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India

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Table of content

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Table of content
1 India
1.1 Financial Accounting (FI)
1.1.1 Taxes (FI-AP/AR)
1.1.1.1 Excise Duty
1.1.1.1.1 Partial CENVAT Credit
1.1.1.1.2 Monthly Remittance of Excise Duty and Service Tax
1.1.1.2 Value Added Tax (VAT)
1.1.1.2.1 Configuration for Official Document Numbering
1.1.1.3 Service Tax
1.1.1.3.1 GTA Service Tax
1.1.1.3.1.1 Customizing for GTA Service Tax
1.1.1.3.1.2 Posting GTA Service Tax
1.1.1.3.1.2.1 Create Challan for Remittance of GTA Service Tax
1.1.1.3.1.2.2 Update Bank Challan for GTA Service Tax
1.1.1.3.2 Update GAR-7 Challan
1.1.1.3.3 File Service Tax Returns
1.1.1.3.4 Service Category Maintenance
1.1.1.4 Sales Tax
1.1.1.4.1 Sales Tax Register
1.1.1.5 Withholding Tax
1.1.1.5.1 Classic Withholding Tax
1.1.1.5.1.1 Recipient Type
1.1.1.5.1.2 Calculate Tax Deducted at Source
1.1.1.5.1.3 Handling of Credit Memos
1.1.1.5.1.4 Making Down Payments on Invoices Where TDS Has Been Calculated
1.1.1.5.1.5 Reversing TDS Postings
1.1.1.5.1.6 Remittance Challans
1.1.1.5.1.7 Print Certificates
1.1.1.5.1.8 Reprint Certificates
1.1.1.5.1.9 Cancel Certificates
1.1.1.5.1.10 Archiving of TDS Documents
1.1.1.5.1.10.1 Archiving TDS Documents
1.1.1.5.1.10.1.1 Creating an Archive Report Variant
1.1.1.5.1.10.2 Deleting TDS Documents
1.1.1.5.1.10.3 Reloading TDS Documents
1.1.1.5.1.10.4 Archive Overview
1.1.1.5.1.11 Transaction Codes for Classic Withholding Tax
1.1.1.5.2 Extended Withholding Tax
1.1.1.5.2.1 Section Code
1.1.1.5.2.2 Withholding Tax Type
1.1.1.5.2.3 Withholding Tax Code
1.1.1.5.2.4 Withholding Tax Key
1.1.1.5.2.5 Recipient Type
1.1.1.5.2.6 Exemptions and Reduced Rates for Section 194 A
1.1.1.5.2.7 Exemptions and Reduced Rates Under Sections 197 and 197 A
1.1.1.5.2.8 Surcharges
1.1.1.5.2.9 Tax Due Dates
1.1.1.5.2.10 Withholding Tax on Interest Payments to Customers
1.1.1.5.2.11 Journal Vouchers
1.1.1.5.2.11.1 Entering Journal Vouchers
1.1.1.5.2.12 Provisions for Taxes on Services Received
1.1.1.5.2.12.1 Entering Provisions
1.1.1.5.2.12.2 Reversing Provisions
1.1.1.5.2.13 Remittance of Withholding Tax
1.1.1.5.2.13.1 Remittance Challans
1.1.1.5.2.13.1.1 Creating Remittance Challans
1.1.1.5.2.13.1.2 Canceling Remittance Challans
1.1.1.5.2.13.2 Entering Bank Challans
1.1.1.5.2.14 Withholding Tax Certificates for Vendors and Customers
1.1.1.5.2.14.1 Print Vendor Withholding Tax Certificates

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1.1.1.5.2.14.2 Print Customer Withholding Tax Certificates
1.1.1.5.2.14.3 Reprint Vendor Withholding Tax Certificates
1.1.1.5.2.14.4 Reprint Customer Withholding Tax Certificates
1.1.1.5.2.14.5 Cancel Vendor and Customer Withholding Tax Certificates
1.1.1.5.2.14.6 Maintenance of Acknowledgement Numbers
1.1.1.5.2.15 Withholding Tax Certificates from Customers
1.1.1.5.2.15.1 Selecting Which Line Items to Clear
1.1.1.5.2.16 Withholding Tax Information System
1.1.1.5.2.17 Transaction Codes for Extended Withholding Tax
1.1.1.5.3 Quarterly TDS Returns
1.1.1.5.4 Migration from Withholding Tax to Extended Withholding Tax
1.1.1.5.4.1 Implementing Logistics Invoice Verification (MM-LIV)
1.1.1.5.4.2 Archiving Cleared Items
1.1.1.5.4.3 Customizing Extended Withholding Tax
1.1.1.5.4.3.1 Defining Official Withholding Tax Keys
1.1.1.5.4.3.2 Defining Withholding Tax Types and Withholding Tax Codes
1.1.1.5.4.3.3 Defining Minimum and Maximum Amounts
1.1.1.5.4.3.4 Making Additional Settings
1.1.1.5.4.4 Setting Up Authorizations for Migration
1.1.1.5.4.5 Blocking Users
1.1.1.5.4.6 Withholding Tax Migration Health Check
1.1.1.5.4.7 Mapping Withholding Tax Types and Withholding Tax Codes
1.1.1.5.4.8 Activating Extended Withholding Tax
1.1.1.5.4.9 Maintaining Vendor Master Records
1.1.1.5.4.10 Withholding Tax Data Migration Tool
1.1.1.5.4.10.1 Checking the Documents
1.1.1.5.4.10.2 Migrating the Documents
1.1.1.5.4.11 Cleaning Up
1.1.1.6 Tax Collected at Source
1.1.1.6.1 Customizing for Tax Collected at Source
1.1.2 General Ledger Accounting (FI-GL)
1.1.2.1 Chart of Accounts
1.1.2.2 Financial Statement Version
1.1.3 Accounts Payable (FI-AP)
1.1.3.1 Vendor Master (Withholding Tax Data)
1.1.3.2 Entering Vendor Invoices
1.1.3.3 Entering Vendor Down Payments
1.1.3.4 Clear Invoices Against Down Payments
1.1.3.4.1 Example
1.1.3.5 Down Payment Clearing with MIRO
1.1.4 Accounts Receivable (FI-AR)
1.1.4.1 Customer Master (Withholding Tax Data)
1.1.5 Asset Accounting (FI-AA)
1.1.5.1 Year-End Income Tax Depreciation Report
1.1.5.1.1 Calculation of Depreciation
1.1.5.1.2 Calculation of Capital Gains or Losses on Sales of Assets
1.2 Flexible Real Estate Management (RE-FX)
1.2.1 India
1.2.1.1 Tax Deducted at Source
1.2.1.1.1 Customizing
1.2.1.1.1.1 Customizing for Withholding Tax Reports of Real Estate Objects
1.2.1.1.2 Master Data
1.2.1.1.2.1 Maintain Section Codes for Real Estate Objects
1.2.1.1.3 Reports
1.2.1.1.3.1 Withholding Tax Reports of Real Estate Objects
1.2.1.2 Service Tax
1.2.1.2.1 Customizing for Service Tax
1.2.1.2.2 Maintaining Business Places for Real Estate Objects
1.2.1.2.3 Maintaining Real Estate Contracts for Service Tax
1.3 Materials Management (MM)
1.3.1 Excise Invoice (Incoming)
1.3.2 Material Master (Excise Data)

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1.3.3 Vendor Master (Country Version India Data)
1.3.4 Condition-Based Excise Determination
1.3.4.1 Creating Condition Records for Excise Duty
1.3.4.2 Configuration of Tax Calculation Procedure TAXINN
1.3.5 Formula-Based Excise Determination
1.3.5.1 Material Master (Excise Data)
1.3.5.2 Vendor Master (Excise Data)
1.3.5.3 Customer Master (Excise Data)
1.3.5.4 Plant Master (Excise Data)
1.3.5.5 Excise Duty for Small-Scale Industries
1.3.5.6 Configuration of Tax Calculation Procedure TAXINJ
1.3.6 External Procurement (Domestic)
1.3.6.1 Creating Purchase Orders
1.3.6.2 Entering Goods Receipts
1.3.6.3 Entering and Verifying Invoices
1.3.6.3.1 Invoice Reduction
1.3.7 External Procurement (Imports)
1.3.7.1 Creating Purchase Orders
1.3.7.2 Entering Invoices for Bills of Entry
1.3.7.3 Capturing Excise Invoices for Bills of Entry
1.3.7.4 Entering Goods Receipts
1.3.7.5 Posting Excise Invoices
1.3.8 Subcontracting
1.3.8.1 Subcontracting Without Payment of Excise Duty
1.3.8.1.1 Subcontracting Challan
1.3.8.1.1.1 Processing Subcontracting Challans
1.3.8.1.1.1.1 Creating Subcontracting Challans
1.3.8.1.1.1.1.1 Calculation of Excise Duty on Materials for Subcontractors

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1.2.1 India

Purpose
This country version is designed for use by businesses with operations in India . As well as the generic SAP system functions, it comprises functions
designed for laws and business practices particular to India.
This documentation explains how the country-specific functions work and what Customizing settings are needed to implement these country-specific
functions. It does not cover the generic functions, which are described in the rest of the SAP Library.

Features

Country-Specific Functions
Most of the country-specific functions for India relate to Financials and Logistics. The main areas are as follows:
Excise duty and the central value-added tax system (CENVAT)
Withholding tax (also known as tax deducted at source)
Sales tax
Maintenance and printing of statutory excise registers
Tax deducted at source in Flexible Real Estate Management (RE-FX)
All of the menu paths given in this document are based on the India Localization role, with the exception of functions in withholding tax, whose menu paths are
given from the SAP Easy Access menu.

1.1 Financial Accounting (FI)

Purpose
The Financial Accounting (FI) component covers the most important laws and business practices specific to India. The following documentation describes
these aspects of the component.

Features

Country-Specific Functions
Country Version India comes with a large number of additional functions for withholding taxes. The customer and vendor masters have been enhanced to store
data only used in India. An extra report is also provided for depreciating assets according to the Income Tax Act.

Country Template
The country template for India comes with:
Sample settings for calculating and posting taxes
A chart of accounts and financial statement version
Sample settings for asset depreciation

1.1.1 Taxes (FI-AP/AR)

Purpose
The Taxes component covers the most important laws and business practices specific to India. The following documentation describes these aspects of the
component. For generic information about Taxes , see Taxes (FI-AP/AR) .

Features

Country-Specific Functions
Country Version India uses the standard functions for calculating and collecting withholding taxes. However, both Classic Withholding Tax and Extended
Withholding Tax come with additional functions for tax remittance, journal vouchers, creating withholding tax certificates, and preparing annual returns.
If you want to handle excise duties, you must post the excisable transactions using the Materials Management (MM) and Sales and Distribution (SD)
components. The system calculates the excise duty in these components and creates the appropriate line items in Financial Accounting (FI). However, if you
only want to handle withholding taxes, you can use FI on its own.

