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Even if the taxes are used in Order to cash cycle they need to be recoverable. Also
for Reverse charge type of taxes they need to be define 100% Recoverable.
Consider the following example:- Service Tax Settlement Form is showing the following
Balances:
Tax Type
Debit
Credit
Net
1963.91
1764.91
-198.28
Service
Education Cess
39.27
52.95
13.68
Service SHE
Cess
19.63
0.00
-19.63
Service Tax
Total
-204.23
Net
-217.91
Here the total amount is Rs 204.23 but net Payable amount is Rs 217.91. Why this is
so?
The above is intended behavior of the product. Reason behind the same is additional
credit against Service/Service Education Cess/Service SHE Cess cannot be offset
against Debit of Service/Service Education Cess/ Service SHE Cess. Hence credit of
one tax type can only be knocked off against the liability of same tax type. If still
there is credit available then the same cannot be utilized for knocking of the liability
of other tax type.
Can Service Tax Credit available be utilized for Reverse charge Liability?
As per the service tax rules the liability generated on account of Reverse charge need to be
paid exclusively. The liability cannot be adjusted against the credit. Consider the following
example:-
Tax Type
Credit
Liability(No
rmal)
Reverse
Charge
Liability
Total
Liability
Service Tax
2000
1200
500
1700
Education
Cess
500
300
100
400
SHE Cess
300
200
50
250
In the above case although sufficient credit is available to absorb the total liability but as per
the service tax rules for reverse charge liability should not be utilized again the credit. Users
while performing settlement need to perform the following steps:a. Find out all the transactions having reverse charge tax applicable. This need to be
find out based on the service type through a customize report or query as the case
may be.
b. While performing settlement user needs to make sure that they should utilize credit
only to the extent of normal liability by making use of credit utilized column in the
settlement form. This can be derived based on following:- Liability = Total Liability
Reverse charge Liability (as per step a).
Why Registration number List of Values is not having any values?
Registration number for Service Tax captured at Regime Registration. The registration name
to be selected for registration number is Service Tax Registration Number. If it is different
registration name other than Service Tax Registration Number then the above issue
happens.
Do India Localization supports Service Tax on 3rd party invoices generated by
concurrent India Program to generate 3rd party invoices?
India does support service tax on 3rd party invoices. Following are the steps need to be
performed to apply service tax on 3rd party invoice:
a. Query the 3rd party invoice generated by concurrent India Program to generate 3 rd
party invoices in invoice workbench.
b. Navigate to distributions and click on save.
c. Navigate back to invoice lines tab and keep the cursor on line.
d. Navigate to Tools > IL Tax details > Provide details and save.
What is the reason for India Service Tax Processing not processing transaction to
service tax repository?
The reason is that Point of Taxation date is not given in the regime registration setup. The
date is mandatory.
Is Service Type mandatory for Service Tax Functionality?
As per the new Service tax rules now it is not required to track service tax based on service
type. Hence in application also Service Type is made as non mandatory.
Where we can get the scope of service tax related reports?
The scope of service tax related reports can be checked in Point of taxation document
Readme for POT Patch.docx attached in Note 1459341.1.
Is there any relevance of Expense Account in Regime Registration Form?
In the current functionality there is no relevance of Expense Account. Hence no needs of
defining Expense account in Service Tax regime registration form.
Will the account given at the time of defining Tax Code will be considered for
Service Tax processing?
No, account given at the time of defining Tax Code will not be considered in any of the
processing. Accounts defined at the time of defining the regime for each tax type will be
considered. It is advised that you define separate natural accounts for each of the account
type
and tax type for ease of reconciliation and reporting.
Can I define multiple Service Tax Regimes?
No, you cannot define multiple Service Tax Regimes. However, to capture separate
registration values at the organization level, you can override the defaulted registration
values at an organization level.
