.type:  A Percentage

Cond.category: D Tax

regards

eswar

[former_member1009083]

Hi,

   For Service Tax Reverse Charge Mechanism, you have to define 3 new Condition Types for Service Tax Reverse Charge. i.e. Abatement Service tax (It should be Negative) , Education Cess on Service tax Abatement (Postive & Negative) and Higher Education Cess on Service Tax Abatement (Postive & Negative). You have to define your Condition Type against your Tax Procedure in Transaction Code OBYZ

In OBCN, define three Internal Processing Key for Abatement and assign the Key against Condition Type in Transaction Code OBYZ

Define three G/L Accounts for Service Tax Abatement in FS00

Maintain New Tax Code in FTXP. If you are using Condition-Based Procedure, you just have to define Tax Code and incase you are using Formula-Based Procedure, give percentage against Tax Code

Assign these G/L Accounts against Account Key which you have defined in OBCN , in Transaction Code OB40. If Condition -Based Procedure is used you just need to assign the G/L Accounts

In case of Condition-Based Procedure, maintain Condition records in FV11 by using Tax Classification & maintain rates as per new Service tax law against Tax Code

Regards

Diptadhi

[eswar_reddichaarala]

HI Diptadhi

Electrical Maintance	Dr	31000
Service Tax(SP  @ 50%)	Dr	1916
Service Tax(SR  @ 50%)	Dr	1916
TDS @ 2%	Cr		620
Service Tax Payable 50% (RCM)	Cr		1916
Vendor Electricals	Cr		32296

please tell how to configure above invoice

regards

eswar

[former_member1009083]

Hi,

   As per your Scenario you have to maintain 3 new Condition Types for Service Tax Reverse Charge. i.e. Abatement Service tax (It should be Positive) , Education Cess on Service tax Abatement (Postive & Negative) and Higher Education Cess on Service Tax Abatement (Postive & Negative). You have to define your Condition Type against your Tax Procedure in Transaction Code OBYZ

In OBCN, define three Internal Processing Key for Abatement and assign the Key against Condition Type in Transaction Code OBYZ

Define three G/L Accounts for Service Tax Abatement in FS00

Maintain New Tax Code in FTXP. If you are using Condition-Based Procedure, you just have to define Tax Code and incase you are using Formula-Based Procedure, give percentage against Tax Code

Assign these G/L Accounts against Account Key which you have defined in OBCN , in Transaction Code OB40. If Condition -Based Procedure is used you just need to assign the G/L Accounts

In case of Condition-Based Procedure, maintain Condition records in FV11 by using Tax Classification & maintain rates as per new Service tax law against Tax Code

Suppose you have maintain Tax Code 1A for Service Tax abatement of 50-50, then in FV11 against Service Tax Condition Type maintain 6% against Tax Code 1A and maintain 6% against Service Tax Abatement Condition Type and maintain 2% and 1% respectively for Education Cess and Higher Education Cess on Service Tax and Education Cess and Higher Education Cess on Service Tax Abatement. [Incase of Condition-Based Tax Procedure]

Or

In FTXP, while defining Tax -Code 1A, maintain the above rates against tax-code and assign G/L Accounts [Incase of Formula-Based Tax Procedure]

Regards

Diptadhi

[subhadeep_das]

Hi,

even I am on a lookout for this.

best regds

Subha

[eswar_reddichaarala]

hi subha,

i have configured but system not picking correct values.senior people advised me like if you are using MM module it will pick the correct values.

regards

eswar

[eswar_reddichaarala]

hi subha,

i have configured but system not picking correct values.senior people advised me like if you are using MM module it will pick the correct values.

regards

eswar

[subhadeep_das]

Hi,

did you check the access seq in obyz ?  Also if you can share any document on reverse charging configurations.

best regds

Subha

[eswar_reddichaarala]

hi subha,

is there any SAP notes on this issue please tel me.

regards

eswar

[subhadeep_das]

Hi,

not sure, as i told you, i am myself looking for some configuration guide. Got a client request to execute at the earliest.

best regds

Subha