Country Template
The country template for India comes with settings for calculating and posting withholding taxes, and account determination settings for posting excise duty.

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1.1.1.1 Excise Duty

Use
The SAP system automatically calculates excise dutiesin Materials Management (MM) and in Sales and Distribution (SD), and posts them in Financial
Accounting (FI).
The system covers all types of excise duty, all of which need to be calculated and reported separately:
Basic excise duty(BED)
Special excise duty(SED)
Additional excise duty(AED)
National calamity contingency duty(NCCD)
Cess
Education cess
Countervailing duty
Additional duty of customs

Features
The system of excise duties is complex, and differs from the generic functions for taxes on sales and purchases in a number of ways:
The rate of duty on a single material can vary according to which chapter IDit is listed under.
You cannot offset all excise duty on inputs against outputs.
Depots cannot offset any input duties at all. Manufacturing plants can only offset input duties if they can show that the input materials are used to
produce output materials.
You have to record all excise duty (inputs and outputs) in excise registers.
Your company may only be entitled to offset a portion of the duty on inputs against duty on outputs.
Companies that qualify as small-scale industries can levy excise duty on outputs at reduced rates, so if you purchase materials from these companies,
you must calculate a different rate of excise duty.

Excise Determination
MM comes with two ways of determining excise duties (and sales taxes) on input materials: formula-based excise determination and condition-based excise
determination . The system calculates excise duties using a tax procedure.
SD also supports formula-based and condition-based excise determination, but in SD, the system calculates the taxes using a pricing procedure, not the tax
procedure (see Pricing ).

Reporting
You have to remit the excise duty that you have collected to the central excise authorities. The law requires you to remit excise duty twice monthly: for the
first half of any given month (115 inclusive) and from 16 to month-end. In each case, you are allowed five days to remit the excise duty. Country Version
India offers a report to help you do just that (see Remittance of Excise Duty Fortnightly ).
A small number of transactions have to be remitted on the same day (see Other Outward Movements ).
In addition, the system allows you to prepare printouts of the various excise registers for the tax authorities.

1.1.1.1.1 Partial CENVAT Credit

Use
In some industries, businesses are only allowed to set off a portion of their input excise duty against output duty. In this case, the remainder of the duty is
added to the material value.

Activities
Customizing
If any of your excise registrations are only entitled to claim partial CENVAT credit, set the indicator in Customizing for Logistics General, by choosing
Taxes on Goods Movements India Basic Settings Maintain Excise Registrations .
Configure separate tax codes that split the excise and post some as tax and add the rest to the material price.
Day-to-Day Activities
The portion of the excise duty that is added to the material value is displayed in the excise invoice, along with the CENVAT credit. This amount is added to
the inventory value when you post the goods receipt.

1.1.1.1.2 Monthly Remittance of Excise Duty and Service Tax

You use this report to calculate how much excise duty you must remit to the authorities. Legislation requires you to remit excise duty monthly - for all the
goods issued and services provided in the given month. In each case, you are allowed five days to remit the excise duty and service tax.
Once the report has determined how much you have to pay, it allows you to specify where the money should be paid from - whether it should be deducted from

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the CENVAT credits that you have accumulated, from the service tax credit accounts, from the personal ledger account (PLA) or from the service tax clearing
accounts.
If the service tax is to be paid from the service tax credit and CENVAT credit, and the credit available is not sufficient to pay off the service tax, then the
amount is pushed to the service tax clearing accounts.

Note
You use the service tax clearing accounts for service payments and personal ledger accounts for CENVAT payments respectively.

Prerequisites
You have:
Customized the system so that when you create an excise invoice for a sale, the system automatically debits the excise to a CENVAT clearing account
Made the settings in Customizing for Logistics - General, by choosing Taxes on Goods Movements India Business Transactions
Utilization
Maintained the various service tax G/L account details in Customizing for Logistics General , under Taxes on Goods Movements India
Service Tax Account Assignment .

Features
To access the report, on the SAP Easy Access screen, choose Indirect Taxes Sales/Outbound Movements Monthly Utilization .
On the selection screen of this report, you can no longer maintain the General Ledger (G/L) accounts. To maintain the G/L accounts, do so in Customizing for
Logistics General , under Tax on Goods Movements India Service Tax Assign Service Tax Accounts .

Selection
On the selection screen, enter data as required:
Organizational data (in the General data group box)
Posting date for the CENVAT payment, if it is different from the run date
The period to be covered by the report (for example, 1-15 January)

Note
If, for any reason, you want to select an excise invoice individually, you can do so. Any entry in the Period field will be disregarded.

Note
To display a list of all the excise invoices whose excise duty you have not yet remitted, choose Display pend. invoices .
To display a list of only the excise invoices for a given period, enter the period in the Period fields, select Select pending inv. for period, and
choose Display pend. invoices . You can also print the list of pending invoices.
To display the last date when tax was remitted, choose Display last util. date (Display last utilization date).

Payment options
You can pay the CENVAT and Service Tax payable amount from CENVAT credit or service tax credit accounts.

Output
For each sort of excise duty, the system shows you:
How much you have to remit ( Amounts payable group box)
How much credit you have at your disposal on the appropriate CENVAT account and Service Tax account (Available balances)
For a list of excise invoices that are considered for the CENVAT payment, choose Display excise invoices. You can print the list and use it as an annexure.
You can save the entries only when you have utilized all the duties. The system then:
Creates an accounting document that debits the accounts from which the excise duty or the service tax is to be paid.

Account Debit Credit

CENVAT account 250.00

Excise duty account 50.00

Service Tax 200.00

Generates entries in the Part II table for service tax payable. The system assigns a new register type T and also updates the Excise Part II details
(J_1IPART2) and the Excise invoice line item details (J_1IEXCDTL) tables with the service tax serial number. Similarly, the system also generates
entries in the Part II table for service tax exemption payable and assigns new register type X .
The system generates entries in the Part II table for service tax utilization with register type S .

1.1.1.2 Value Added Tax (VAT)

Use
In India , VAT has been levied in certain states from April 1, 2005 . VAT is levied instead of the Local Sales Tax (LST). VAT also replaces other taxes such
as, turnover tax, surcharge, additional surcharge.

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Prerequisites
You can configure the following tax procedures:
For Condition-Based Excise Determination , configure the tax procedure TAXINN. For more information about TAXINN, see Configuration of Tax
Calculation Procedure TAXINN .
For Formula-Based Excise Determination , configure the tax procedure TAXINJ. For more information about TAXINJ, see Configuration of Tax
Calculation Procedure TAXINJ .

Features
The essence of VAT is that you can set off the input tax against the tax paid earlier. VAT is based on the value addition to the goods, and your VAT liability is
calculated by deducting input tax credit from tax collected on sales during the payment period (say, a month).

Example
You have purchased input worth INR 1,00,000 and your sales are worth INR 2,00,000 in a month, and input tax rate and output tax rate are 4% and 10%
respectively, then input tax credit/set-off and calculation of VAT will be as follows:
Input purchased within the month = INR 1,00,000
Output sold in the month = INR 2,00,000
Input tax paid = INR 4,000
Output tax payable = INR 20,000
VAT payable during the month after set-off/input tax credit = INR (20,000 4,000) = INR 16,000

The excise invoice that you capture contains one of the following:
VAT Number If your buyer belongs to a state where VAT is levied, VAT Number has to be printed on the excise invoice.
Bill of Sale Number - If your buyer belongs to a state where VAT is not levied, Bill of Sales Number has to be printed on the excise invoice.
During billing, the system generates the VAT number if the VAT Registration number is maintained in customer master in the Tax Code 2 field. Else, the
system generates a Bill of Sale number.
These numbers have to printed serially and separately for Bill of Sale, VAT invoice, credit and debit notes. You can do this using the Official Document
Numbering.

1.1.1.2.1 Configuration for Official Document Numbering

Purpose
Official Document Numbering is used to to print the numbers serially and separately for Bill of Sale (BOS), Value Added Tax (VAT) invoice, credit and debit
notes.

Process Flow
To configure the Official Document Numbering forIndia, execute the following activities in the IMG under Cross-Application Components General
Application Functions Cross-Application Document Numbering Taiwan .
1. Define Business Places for different plants.
2. Assign Business Place to Sales Office.
3. Maintain different document classes to generate different number ranges, for example, B for Bill of Sale, V for VAT Invoice.
4. Assign the document class for the VAT and BOS to the Document Type.
5. Maintain the Number Group.
6. Maintain the Number Ranges for the Number Group.
7. Assign the Number Range to a combination of Business place, Document Class and Number Group.

1.2.1.2 Service Tax

This is a tax that is levied on taxable services as defined by law. Service providers are responsible for the service tax payment.

Prerequisites
In addition to the standard Implementation Guide (IMG) settings for taxes on sales/purchases, and deferred taxes, you must also have maintained the tax
registration numbers of your vendors, customers, and your own plants.

Note
If there are multiple tax registration numbers, you should have separate account postings to different General Ledger Accounts based on service
registration number. You can do this if you have maintained a separate tax code for each service registration number. For every service registration
number, you should define separate General Ledger Accounts for service tax and education cess on service tax.

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Features
Service tax has the following features:
It is charged at a certain percentage on the amount the service provider received for the services rendered.
The Education Cess and the Secondary and Higher Education Cess are applicable at a certain percentage on the service tax.
For the service provider (for example, vendor, landlord), this is a deferred tax. The tax payment becomes liable on receipts from the service receiver (for
example, customer, tenant). In case of partial payment, the proportional amount of the taxes (Service Tax, Education Cess, and the Secondary and
Higher Education Cess) must be paid to the tax authorities. The output taxes that became liable have to be transferred from the deferred tax account to
the normal output tax account with the Deferred Tax Transfer (RFUMSV50) program as described in SAP Note 921634.
For the service receiver, the tax credit can be utilized for payment of tax due when the vendor is paid for the whole invoice amount. In case of partial
payment, the assessee is not eligible to take credit on the proportional amount of the input taxes. Consequently, the taxes must be transferred from the
deferred tax account to the normal tax account when the payment for the whole invoice is made.
The interim general ledger account contains the total service tax that you have to receive or pay as required. The final general ledger account contains
only the actual amount that you have received or paid. This means that the corresponding tax codes have to possess a target tax code. The tax codes
defined for Service Taxes should not have a tax rate defined in the tax code itself. We recommend that you define the tax rate in the condition records of
the tax procedure (TAXINN) to cope with the frequent changes in tax rates easily.
The interim general ledger account contains the total service tax until the full payment of the invoice or receipt from customer.
Credit utilization or tax payment amounts are determined from the final general ledger account.
Cross-utilization of input credit between Services and Goods is permitted, so you can use the Service Tax credit to set off Basic Excise Duty that is
payable by you.
This tax is payable to and administered by the Central Excise Commissionerates working under the Central Board of Excise and Customs (CBES) of the
Department of Revenue in the Ministry of Finance.
Corporate assessees need to pay the tax on the value of taxable service received in a month, by a specified period in the following month. Period for
payment of tax by individual assessees are also defined.
All the financial documents for which service tax must be paid should contain information about the business place that identifies the tax office that is
responsible for collecting the service tax.
In the Flexible Real Estate Management (RE-FX) component, the leased-out rental objects are subject to service tax that you need to pay to the responsible
federal tax office. You identify the federal tax offices with the business place.