Service Tax Setup illustration:
Regime Registration - Assigning Organizations
Let us consider an organization with the following organization structure:
Operating Unit 1 Delhi (Registration Number ST001)
Operating Unit 2 Hyderabad (Registration Number ST002)
In the above scenario, both the operating units should be assigned to the Service Tax
regime. To capture different registration numbers at the Operating Unit level, you can
capture one of the registration numbers at the regime level and capture the other
registration number (as non default) at the appropriate operating unit.
What is the relevance of Service tax distribution in PLA/RG field in Regime
registration form?
This is the field which will drive the register updates on the event of Service tax distribution.
Either PLA or RG registers will get updated with the service tax amount based on the field
selected here.
Can Service type be defaulted to transactions instead of user selecting the
service type manually?
Yes. There is a provision to define service type in Supplier/Customer additional information
forms. Service type will get defaulted to transactions based on these setups done.
What is the default hierarchy for Service type in transactions?
Service type will get defaulted to transactions in the below mentioned order:
a. Service type defined in Supplier/Customer additional information at site level.
b. If the above is not defined, then system will check for the setup at null site level.
If both the above are returned null, then no service type will default in transactions. In such
case, user has to manually select the service type in transactions.
How to define new service types other than those provided as seeded values?
It may be noted that the user in the application can manually add service types. The need
for addition of service types arises whenever Government of India added more services vide
inclusion in Finance Act. The same can be done using the below steps:
a. Navigate to India Local Purchasing > Asia/Pacific Lookups > Query with Type as
JAI_SERVICE_TYPE
b. Click on New and specify the code, Meaning, description and effective from date.
By doing this, User will be able to select the new service types as well in the transactions.
Can defaulted Service type be changed in the transactions?
Yes. Default Service type can be changed in the transactions such as purchase orders, sales
orders, AR transactions etc., However service type cannot be changed when a RMA is
created with reference to Order or Invoice. In this case, Service type of the original order will
get copied to the RMA order and is shown in view mode only.
Why India Service tax processing concurrent program is landing in error as
Charge (RECOVERY/LIABILITY) Account not defined for the tax type Service?
This error might occur if regime registration setup is not done for the organization and
location combination used in the transaction.
What is the purpose of Service tax manual entry form?
This functionality is provided as a means for handling exceptional scenarios in your business
process that necessitate capturing of such transactions outside the normal transaction
cycles. Manual Entry transactions for Service tax may be used for passing Adjustment
entries for service tax Recovery / Liability transactions done in the Procure to pay and Order
to cash Cycles. Service tax Recovery / Liability, Service tax Payment transactions can also be
created directly using this window.
Why post settlement of Reverse Charge Liability the service tax credit is not
available in Service Tax Repository?
The cause of the issue is non processing the settlement performed through Settlement
Payment Details Form. Until the settlement done for Reverse charged is processed credit of
reverse charge will be processed by service tax processing concurrent. Follow the below
sequence of steps in order to avoid/resolve issue:1. Perform Settlement for Reverse Charge
2. Query the Invoice to Tax authority and pay it.
3. Navigate to Settlement Payment details form and process the settlement
4. Run "India Service Tax Processing"
5. Check the repository Service tax credit will be available for Reverse charge Liability
TDS FAQ
In R12 can TDS functionality work at Legal entity (LE) level?
For R12 TDS is at operating unit level only.
What is the relevance of rounding factor given at TDS Year Info Form?
For TDS invoices the rounding will happen based on the rounding factor set at the TDS Year
Info form. Even if it is not set system will by default round all invoices to nearest Rupee. Note
the rounding factor given at Tax code definition form level is irrelevant for the TDS type of
Tax.
Can exception threshold be defined without normal threshold setup?
Exception setup is defined for the purpose of deducting TDS other than normal rate. System
will allow defining exception setup only if normal threshold setup is in place.
Can threshold be defined from back date?
Thresholds need to be defined based on the current date. Current functionality does not
allow defining threshold from back date.
What should be the value to be provided in field Vendor Additional Information
form if the Supplier does not have PAN number?