Example
The price of the service is INR 10,000.
Service tax that is applicable is INR 1,000 (10%).
Education Cess is INR 20 and Secondary and Higher Education Cess is INR 10.
Total amount the customer needs to pay is INR 11,030. The system updates the interim general ledger account with this amount.
For service provider:
Assume that the customer makes a partial payment, out of which INR 500 is against service tax. You have to manually update the final general ledger account
with this amount.
You can offset only INR 500 against the payables in that month.
For service receiver:
Assume that you pay the vendor (providing the service) the value of INR 11,030. In such a case, the credit of INR 1030 can be utilized to pay output tax.

1.1.1.3.1 GTA Service Tax

Unlike other types of services in India, recipients of transport services from goods transport agencies (GTA) are responsible for withholding and submitting the
service tax to the tax authorities on behalf of the transport service providers.
The system automatically calculates the GTA service tax and makes the relevant postings in Financial Accounting (FI).

Prerequisites
You have:
Made the settings described in Customizing for GTA Service Tax.
Entered the GTA withholding tax type and withholding tax code and selected the Liable checkbox in the vendor master for your transport service
vendors.
For more information, see Vendor Master (Withholding Tax Data)

Example
Consider an invoice for the transport of goods of INR 15000 with a service tax of 12 percent. The service recipient pays the service tax. During the invoice
verification process, the system makes the following postings:

Account Debit (Dr) Credit (Cr)

GR/IR clearing Dr 15000

Service tax receivable Dr 1800

Vendor Cr 15000

Service tax payable Cr 1800

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1.1.1.3.1.1 Customizing for GTA Service Tax

To calculate and report GTA service tax, make the following settings (all under country key IN ) :

Customizing Settings

1. Financial Accounting Financial Accounting Global Settings Withholding Create official withholding tax key GTA
Tax Extended Withholding Tax Basic Settings Define Withholding Tax
Keys

2. Financial Accounting Financial Accounting Global Settings Withholding Create withholding tax type G1 with the name GTA , and make the following
Tax Extended Withholding Tax Calculation Withholding Tax Type settings:
Define Withholding Tax Type for Invoice Posting Base amount = Gross amount
Rounding rule = W/tax comm. round.
Select Post w/tax amount checkbox
Accumulation type = No accumulation
Control data = select checkboxes W/tax base manual , Manual w/tax amnt ,
and No cert. numbering

3. Financial Accounting Financial Accounting Global Settings Withholding Select withholding tax type G1
Tax Extended Withholding Tax Calculation Withholding Tax Codes Enter withholding tax code G1 with description GTA
Define Withholding Tax Codes Select official withholding tax key GTA
Enter base amount percentage subject to tax 100%
Select posting indicator 3 (Offsetting entry to G/L account)
Under Calculation , specify the applicable service tax and select the W.tax
form. checkbox

4. Financial Accounting Financial Accounting Global Settings Withholding Select the row containing the withholding tax type/code combination for GTA,
Tax Extended Withholding Tax Calculation Withholding Tax Codes and double-click Formulas for calculating withholding tax from the dialog
Define Formulas for Calculating Withholding Tax structure.
Define the gross amount over and above which the service tax for GTA must
be calculated as follows by creating the following entries:
1. Enter the minimum amount on which GTA is applicable in the To
base amn field and leave other fields blank
2. Enter 9,999,999,999 in the To base amnt and the currently
applicable rate of service tax for GTA in the WhldTax (Withholding
Tax Rate) field

1.1.1.3.1.2 Posting GTA Service Tax

Process
This process illustrates how goods transport agencies can use the SAP system to post service tax.
1. Follow the standard invoice verification procedure to enter and verify invoices.
The system computes the service tax on the base amount withheld by the recipient of the service
2. Create a GTA Challan.
The system generates an internal challan number and displays the total tax amount payable to the government by the recipient of the services.
3. Display clearing document that the system generates during challan posting.
The system debits the withholding tax payable account and credits the bank account.
4. You create the bank challan, following the standard procedure, wherein you update the payment details.
The system updates the bank details.

Account Debit Credit

Service Tax clearing account 10000

GTA Service Tax final account 1000

Vendor 10000

GTA Payable 1000

1.1.1.3.1.2.1 Create Challan for Remittance of GTA Service Tax

In this procedure, you create a GTA challan to consolidate the total tax amount that the service recipient needs to remit to the government.

Features
On the selection screen, enter the following data:
In the Company Details group box, enter the company code, fiscal year, and the business place.
In the Details of Withholding Tax Items group box, enter the section as GTA.
In the Tax Remittance Details group box, enter the document date, posting date, and the bank account.

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Activities
1. Access this report on the SAP Easy Access screen by choosing Service Tax -> Goods and Transport Agency -> Create Challan for Remittance of GTA
Service Tax.
2. Maintain the relevant selection criteria on the selection screen.
3. Choose ( Execute ).
The Choose Selection Criterion dialog box appears.
4. Select the appropriate selection criteria and choose ( Continue ).
The system selects all the accounting line items by default and displays them on the Post Outgoing Payments: Process open items screen. To
deselect a line item, double-click the relevant entry.
5. Choose the Charge off diff . pushbutton to enter the tax amount. On the Post Outgoing Payments: Display Overview screen, to enter the total value,
double-click the line item.
6. On the Post Outgoing Payments: Correct G/L Account Item screen, to compute the total tax amount, enter *.
7. In the menu bar, on the Document tab, choose Simulate .
The system creates an accounting document. The document debits the withholding tax payable account and credits the bank account.

Account Debit Credit

GTA Payable 1000

Bank Account 1000

8. Save your entries.


On saving your entries, the Create GTA Challans for Remittance screen appears that displays the clearing document along with the accounting
document information. On this screen, select the line item and choose the Cleared Docs. pushbutton to view the clearing document.

1.1.1.3.1.2.2 Update Bank Challan for GTA Service Tax

You use this report to update the internal challan with the bank challan number after remittance of the total service tax to the government.

Note
For challan amounts that have been updated with the bank challan numbers, you need to manually post from interim service tax credit account to final
service tax credit account.

Activities
1. To access this report on the SAP Easy Access screen, choose Service Tax Goods and Transport Agency Update Bank Challan for GTA
Service Tax .
2. On the selection screen, enter the relevant data.
3. Choose ( Execute ).
The system updates the Table for Internal and external Challan nos-EWT India (J_1IEWTCHLN) application table with the bank challan details.

1.1.1.3.2 Update GAR-7 Challan

You use this report to capture the information about GAR-7 challan used to pay service tax. Once you remit the amount to bank through GAR-7 Challan, you
run this report to update the challan. You also have the option to capture the information about any advance amounts paid and adjustments done if any.

Note
In case the GAR-7 challan is not updated, then few of the section-4 details will not be filled in the Service Tax report.
Using this report, you cannot update challan numbers for normal incoming invoices and normal outgoing invoices.

Prerequisites
You have:
Maintained the various service tax G/L account details in Customizing for Logistics General , under Taxes on Goods Movements India
Service Tax Account Assignment .
Calculated how much excise duty and service tax you must remit to the authorities.

Features

Selection
On the selection screen, you enter the following data:
In the Transaction field, you can display, create, or cancel a challan.
On the Doc. Data tab, enter the accounting document details such as company code, plant, and fiscal year.
If you choose Create in the Transaction field, then the provides the following output options:
Update cash payments made through GAR-7

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Update advance payments made through GAR-7
Adjust payable by advance amount available
Adjust payable by excess amount available
The report displays the output based on your selection criteria.
The system also provides you an option to cancel based on the internal challan.

Output
The report updates the Recordings of GAR-7 (J_1IGAR7) table with GAR-7 details and creates separate forms for each company code, plant, and fiscal year
that you have entered. Each form shows the cash flow for each G/L account.
This report also shows the following information based on the settings you make on the selection screen:
Challan details
Cash flows in the period covered by the report
Amount available from advance and excess G/L accounts
Cash payments made from the respective service tax G/L accounts
Cash exempted for the respective service tax G/L accounts
The system creates an accounting document to debit the excise duty to the individual service tax clearing accounts and credit it to the bank accounts.

Account Debit Credit

CENVAT reversal 150.00

Register RG 23C 50.00

Service Tax 100.00

Activities
To access this report from the SAP Easy Access screen, choose Service Tax Update GAR-7 Challan .

1.1.1.3.3 File Service Tax Returns

You use this report to file electronic service tax returns for services that are taxable. You prepare the service tax returns on a half-yearly basis. However, the
system also allows you to prepare the service tax returns from anywhere between 1 to 6 months.

Note
Using this report, you can generate details of only the following sections:
Section 3 - 3A1, 3B, 3F(I), and 3F(II)
Section 4 - 4A(I)[a,b,c,d]and 4C
Section 5 - 5AA(a,b,c,d,e), 5B(I)[excluding b(iv), b(v),c(v)], and 5B(II)[excluding b(iv),b(v),c(iv)]
Assessees filing the service tax returns for the first time are required to furnish details regarding all of the accounts maintained by them, pertaining to
service tax.

Prerequisites
You have:
Customized the system so that when you create a service entry in Financial Accounting (FI), Materials Management (MM), and Sales and
Distribution (SD), the system automatically updates the invoices with service category details in the Invoices with Service Category (J_1ISER_BSEG)
table.
Determined how much excise duty and service tax you must remit to the authorities using the Monthly Remittance of Excise Duty and Service Tax
report.
Captured the amount paid in cash to the bank towards service tax and updated the GAR-7 challan.

Features

Selection
On the selection screen, you enter the following data:
General data such as company code, plant
Posting date
The date that you enter must be for the entire month (that is, from 1st to the 31st).
Advance document type
Service tax codes for exemption, export, import
Choose the section of the form that you want to display

Output
The system displays the various sections of the form for a registration number of a plant for a particular reporting period (anywhere between 1 to 6 months).
If you choose the Section 3 of ST3 report radio button on the selection screen, the system displays the gross amount relating to the service provided for a

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particular service category. All the relevant details for the service provided for a particular service tax category.
If you choose the Section 4 of ST3 report radio button on the selection screen, the system displays the service tax amount payable. Displays GAR-7
relevant info.
If you choose the Section 5 of ST3 report radio button on the selection screen, the system displays the CENVAT credit taken and utilized for different
material types.

Note
You cannot run the report across fiscal years. For example, you cannot run this report from January 2009 to June 2009.

1.1.1.3.4 Service Category Maintenance

You use this report to maintain service categories while executing a business transaction that involves materials subject to service tax. Using this transaction,
the system automatically determines the service category for invoices.

Prerequisites
You have performed the following settings:
Defined condition types in Customizing for Sales and Distribution , under Basic Functions Pricing Pricing Control Define Condition Types .
Assigned condition types to tax procedure in Customizing for Sales and Distribution , under Basic Functions Pricing Pricing Agreements Set
up Sales Deals Condition Type Groups Assign Condition Types/Tables To Condition Type Groups .
Classified condition types in Customizing for Logistics - General , under Tax on Goods Movements India Basic Settings Determination of
Excise Duty Condition-Based Excise Determination Classify Condition Types .
Classify the condition types irrespective of whether you use TAXINN (condition-based excise determination) or TAXINJ (formula-based excise
determination).
Defined tax codes in Customizing for Financial Accounting (New) , under Financial Accounting Global Settings (New) Tax on Sales/Purchases
Calculation Define Tax Codes for Sales and Purchases .

Features

Selection
On the selection screen, select any one of the following:
FI-SD Service Category Determination
If you select this radio button, the system allows you to define service categories for outgoing financial accounting customer invoices for service tax
reporting.
FI-MM Service Category Determination
If you select this radio button, the system allows you to define service categories for incoming financial accounting vendor invoices for reporting service
tax.
SD Service Category Determination
If you select this radio button, the system allows you to define service categories for billing documents.
MM Service Category Determination
If you select this radio button, the system allows you to define service categories for invoices.
If you select any one of the above options and then choose the Key Combination pushbutton, a dialog box appears. In this dialog box, a list of Customizing
activities related to the selected service category is displayed. Select the relevant activity and choose Continue . The system takes you to the selected
Customizing activity screen, wherein you save your entries.

Activities
To access this report, on the SAP Easy Access screen, choose Service Tax Service Category Maintenance .

1.1.1.4 Sales Tax

Use
This is a tax levied on the sale of a product. It is applied on the gross price of goods, inclusive of excise duty.

Prerequisites
In addition to the standard Implementation Guide (IMG) settings for taxes on sales and purchases, you must also have maintained the tax registration
numbers of your vendors, customers, and your own plants.
Furthermore, if the state legislation allows you to offset input local sales tax (LST) against output LST, you must also have defined this (see Material Master
(Excise Data) ).

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Features
There are two types of sales tax. Interstate sales (for example, between Karnataka and Tamil Nadu) are subject to central sales tax (CST). The tax rate is the
same throughout the country. Intrastate sales, on the other hand, are subject to local sales tax (LST), which differ from state to state. The system handles
these using tax jurisdiction codes.
A percentage of input LST can be deducted against output LST, depending on what percentage of goods you have purchased in the state in question.
The system calculates the sales taxes automatically, when you enter the tax codes. A report is also available that tells you how much sales tax you have paid
and collected.

1.1.1.4.1 Sales Tax Register

Use
You use this report to see how much tax has been accumulated under the various tax codes and tax jurisdiction codes for a combination of conditions.
You can also report how much input sales tax has been set off against the outputs. This report also can serve as the basis of determining your local sales
volume and central sales volume.

Features
To access the report, on the SAP Easy Access screen, choose Indirect Taxes Registers Sales Tax Sales Tax Register .

Selection
On the selection screen, fill out the following data:
Organizational data
General selections
Specify which documents you want the report to cover. If you need more selection criteria, use the dynamic selection fields.
General selection
Specify which taxes you want the report to cover. You can report either central sales tax or local sales tax by choosing a combination of ship-from and
ship-to locations.
If you want to restrict the selection to specific locations, fill out the Ship-from and Ship-to fields.

1.1.1.5 Withholding Tax

Use
Country Version India comes ready configured with all the settings you need to track and remit withholding taxes under the following sections of the Income
Tax Act, 1961:
Payments to contractors and subcontractors (Section 194 C)
Insurance commission (Section 194 D)
Rent (Section 194 I)
Fees for professional or technical services (Section 194 J)
Interest other than interest on securities (Section 194 A) (only supported in the Extended Withholding Tax solution)

Features
Country Version India offers you two solutions for handling withholding tax (also known as tax deducted at source or TDS). You can either use the Classic
Withholding Tax solution or the Extended Withholding Tax solution.

Note
If you are installing the SAP system for the first time, we recommend that you use the Extended Withholding Tax solution . Before you decide one way
or the other, however, you must give careful consideration as to whether Extended Withholding Tax covers your requirements. If you start working with
this solution and it transpires that it does not cover your needs, SAP does not offer a strategy for migrating to Withholding Tax .

Taxes withheld under each section are treated differently with regard to the time limits for remitting tax to the authorities, providing the taxpayer with a
withholding tax certificate, and filing a quarterly return. In addition, the formats for the withholding tax certificates and the returns also differ.
The Income Tax Act requires you to calculate taxes as soon as you enter an invoice. However, if you make a down payment to a vendor before you have
received an invoice from it, you withhold tax on the down payment. Then, once the invoice arrives, you clear the down payment against it.
When you prepare your quarterly returns, the act also requires you to make provisions for taxes on services received but not yet invoiced.

Country VersionIndia
Country Version India complements the generic Classic Withholding Tax and Extended Withholding Tax solutions with additional functions that meet the
needs of the Income Tax Act. These functions allow you to:
Ensure that you remit taxes within the due date
Track and report withholding tax surcharges separately
Adjust withholding taxes when you clear a down payment against an invoice

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Prepare withholding tax certificates and quarterly returns
Calculate withholding tax on provisions

1.1.1.5.1 Classic Withholding Tax

Use
Under the terms of the Income Tax Act, you are required to calculate withholding tax (tax deducted at source, or TDS) when you post a vendor invoice. The
system calculates withholding tax at the time of payment. To handle this difference in the calculation of the tax and to incorporate additional requirements,
such as withholding tax certificate printing and quarterly returns, additional functions are provided.

Features
The withholding tax for an invoice or a down payment is calculated at header level. That is, only one withholding tax code can be used for a down payment or
invoice. This implies that an invoice cannot contain items with different withholding tax rates. It can, however, contain one or more items with the same
withholding tax rate and one or more items with no withholding tax. This can be handled by specifying the base amount on which withholding tax is to be
calculated. On account of calculation at header level, companies have to instruct their suppliers not to include items with different withholding tax rates in a
single invoice, but issue separate invoices for different tax rates.
The system also allows you to print TDS certificates for vendors , and to reprint or cancel them if necessary. In addition, you can also prepare TDS returns .

1.1.1.5.2.5 Recipient Type

Definition
A system object that you use to classify payment recipients as legal persons or natural persons, for the purposes of withholding tax reporting.

Use
Customizing
Define the recipient types in Customizing for Financial Accounting (FI), by choosing Financial Accounting Global Settings Withholding Tax
Withholding Tax Basic Settings Maintain Types of Recipient .
Create two entries as follows:

Recipient type Text

CO Companies

OT Others

Master Data
When you enter the withholding tax types and codes in the vendor master, enter CO or OT in the Recipient Type field, depending on whether the vendor is a
legal person or a natural person.
Reporting
The annual returns separate the information about taxes withheld on legal persons and on natural persons.

1.1.1.5.1.2 Calculate Tax Deducted at Source

Use
You use this program to calculate withholding tax on vendor invoices.
It you have already posted a down payment for an invoice and withheld tax on it, the system automatically takes the tax already paid into account.
To access the program, from the SAP Easy Access screen, choose Accounting Financial Accounting Accounts Payable Withholding Tax India
Withholding Tax Tax Deduction at Source: Classic .

Prerequisites
You have already entered the invoices and the down payments.

Features
Selection
On the selection screen, enter the following data:
Run Program in Test Mode
We recommend that you first run the program in test mode, then once you are satisfied with the results, in update mode.

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Process Invoices Only
Select this if you want to post TDS for a specific invoice. It speeds up the response time.
TDS Date
This is the posting date that the system enters in the TDS document (update mode only).
Output
The system displays a list of invoices and specifies whether there are any down payments to be cleared against them.

Activities
In the output list, you can clear an invoice against a down payment as follows:
1. Position the cursor on the invoice that you want to clear the down payment against and choose .
2. Select the down payment that you want to clear.
3. Save the down payment.
The system:
Creates an accounting document to clear the down payment and reduce the vendor liability
Recalculates the withholding tax base amount and the withholding tax amount, based on the amount of the down payment against which the invoice was
cleared.

Note
You can also clear invoices against down payments by first taking a list of all the invoices listed above by choosing . You can then clear them by
choosing Financial Accounting Accounts Payable Document Entry Down Payment Clearing, and then clear each invoice one by one.
By clicking on the document numbers, you can display the document of the TDS posting.
You will have to make a manual FI posting to transfer the amounts from the respective withholding tax accounts (as defined in the withholding tax line
items) to the TDS government payable vendor account. To make the payment to the TDS government payable vendor account, from the SAP Easy
Access screen, choose Accounting Financial Accounting Accounts Payable Document Entry Outgoing Payment Post .

1.1.1.5.1.3 Handling of Credit Memos

Use
This procedure shows you what happens if you post a credit memo against a vendor invoice. If you have already remitted the TDS from the invoice, the credit
memo against that invoice is not considered at all for processing. Otherwise, the system calculates TDS for the amount stated on the credit memo and debits
it from the TDS payable account.

Procedure
1. You post a credit memo, entering with the invoice number as the reference number.
2. You post the TDS in test mode.
3. The system displays a message, telling you to run the program in update mode.
4. You post the TDS in update mode.
The system makes the appropriate posting and displays the number of the credit memo along with the TDS posting document.

1.1.1.5.1.4 Making Down Payments on Invoices Where TDS Has


Been Calculated

Use
If you have withheld TDS on an invoice but not yet remitted it to the government, and the invoice needs to be cleared against a down payment, you have to
adjust the tax amount accordingly.

Prerequisites
You have posted the invoice and the TDS document has been created.

Procedure
1. Clear the down payment against the invoice using the standard clearing transaction.
2. The next time you run the TDS posting program in update mode, the system makes a posting to correct the TDS, by debiting the G/L account
associated with the entered tax code. It also displays the numbers of the down payment clearing document and the TDS document.