As per the income tax rules the value to be provided is PANNOTAVBL. This is the only value
to be provided for suppliers not having valid PAN so that Application can deduct TDS at
higher rate.
Why thresholds are not appearing post performing supplier/vendor additional
information setup?
Follow the following steps to resolve the issue:1. Query the Regime Registration setup for the problematic Operating Unit.
2. Delete the value of the TAN# attached. (Copy and paste this value).
GL Date of the invoice was picked pre date before Start date of threshold. E.g. Invoice
GL Date is 18-MAR-2013 but threshold is starting from 20-MAR-2013 or
If the vendor is attached to an exception setup, the normal threshold is end dated
and there is no active normal threshold. Ensure that normal threshold is also active
when vendors are attached to exception setup.
Both Prepayment and standard invoice should have TDS rate applied on all the lines.
Will RTN invoice generate if user applies prepayment to a never validated invoice?
RTN invoices are the reversal invoice created to knock of the effect of duplicate TDS
generated at prepayment level. In the case of never validated invoices, no TDS invoices is
generated, then there is no duplicate TDS deduction and hence no RTN invoices will be
generated. The application will calculate TDS on differential amount and create TDS invoices
provided prepayment amount is less than invoice amount.
Why application is showing error Cannot unapply the prepayment as it was
applied before validating the standard invoice?
The error is intended provided user tries to unapply prepayment applied on a never
validated invoice. The intention of the error is to stop user to unapply prepayment as to
avoid compliance issue. Consider the following example:1. Prepayment created for Rs 1000 with TDS
2. Created standard invoice of Rs 2000 with TDS
3. Applied prepayment before validation of standard invoice. System will calculate TDS
on differential amount i.e 1000 (2000-1000) and will generate invoice
4. If application allows this prepayment to get unapplied then there will be short TDS
deduction on Rs 1000 of standard invoice. Current functionality allows TDS
generation only of first validation.
What is the recommended approach of prepayment application - After validation
or Before Validation?
The recommended approach is to apply prepayment on validated invoice. This will help in
prepayment unapplication if required in future. Currently functionality stops prepayment
unapplication on never validated invoice.
Does system generate TDS invoice when an invoice line/distribution is added or
modified?
As per the intended product behavior TDS will be deducted only on first validation. If post
validation user wants to add or modify Invoice lines/distribution then the only way is to
cancel the invoice and create a fresh one.
RTN Invoice not generated when few Invoice lines do not have TDS?
Consider the following example:Invoice Amount Rs 20000
Line 1 Rs 10000 without TDS
Can user change TDS TAN number in Regime Registration form for TDS?
TAN number once saved can not be changed from fron end in regime registration. If there is
genuine business case which needs change in TAN number then please open a service
request with support to get data fix for it. In case if you change the TAN number from front
end then user will not be able to validate the invoice as they will be getting the error "TDS
FIN Year not defined".
With what terms does TDS Credit Memo get created with?
TDS Credit memo gets created with terms 'IMMEDIATE'. Please note that the TDS Credit
memo is required to be generated in lieu of the TDS deducted from the Vendor Liability. As
the TDS invoice liability is required to be recorded immediately in booking the invoice, the
corresponding TDS Credit memo(liability) should also be booked immediately. Or else, it may
lead to a reconciliation issue between TDS credit memo and the TDS Invoice.
While Validating Invoice getting error "Deductor Type Not Defined". How to
resolve?
The cause of the issue is Deductor type is not setup in regime registration form for TDS. As
per FVU 4 the deductor type is mandatory and hence code is checking for it. Please perform
the following to resolve the error:1. Navigate to India Local Payable
2. India Localization > India TCS/VAt/Service Tax > Setup > Regime Registration > Query for
TDS Regime
3. Add parameter as "Deductor Type" and select value from List of value. Save Changes
4. Retest the issue
5. Migrate the solution to appropriate environment