1.1.1.5.1.5 Reversing TDS Postings


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1.1.1.5.1.5 Reversing TDS Postings

Use
If you reverse an invoice or down payment that you have already calculated TDS on, you also have to reverse the TDS postings.

Procedure
When you reverse a down payment in the standard, the system automatically reverses the TDS posting. When you reverse an invoice, the system reverses
the TDS posting the next time you run the TDS report in update mode.

1.1.1.5.2.13.1 Remittance Challans

Use
When you have remitted the deducted TDS to the government, you are sent a bank challan confirming that payment has been received. The system allows
you to record the number of the challan in the invoices from which the TDS had been deducted and paid.
You can also use this function to change the challan number or date later on, if necessary.

Features
To access this report, from the SAP Easy Access screen, choose Accounting Financial Accounting Accounts Payable Withholding Tax India
Withholding Tax Enter Remittance Challans .
Selection
The system displays the transactions on which you have withheld TDS. You select the transactions for which you have remitted the TDS, enter the challan
details. The system then records the challan number in each of the transactions.
If you need to change a challan number or date, enter the challan number and date that is to be changed.
The actual TDS amount and the surcharge on this TDS amount are shown separately.
To handle cases where the company needs to have many TAN numbers, you can enter the TAN number when you update the challan number. This number
will be used subsequently for the certificates.

1.1.1.5.1.7 Print Certificates

Use
You use this program to print TDS certificates for your vendors (individually or in batches). It covers the TDS in all the invoices and down payments that you
have posted over a specified period.
To access the program, from the SAP Easy Access screen, choose Accounting Financial Accounting Accounts Payable Withholding Tax
India Withholding Tax Certificates Print Vendors .

Note
There is a separate print program for one-time vendors, which you can access from the SAP Easy Access screen, by choosing Accounting
Financial Accounting Accounts Payable Withholding Tax India Withholding Tax Certificates Print One-Time Vendors .

Prerequisites
You have already remitted the TDS to the government and recorded the challan number in the transactions concerned (see Update of Challans ). Only
transactions with a challan number can be included in certificates.
The certificate printing program uses SAPscript form J_1ITDSCERT. If there are some changes in the certificate format this layout set can be changed
accordingly.
If the certificates are to be divided by business area, with a unique number range per business area, you must have maintained the sections as a combination
of section and business area, so for business area 0001 and section 194C, you could maintain the section as 194C0001, for example.

Features

Selection
Enter data as required, including:
The dates of the transactions that are to be covered in the certificate
Withholding tax section

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Caution
If you enter the business area in combination with the section, it must also be used in all other transactions involving this certificate, including
quarterly returns.

Output
If you select the preview option, the system displays a certificate without any certificate number. The number will be assigned only when the certificate is
actually printed directly (not from the print preview).
A summary of all the certificates is printed at the end, summarized by certificate and challan number.

1.1.1.5.1.8 Reprint Certificates

Use
You use this program to reprint TDS certificates.
To access the program, from the SAP Easy Access screen, choose Accounting Financial Accounting Accounts Payable Withholding Tax India
Withholding Tax Certificates Reprint .

Features
Selection
On the selection screen, enter the numbers of the certificates that you want to reprint and the details of the signatory.
Output
The system prints the certificates. Each certificate is marked as a duplicate.

1.1.1.5.1.9 Cancel Certificates

Use
You use this program to cancel TDS certificates.
To access the program, from the SAP Easy Access screen, choose Accounting Financial Accounting Accounts Payable Withholding Tax India
Withholding Tax Certificates Cancel .

Features
Selection
Enter data as required, including the number of the certificate that you want to cancel.
Output
The system marks the certificate as canceled. It does not delete it from the database.

1.1.1.5.1.10 Archiving of TDS Documents

Use
You use these functions to archive documents for tax deducted at source (TDS). For more information about archiving, see Introduction to Data Archiving .

Prerequisites
Before you can archive this data, you must have archived the related data form Financial Accounting (FI) and Material Management (MM).

Features
The TDS documents are archived using archiving object J_1ITDS, which is supplied with Country Version India (CIN). It is used for archiving the data in tables
J_1ITDS and J_1ICERTIF.
Once you have archived the TDS documents , you must delete the originals from the database. Once you have deleted the originals, you can reload them
from the archive file. Finally, you can also analyze them.

1.1.1.5.1.10.1 Archiving TDS Documents


1. From the SAP Easy Access screen, choose Accounting Financial Accounting Accounts Payable Withholding Tax India Withholding
Tax Utilities Archive Documents .

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2. In the Object Name field, the system displays the name of the archiving object, J_1ITDS.
3. Choose Archive .
4. Enter data as follows:
Variant
Enter the report variant that you want to use. You can create a variant if you need to.
User Name
Enter the name of user who will archive the data.

1. To specify when to start the report, choose Start Date .


2. To enter the print parameters, choose Spool Params .
3. Choose .

1.1.1.5.1.10.1.1 Creating an Archive Report Variant


1. Choose Maintain .
2. Enter a variant name of your choice.
3. Choose Create .
4. Specify which certificates you want to archive and enter other data as required:
Create
Specifies that the program will run in update mode.
Delete in test mode
Select this for test runs.
Package
Enter the optimum package size.
Comments
Enter any comments for your own reference.

1. Choose Attributes .
2. Enter data as required.
3. Save the variant.
4. Go back to the Archive Management: Create Archive Files screen.

1.1.1.5.1.10.2 Deleting TDS Documents


1. From the SAP Easy Access screen, choose Accounting Financial Accounting Accounts Payable Withholding Tax India Withholding
Tax Utilities Archive Documents .
2. In the Object Name field, the system displays the name of the archiving object, J_1ITDS.
3. Choose Delete .
4. In the User Name field, enter the name of user who will delete the documents.
5. Select Test Run if you do not want to run the report in update mode.
6. This will report any inconsistencies between the table data and the archive file that can be fixed.
7. To specify what archive file you want to delete the documents for, choose Archive selection .
8. To specify when to start the report, choose Start Date .
9. To enter the print parameters, choose Spool Params .
10. Choose .

1.1.1.5.1.10.3 Reloading TDS Documents


1. From the SAP Easy Access screen, choose Accounting Financial Accounting Accounts Payable Withholding Tax India Withholding
Tax Utilities Archive Documents .
2. In the Object Name field, the system displays the name of the archiving object, J_1ITDS.
3. Choose Reload .
4. Enter data as follows:
Variant
Enter the report variant that you want to use. You can create a variant if you need to.
User Name
Enter the name of user who will reload the data.

1. To specify what archive file you want to reload the documents from, choose Archive Selection .
2. To specify when to start the report, choose Start Date .
3. To enter the print parameters, choose Spool Params .
4. Choose .

1.1.1.5.1.10.4 Archive Overview

Use
You use this report to find out where you have archived a tax deducted at source (TDS) document.

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Features
Selection
On the selection screen, you specify which TDS documents you want to view. You can make your selection by vendor, business area, and TDS certificate
number.

Activities
To access the report, from the SAP Easy Access screen, choose Accounting Financial Accounting Accounts Payable Withholding Tax India
Withholding Tax Utilities View Archived Documents .

1.1.1.5.1.11 Transaction Codes for Classic Withholding Tax


Transaction Code Action

J1INC Post withholding tax on invoices

J1I8 Enter remittance challans

J1ICCERT Print withholding tax certificates for vendors

J1ICOTV Print withholding tax certificates for onetime vendors

J1ICREP Reprint withholding tax certificates

J1ICCAN Cancel withholding tax certificates

J1INQEFILE Prepare TDS returns

J1IHBK Copy bank IDs from invoice to TDS document

J2ID Archive TDS documents

J2IE Display archived TDS documents

1.1.1.5.2 Extended Withholding Tax

Use
Country Version India contains a number of features that complement the generic Extended Withholding Tax solution. For information about the generic
functions, see Extended Withholding Tax . The country-specific features are described in the following documentation.

Features
Using the Extended Withholding Tax solution, you can withhold and report tax under all sections of the Income Tax Act listed in Withholding Tax .
Since a company may consist of more than one entity responsible for withholding taxes, each of which is identified by a separate TAN, you use a separate
SAP organizational unit to represent each entity, the section code.

Activities

Customizing
For generic information about customizing Extended Withholding Tax, see Settings for Extended Withholding Tax: Overview .
Country Version India comes with sample Customizing settings for all of the aforementioned sections of the Income Tax Act. The settings include:
Withholding tax types
Withholding tax codes
Official withholding tax keys, which represent the different sections of the Income Tax Act
Recipient types, which represent the categorization of taxpayers into "companies" and "others," again, as per the Income Tax Act
You must also customize your own section codes.

Master Data
Enter the required information in the vendor masters and in the customer masters.

Day-to-Day Activities
You are required to calculate taxes either when you enter an invoice or when you make any sort of payment, whichever comes first. Since a full payment is
seldom made before the invoice arrives, that means in effect that you withhold taxes when you enter an invoice or a down payment.
When you enter a vendor invoice or make a down payment that is liable to withholding tax, the system automatically creates line items for the appropriate
taxes, including surcharges. Since different taxes need to be remitted on different dates, depending on the section of the Income Tax Act, the system also
calculates and records each line item's due date.
If you first make a down payment (and withhold tax on it) and then enter the vendor invoice later on, you have to clear the invoice against the down payment
so that you do not withhold tax on the same item twice.

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As far as your receivables are concerned, you also enter withholding tax certificates sent to you by your customers, as proof of tax that they have withheld on
payments to you.

Periodic Processing
At the end of each period, you make provisions for taxes on services received.
The authorities in India require you to remit taxes following a specific procedure. First, you create a remittance challan with a list of the withholding tax items
that you are remitting. You then send the challan to the authorities, along with the check. Once the check has been cashed, the bank sends you a bank
challan to confirm the payment. You then enter the bank challan in the system.
The system automatically tracks each withholding tax item's remittance challan and bank challan.
When you have remitted the tax, you can print out withholding tax certificates for all taxes that you have withheld, using functions specific to Country Version
India.
Before you create your quarterly returns, you can also check for any customers that have not yet sent you a withholding tax certificate for tax that they have
withheld from you.
Again, with receivables, if you make interest payments to your customers, you must also withhold tax on them as appropriate.

Reporting
Country Version India offers a report that you can use to prepare quarterly returns, and a Withholding Tax Information System for tracking and reporting
purposes.
See also:
Accounts Payable (FI-AP)
Accounts Receivable (FI-AR)

1.1.1.5.2.1 Section Code

Definition
A field that represents the organizational unit responsible for collecting and remitting withholding tax, as identified by a tax account deduction number(TAN) in
India .
In Financial Accounting (FI), you identify an income tax reporting location with a section code.

Use

Features
If a company operates in more than one location, the income tax officer of the given location assigns a TAN to it.
Since you need to report your withholding tax to the income tax department, you must enter the corresponding TAN in the Section Code field for each local
income tax office in the extended withholding tax processing.
In Financial Accounting (FI), you use the section code directly in postings.
In the contract account master data of Contract Accounts Receivable and Payable (FI-CA), you cannot specify a section code. You must specify the
business place (for sales tax office) in Customizing instead to determine the section code.
In Flexible Real Estate Management (RE-FX), you maintain section codes for your real estate object (business entity, building, property), and not for
contracts.

Customizing
Define section codes in Customizing for Financial Accounting (FI), by choosing Financial Accounting Global Settings Withholding Tax Extended
Withholding Tax Basic Settings India Define Section Codes .

Day-to-Day Activities
When you post a document with a withholding tax item (for example, in a vendor invoice or in a credit memo), enter the section code in order to make sure that
the tax item is assigned to the correct TAN. For more information, see Entering Vendor Invoices .
In order to ensure that you always enter a section code, we recommend that you create a validation for this field.

Periodic Processing
When you print withholding tax certificates , each of your section codes can have its own forms, depending on what is required by the income tax office. The
certificate supplied with the standard system also shows the address data from the section code.

Reporting
Each TAN holder files its own tax returns. When you prepare a TDS return , you enter the TAN holders section code on the selection screen. The quarterly
returns then show only the withholding tax items that are assigned to that section code.

1.1.1.5.2.2 Withholding Tax Type

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Definition
See withholding tax type . For generic information about withholding tax types, see Defining Withholding Tax Types .

Use
Customizing
You define withholding tax types in Customizing for Financial Accounting (FI), by choosing Financial Accounting Global Settings Withholding Tax
Extended Withholding Tax Calculation Withholding Tax Type Define Withholding Tax Type for Invoice Posting and Define Withholding Tax
Type for Payment Posting .
Country Version India comes with one set of sample withholding tax types for calculating tax at invoice posting and another one for calculating tax at payment
posting. Both sets contain two separate tax types for each of the supported sections of the Income Tax Act (see Extended Withholding Tax ), one for basic-
rate tax and one for the surcharge.
All of the withholding tax types are customized so that certificate numbers are not assigned at this level. They are assigned by the programs that you use for
printing the withholding tax certificates instead.
When you have defined the withholding tax types, define the withholding tax codes and recipient types.
Master Data
Assign the appropriate withholding tax types to your vendor masters and customer masters.
Day-to-Day Activities
When you enter a document that is liable to tax (for example, when you enter a vendor invoice ), the system automatically applies the tax type and tax code
appropriate to that vendor or customer.
See also:
Accounts Payable (FI-AP)
Accounts Receivable (FI-AR)

1.1.1.5.2.3 Withholding Tax Code

Definition
For generic information about withholding tax codes, see Defining Withholding Tax Codes .

Use

Customizing
Define the withholding tax codes in Customizing for Financial Accounting (FI), by choosing Financial Accounting Global Settings Withholding Tax
Extended Withholding Tax Calculation Withholding Tax Codes Define Withholding Tax Codes .
Country Version India comes with a sample tax code for each of the sample withholding tax types provided. The basic-rate withholding tax codes are set to
2%; the surcharge tax codes are set to 0.4%.
For reporting purposes, assign each withholding tax code to a withholding tax key .
Observe the special procedures when you customize withholding tax codes for Section 194 A of the Income Tax Act (see Exemptions and Reduced Rates for
Section 194 A ).
You must use withholding tax codes with posting indicator 1, otherwise you cannot clear down payments against invoices or remit withholding taxes.

Master Data
Assign the appropriate withholding tax codes to your vendor masters and customer masters.

Day-to-Day Activities
When you enter a document that is liable to tax (for example, when you enter a vendor invoice ), the system automatically applies the tax type and tax code
appropriate to that vendor or customer.
See also:
Accounts Payable (FI-AP)
Accounts Receivable (FI-AR)

1.1.1.5.2.4 Withholding Tax Key

Definition
A system object that you use to classify withholding tax items according to which section of the Income Tax Act they belong to. This information is required in
TDS returns.

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Use

Customizing
Check the withholding tax keys provided in Customizing for Financial Accounting (FI), by choosing Financial Accounting Global Settings Withholding
Tax Extended Withholding Tax Basic Settings Define Withholding Tax Keys .
Assign an official withholding tax key to each withholding tax code .

Day-to-Day Activities
Whenever you post a withholding tax item, assign it a withholding tax code as normal. Since each withholding tax code is also assigned to an withholding tax
key, the system automatically knows which section of the Income Tax Act you have withheld the tax under.

Reporting
When you prepare a TDS return , it shows which section of the Income Tax Act you withheld each item under.

1.1.1.5.2.5 Recipient Type

Definition
A system object that you use to classify payment recipients as legal persons or natural persons, for the purposes of withholding tax reporting.

Use

Customizing
Define the recipient types in Customizing for Financial Accounting (FI), by choosing Financial Accounting Global Settings Withholding Tax Extended
Withholding Tax Basic Settings Check Recipient Types .
For each withholding tax type, create two entries as follows:

Recipient Type Text

CO Companies

OT Others

Country Version India comes with sample settings for the sample withholding tax types provided.

Master Data
Enter the recipient type in each vendor master and each customer master .

Reporting
The TDS returns separate the information about taxes withheld on legal persons and on natural persons.

1.1.1.5.2.6 Exemptions and Reduced Rates for Section 194 A

Use
Under Section 194 A of the Income Tax Act, you withhold tax on interest payments that you make, with the exception of interest on securities. You declare
such taxes withheld using form 26A.
However, some payments are exempt from withholding tax, and on others, you only have to withhold tax at a reduced rate for example, if the recipient of the
payment is a bank or is a company in possession of an exemption certificate.
When you prepare your annual return, you have to declare how much interest you have paid to companies without withholding tax or with reduced-rate tax.

Activities

Customizing
Define separate withholding tax codes for calculating withholding taxes at the reduced rates and for exemptions.
Make the additional settings for the withholding tax codes in Customizing for Financial Accounting (FI), by choosing Financial Accounting Global Settings
Withholding Tax Extended Withholding Tax Calculation Exemptions and Reductions .

Master Data

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Enter the appropriate withholding tax codes in your customer masters and vendor masters as normal. Do not enter any exemption reasons.

Day-to-Day Activities
Whenever you post a withholding tax item that falls under this section of the Income Tax Act, make sure that you use the appropriate tax code.

Reporting
When you create a TDS return, it shows how many rupees worth of business you have taxed at a reduced rate, and how much was exempt from tax.

Exemptions and Reduced Rates Under Sections 197 and 197A

Use
Under sections 197 and 197A of the Income Tax Act, the Income Tax Department can grant companies exemptions from having tax withheld from payments
to them, or reduce the withholding tax rates.
You need to record this information in the system and report it in TDS returns.

Activities

Customizing
Define separate withholding tax codes for calculating withholding taxes at the reduced rates and for exemptions.
Make the additional settings for the withholding tax codes in Customizing for Financial Accounting (FI), by choosing Financial Accounting Global Settings
Withholding Tax Extended Withholding Tax Basic Settings India Exemptions and Reductions .

Master Data
Enter the appropriate withholding tax codes in your vendor masters as normal. Do not enter any exemption reasons.

Reporting
When you prepare a TDS return, it shows how many rupees worth of business you have taxed at a reduced rate, and how much was exempt from tax.
See also:
Withholding Tax Code
Vendor Master (Withholding Tax Data)
TDS Returns

1.1.1.5.2.8 Surcharges

Use
As well as withholding tax on payments to vendors, in India, you may also be required to withhold a surcharge.

Features
Some tax offices require you to track surcharges separately from the basic withholding tax, that is, to create separate line items for the surcharges. Others
prefer you to combine the two in a single line item. The system supports both calculation methods.

Activities

Customizing
Set up the surcharge function in Customizing for Financial Accounting (FI), by choosing Financial Accounting Global Settings Withholding Tax
Extended Withholding Tax Basic Settings India Surcharges .
Create withholding tax types and withholding tax codes for the surcharges. The standard system comes with samples for both.

Day-to-Day Activities
When you enter a vendor invoice, the system automatically calculates any surcharges that apply. It either creates one withholding tax item or two, depending
on how you have customized the system.
The following examples assume that the surcharge is 2% of the basic-rate withholding tax:

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Vendor Invoice with Surcharges Shown Separately

Vendor Invoice with Surcharges Combined with Other Withholding Tax Items

Reporting
No matter which of the calculation methods you use, TDS returns show the surcharges separately.

1.1.1.5.2.9 Tax Due Dates

Use
When you enter a vendor invoice, the SAP system automatically determines what date you have to remit the withholding tax to the tax office and records it in
the tax line item.

Features
There are several factors that influence the tax due date, all of which you can customize:
Which section of the Income Tax Act the tax is from (represented in the SAP system by the official withholding tax key)
Whether the vendor is classified as a company or not (in the system, the recipient type)
In the event of the tax being due on a public holiday, whether the tax office requires you to remit the tax a day earlier or a day later

Activities

Customizing
Set up the due dates in Customizing for Financial Accounting (FI), by choosing Financial Accounting Global Settings Withholding Tax Extended
Withholding Tax Basic Settings India Maintain Tax Due Dates .
In Customizing for FI, under Financial Accounting Global Settings Withholding Tax Extended Withholding Tax Basic Settings India Assign
Factory Calendars to Section Codes, specify whether, in the event of the due date falling on a public holiday, you must remit the tax on the day before or
the day after.

Day-to-Day Activities
When you enter a vendor invoice, the system automatically determines the tax due date and enters it in the tax line item.

Periodic Processing
When you come to create a remittance challan to remit the withholding tax, the system uses the tax due date.

1.1.1.5.2.10 Withholding Tax on Interest Payments to Customers

Use
Under Section 194 A of the Income Tax Act you are required to withhold tax on interest payments that you make to customers.
To calculate the interest, use the Balance Interest Calculation program, which calculates the interest and the amount of tax to be withheld.

Activities

Customizing
You have made the settings for interest calculation in Customizing for Financial Accounting (FI), by choosing Accounts Receivable and Accounts

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Payable Business Transactions Interest Calculation .

Periodic Processing
Execute the program as described in the documentation.
There are two types of output. The system either creates a batch input session, which you can process, or it displays the details of the interest to be posted,
which you can post manually. In both cases, you must ensure that each customer line item contains a section code .
The program creates an accounting document as follows:

It copies the section code from the customer line item to the withholding tax item, and calculates the tax due date (see Tax Due Dates ).

1.1.1.5.2.11 Journal Vouchers

Use
If, after you have entered and cleared a vendor invoice and you have discovered that you have posted the wrong amount of tax or that you have posted the tax
using the wrong official tax key, you have to enter a journal voucher (JV) to correct the error.
To access the function, from the SAP Easy Access screen, choose Accounting Financial Accounting Accounts Payable Withholding Tax India
Extended Withholding Tax Journal Vouchers Enter .

Prerequisites
You have maintained the settings in Customizing for Financial Accounting (FI), by choosing Financial Accounting Global Settings Withholding Tax
Extended Withholding Tax Postings India Journal Vouchers .

Features
You only need to create JVs to adjust withholding tax items and vendor items that you have already cleared. Otherwise, you can reverse the original document
using the generic functions.
You do not need to adjust a tax item if you have already issued a withholding tax certificate for it and the vendor has accepted it, since, in this case, the
vendor can use this certificate to claim a refund from the tax authorities.
When you enter a journal voucher, the system creates an accounting document as follows:

Type of change Debit Credit

Tax refund to vendor (tax already remitted) Loss account Vendor account

Tax refund to vendor (tax not yet remitted) Tax payable account Vendor account

Tax increase, payable by vendor Vendor account Tax payable

If you have already remitted the tax to the tax office and you change the tax code so that it uses a different official withholding tax key, the system makes a
second posting to correct the tax under the right tax key. This posting debits the loss account and credits the tax expense account.
See also:
Entering Journal Vouchers

1.1.1.5.2.11.1 Entering Journal Vouchers


1. In the Document Number field, enter the invoice number.
2. Enter other data as required and choose Check .
3. Depending on what you want to change, choose Amount Correction or Tax Code Correction .
4. Change the tax amount to the correct amount, or change the tax code.
5. To check what adjustment posting will be made, select the line item that you have changed and choose Simulate .
6. Save the journal voucher.

1.1.1.5.2.12 Provisions for Taxes on Services Received

Purpose
In India, when you come to prepare your financial statements, you are required to make an adjustment entry for any accrued withholding taxes.
That means that if, when you prepare your statements, a vendor has provided you with some services but not yet sent you an invoice, you make an
adjustment entry for the taxes that you will withhold on the vendor payment. When you make the entry, you must take into account any tax that you have
already withheld on any down payments that you have made.
Once the vendor sends the invoice, you reverse the provision.

Prerequisites

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In Customizing for Financial Accounting (FI), you have made the settings under Financial Accounting Global Settings Withholding Tax Extended
Withholding Tax Postings India Provisions for Taxes on Services Received .

Process Flow
1. A clerk enters a purchase order for services to be provided.
2. A vendor provides you with some services on 25 January, and the clerk enters the service receipt in the system accordingly.
3. The system then automatically creates the following accounting document:

4. At month-end, the vendor has not sent you an invoice. You will be required to withhold tax on the payment, so you enter a provision for the withholding
tax.
5. The system creates an accounting document as follows:

You can now prepare your financial statements correctly.


6. On 7 February, the vendor sends you the invoice, and you enter it in the system .
7. When you enter the invoice, the system automatically calculates how much tax you have to withhold when you pay the vendor. It does not clear the
provision against the invoice, so at this moment your accounts are actually incorrect, because they have two entries for the same amount of withholding
tax.

8. In the evening, you reverse the provision .


The system creates the following accounting document:

By reversing the provision, you put your accounts in order again.

1.1.1.5.2.12.1 Entering Provisions

Procedure
1. On the SAP Easy Access screen, choose Accounting Financial Accounting Accounts Payable Withholding Tax India Extended
Withholding Tax Provisions for Tax on Services Received Enter.
2. Enter the following information:
Organizational data, such as company code and financial year
The G/L accounts that you want to post provisions for
Other information relating to the items that you want to adjust (for example, vendors or purchase orders)
Information relating to the posting document that the system will make the tax postings with
3. Choose ( Execute ).
A list appears, which shows you per purchase the following:

Column Information

Open amount The total amount of all services received that have yet to be invoiced,
irrespective of whether you have already calculated tax on them

Open provision The amount from goods receipts that you have already calculated tax on

LC bas.amt (Base amount in local currency) The amount on which tax still has to be calculated

4. You now have to specify how much tax has to be withheld. For each purchase order:
1. Enter the tax type and tax code of the tax that has to be applied.
You can enter up to four tax types and tax codes. Use invoice tax types only.
2. Enter the section code.
3. Enter the business area, if required.
4. If you have made a down payment on the purchase order, reduce the tax base amount by this amount.
5. When you have entered all the data, save it.

1.1.1.5.2.12.2 Reversing Provisions

Use
Follow this procedure to reverse provisions that you have made for taxes on services rendered. You can only reverse the provisions for invoices that you have
received since you posted the provision.

Recommendation
We recommend that you run this program every night in the background, in order to avoid discrepancies in your data.

Procedure
1. From the SAP Easy Access screen, choose Accounting Financial Accounting Accounts Payable Withholding Tax India Extended
Withholding Tax Provisions for Tax on Services Received Reverse .
2. On the selection screen, enter:
Organizational data, such as the company code

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The posting date of the invoices
The posting period

1. Choose .

1.1.1.5.2.13 Remittance of Withholding Tax

Purpose
You are required to follow a specific procedure when remitting withholding tax to the authorities.

Prerequisites
Before you remit your withholding tax, you must have entered any provisions for taxes on services received.

Process Flow
1. When the time comes to remit a given sort of tax (see Tax Due Dates ), you create a remittance challan.
The system creates an accounting document to transfer the withholding tax items to the appropriate bank account.
2. You send the challan to your bank with a check for the appropriate amount.
3. After a few days, the bank sends you a bank challanto confirm that it has received your check.
4. You enter the bank challan in the system.
When you do so, the program records the bank challan number in every withholding tax item remitted. This information may be required in order to
substantiate your accounts.

Result
You can create withholding tax certificates for the withholding tax items that you have remitted.

1.1.1.5.2.13.1 Remittance Challans

Use
The system allows you to create and cancel remittance challans for payables and receivables.

Prerequisites
You have made the Customizing settings in Customizing for Financial Accounting (FI), by choosing Financial Accounting Global Settings Withholding
Tax Extended Withholding Tax Postings India Remittance Challans .

Features

Accounting Documents
When you create a remittance challan, the system identifies which withholding tax items need to be remitted (see Tax Due Date ).
It then creates an accounting document to clear these items from the withholding tax payable account to the bank account that you want to transfer the tax
from.

Challan Numbers
The system generates separate remittance challans for each tax office ( section code ) and each section of the Income Tax Act ( withholding tax key ) and
numbers each one accordingly. It records the challan number in the withholding tax items for future reference, although you cannot display it directly from any
of the system transactions.

Constraints
The programs do not cover part payments of tax items or residual payments.

1.1.1.5.2.13.1.1 Creating Remittance Challans


1. To access the programs, on the SAP Easy Access screen, choose Accounting Financial Accounting Accounts Payable Withholding Tax
India Extended Withholding Tax Remittance of Withholding Tax Create Remittance Challan or Accounting Financial Accounting
Accounts Receivable Withholding Tax India Withholding Tax for Payments to Customers Remittance of Withholding Tax Create
Remittance Challans.
2. On the selection screen, enter the following data:
Organizational data, such as company code and section code (TAN)

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Which withholding tax items you want to remit
We recommend that in order to get the most accurate selection, you enter a payment due date.
If you need to restrict the selection to a specific vendor or customer, for example, if you want to remit the tax for government bodies only, you can
do so.
Tax remittance information, including any charges made by your bank for accepting the check
3. Choose .
The system calls the standard incoming (customer) or outgoing (vendor) payment program, which presents you with a selection of tax line items for
clearing.

Recommendation
To make it easier for you to select the open items, we recommend that you create a line layout that includes the following fields:
Value Date (tax due date)
Section Code
Reference Key 3 (tax code and recipient type information)
Text (information on down payment clearing tax transfer)

4. Activate the items that you want to remit and make a note of the total in the Assigned field.
5. Choose .
The system displays an overview of the line items created so far, including any bank charges that you have entered, and an offsetting posting to deduct
your bank account.
6. Double-click the credit entry for your bank account.
7. Change the amount so that it matches the total line items (from step 3) plus the bank charges.
8. Choose Document Simulate .
The system goes back to the line item overview.
9. To update the overview, choose Document Simulate .
10. Save the document.
The program displays a list with the details of the challan numbers generated and the tax remitted. Basic withholding tax and surcharges are listed
separately.

1.1.1.5.2.13.1.2 Canceling Remittance Challans

Purpose
If for any reason an error occurs when you create a remittance challan, you use this function to cancel the challan and reverse the accounting document. This
function does not work, however, if you have already entered the bank challan (see Entering Bank Challans ).

Procedure
1. From the SAP Easy Access screen, choose Accounting Financial Accounting Accounts Payable Withholding Tax India Extended
Withholding Tax Remittance of Withholding Tax Cancel Remittance Challan or Accounting Financial Accounting Accounts Receivable
Withholding Tax India Withholding Tax for Payments to Customers Remittance of Withholding Tax Cancel Remittance Challan .
2. Specify which accounting document you want to reverse. This is the accounting document that the system created when you created the remittance
challan.
3. Choose .
4. The system prompts you to specify what sort of reversal you want to make.
5. Choose Resetting and Reverse .
6. Enter a reversal reason and choose .
The system displays two dialog boxes, one with the number of the document posted. After you have closed the dialog box, you go back one screen to display
a list of the documents that you have reversed.

Result
The system:
Cancels the remittance challan
Creates an accounting document to reverse the postings made when you create the remittance challan

1.1.1.5.2.13.2 Entering Bank Challans

Purpose
When the bank sends you a bank challan, you enter the bank challan in the system. The system stores the bank challan number in all remitted withholding tax
items by way of proof that you have remitted the tax.

Procedure
1. On the SAP Easy Access screen, choose Accounting Financial Accounting Accounts Payable Withholding Tax India Extended
Withholding Tax Remittance of Withholding Tax Enter Bank Challan or Accounting Financial Accounting Accounts Receivable
Withholding Tax India Withholding Tax for Payments to Customers Remittance of Withholding Tax Enter Bank Challan .
2. Enter data as required, including:

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Organizational data, such as your company code
Remittance challan number
Bank challan details
3. Choose .

Result
The system:
Records the bank challan details in the remitted withholding tax items
This information will be included in the vendor withholding tax certificates when you print them.
Displays a list of the updated items

1.1.1.5.2.14 Withholding Tax Certificates for Vendors and


Customers

Use
You must present your vendor or customer with a withholding tax certificate within 60 days of the business transaction.
You do not use the generic programs for printing withholding tax certificates. Instead, Country Version India offers two programs that you can use to print
withholding tax certificates, one for vendors and one for customers.

Prerequisites
You can only print the certificates once you have remitted the tax in question and entered the bank challans . Any other tax items will not be included in the
certificates.

Features

Certificates
The programs print a separate certificate for each vendor or customer. Each certificate shows all the withholding tax items belonging to that vendor of
customer. The items are listed according to their bank challan number, as required by law.
The program numbers the certificates, but only when you print the certificates directly, not in the print preview.
If you have had dealings with the same vendor or customer in more than one tax jurisdiction (tax office), the system prints a separate certificate for each tax
office. The system allows you to print out the certificates on different SAPscript forms for every tax office and every section of the Income Tax Act, if
required.

Credit Memos, Down Payments


The system deducts credit memos and down payments from the invoices that they belong to, if such information is available.

One-Time Accounts
For one-time vendors or one-time customers, only one business transaction is printed. The address details are taken from the appropriate document for the
vendor or customer.
Separate programs are available for reprinting and canceling vendor and customer certificates.

Activities

Customizing
Make the Customizing settings for the programs in Customizing for Financial Accounting (FI), by choosing Financial Accounting Global Settings
Withholding Tax Extended Withholding Tax Postings India Withholding Tax Certificates for Vendors and Customers .
Since you do not need the generic programs for printing withholding tax certificates, ignore the generic Customizing activities.
Deactivate certificate numbering in the withholding tax types .

Master Data
Maintain your section codes ' address data, and maintain your customers' and vendors' PANs(see Vendor Master (Country Version India Data) and Customer
Master (Country Version India Data) ). This data will be printed out on the certificates.

Periodic Processing
You print vendor withholding tax certificates and customer withholding tax certificates once monthly or once annually as required.
If necessary, you can reprint and cancel withholding tax certificates for your vendors and for your customers.

1.1.1.5.2.14.1 Print Vendor Withholding Tax Certificates


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1.1.1.5.2.14.1 Print Vendor Withholding Tax Certificates

Use
You use this program to print out withholding tax certificates for vendors.
To access the program, on the SAP Easy Access screen, choose Accounting Financial Accounting Accounts Payable Withholding Tax India
Extended Withholding Tax Withholding Tax Certificates Print .

Features

Selection
On the selection screen, enter the following data:
Organizational information, for example, your company code
The section code and withholding tax key that you want to create forms for
Details of the bank challans that you want to cover
Information that is to appear on the certificates

Output
The program:
Prints out the certificates, numbered consecutively
Displays a list of all the certificates printed, grouped by certificate, challan, and section code

1.1.1.5.2.14.2 Print Customer Withholding Tax Certificates

Use
You use this program to print out withholding tax certificates for customers.
To access the program, on the SAP Easy Access screen, choose Accounting Financial Accounting Accounts Receivable Withholding Tax
India Withholding Tax for Payments to Customers Withholding Tax Certificates Print .

Features

Selection
On the selection screen, enter the following data:
Organizational information, for example, your company code
The section code and withholding tax key that you want to create forms for
Details of the bank challans that you want to cover
Information that is to appear on the certificates

Output
The program:
Prints out the certificates, numbered consecutively
Displays a list of all the certificates printed, grouped by certificate, challan, and section code

1.1.1.5.2.14.3 Reprint Vendor Withholding Tax Certificates

Use
You use this program to reprint withholding tax certificates for vendors.
Note that you can only reprint one certificate at a time.
To access the program, from the SAP Easy Access screen, choose Accounting Financial Accounting Accounts Payable Withholding Tax India
Extended Withholding Tax Withholding Tax Certificates Reprint .

Features

Selection
On the selection screen, enter data as follows:
The company code

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The number and date of the original certificate

1.1.1.5.2.14.4 Reprint Customer Withholding Tax Certificates

Use
You use this program to reprint withholding tax certificates for customers.
To access the program, from the SAP Easy Access screen, choose Accounting Financial Accounting Accounts Receivable Withholding Tax
India Withholding Tax for Payments to Customers Withholding Tax Certificates Reprint.

Features

Selection
On the selection screen, you enter the following data in the Certificate Details group box:
The company code
The fiscal year
The number and date of the original certificate
The withholding tax key
In the Reprint Details group box you specify data that is to appear on the certificate.

1.1.1.5.2.14.5 Cancel Vendor and Customer Withholding Tax


Certificates

Use
You use this program to cancel withholding tax certificates for vendors or customers.
To access the program, from the SAP Easy Access screen, choose Accounting Financial Accounting Accounts Receivable Withholding Tax
India Withholding Tax for Payments to Customers Withholding Tax Certificates Cancel or Accounting Financial Accounting Accounts
Payable Withholding Tax India Extended Withholding Tax Withholding Tax Certificates Cancel .

Features

Selection
On the selection screen, you enter data as follows:
In the Business Place/Section Code Selection group box, you define the classification type of the certificates you want to cancel, that is, whether the
certificates to be cancelled have been classified based on section code or business place
In the Certificate Details group box, you enter the following data:
Company code
Withholding tax key
The number and date of the original certificate

1.1.1.5.2.14.6 Maintenance of Acknowledgement Numbers

You use this transaction to maintain the acknowledgement numbers from production clients in the Acknowledgement numbers for quarterly returns filed
(J_1IEWT_ACKN) application table.

Acknowledgement number is a unique series of digits that is provided by the Indian government once the quarterly returns are filed. For each of the forms
pertaining to TDS orTCS, only one acknowledgment number is provided every quarter. This acknowledgement number is then printed on the withholding tax
certificates.
To access this transaction, on the SAP Easy Access screen, choose Accounting Financial Accounting Accounts Payable Withholding Tax
India Extended Withholding Tax Certificates Maintain Acknowledgement Number .

Activities
You can make the following settings in this transaction:
Enter the company code and the fiscal year for filing the quarterly returns.
Enter the section code that identifies under which TAN the item was posted.
Assign it to the relevant form type.
Assign a period to this form type that identifies the quarter for which the acknowledgement number is generated.

1.1.1.5.2.15 Withholding Tax Certificates from Customers

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Use
You use this program to enter the withholding tax certificates sent to you by your customers.
When you enter a certificate, the system clears the withholding tax to a G/L account that records how much tax your customers have withheld on your behalf,
known as the customer tax creditable account. You can offset this tax against your income tax payable at year-end.
You run the program immediately you receive a certificate from a customer.
To access the program, from the SAP Easy Access screen, choose Accounting Financial Accounting Accounts Receivable Withholding Tax
India Tax Withheld by Customers Enter Certificate .

Prerequisites
You have maintained the settings in Customizing for Financial Accounting (FI), by choosing Financial Accounting Global Settings Withholding Tax
Extended Withholding Tax Postings India Withholding Tax Certificates from Customers .

Features
Selection
On the selection screen, enter the following data:
Your company details
In the Section field, enter the official withholding tax key that you use for the section of the Income Tax Law in question.
The numbers or posting dates of the documents that you want to clear
The certificate date serves as the posting date and the document date.
The information from the certificate
When you execute the program, the system takes you to the standard clearing program . You then select which withholding tax line items are to be cleared .
Output
The system creates an accounting document to transfer the withholding tax from the G/L account for the withholding tax deducted by your customers to the
customer tax creditable account.

Activities
If you need to reverse the clearing document, you can do so using the standard reversal program.

1.1.1.5.2.15.1 Selecting Which Line Items to Clear


1. On the Post with Clearing: Process Open Items screen, choose .
2. Double-click the line item.
3. In the Amount field, enter the amount of withholding tax as specified on the tax certificate.
4. Save the change.
5. The system automatically goes back to the Post with Clearing: Process Open Items screen.
6. Double-click the amounts that you want to clear.
7. Save your entries.

1.1.1.5.2.16 Withholding Tax Information System

You use this report to display documents that have withholding tax line items that are classified based on different filter criteria. The Withholding Tax
Information System report covers various stages of the withholding tax process, right from tax deducted at source to generation of certificates.

Note
The report displays the documents on a monthly basis as well as on a quarterly basis.

Prerequisites
You have maintained the section codes specifically for quarterly returns in Customizing for Financial Accounting (New) , by choosing Financial Accounting
Global Settings (New) Withholding Tax Extended Withholding Tax Basic Settings India Define Section Codes .

Features
On the selection screen, enter the following details:
In the Company Details group box, enter the company code and the fiscal year.
In the Period group box, enter either the month or the period.
In the Customer/Vendor group box, you can enter either the vendor or the customer. If you specify the vendor, you can select either the Vendor Docs
with 100% Exemp. checkbox or the Vendor (without PAN) Docs. checkbox or both.
In the Report Selection group box, you can select one of the following:

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Challan Details
If you select the Challan Details radio button, the report displays all documents for which the challan is completed.
Bank Challan Details
If you select the Bank Challan Details radio button, the report displays all documents that have already executed the J1INBANK transaction.
Certificate Details
If you select the Certificate Details radio button, the report displays all documents for which the certificate is generated.
Consolidated Report
If you select the Consolidated Report radio button, the report displays the tax amount, challan details, certificate number, and acknowledgement
number details.
Documents with no challan
If you choose the Documents with no challan radio button, the report displays all documents for which challan is not run.

Output
Based on the selection criteria, the system displays the relevant withholding tax documents.
On the output screen, you have the option to download the list to an excel sheet, to a word document, as well as mail it to a recipient. If you choose Mail
Recipient , the system takes you to the Create Document and Send screen. On this screen, enter the respective recipients in the Recipient group box and
choose the recipient type in the Recip. type field.
If you want to send an attachment as part of the mail, under the Attachments tab, choose Import attachment .
Choose Local File to save the output list in one of the following formats:
unconverted
Spreadsheet
Rich text format
HTML Format
In the clipboard
On the output screen, if you choose any one of the line items, the system displays the corresponding document as created using the Display Document
(FB03) transaction. For any given line item, if the tax amount is zero, the system does not display the tax lines in the document view.

Activities
To access this transaction, on the SAP Easy Access screen, choose Accounting Financial Accounting Accounts Payable Withholding Tax
India Extended Withholding Tax Information System Withholding Tax .

1.1.1.5.2.17 Transaction Codes for Extended Withholding Tax


Transaction Code Action

J1INJV Enter journal vouchers

J1 INPR Enter provisions for taxes on services received

J1INUT Reverse provisions for taxes on services received

J1INCHLN Create remittance challans

J1INREV Reverse remittance challans

J1INBANK Enter bank challans

J1INCERT Print withholding tax certificates for vendors

J1INREP Reprint withholding tax certificates for vendors

J1INCANC Cancel withholding tax certificates for vendors and customers

J1INCCERT Print withholding tax certificates for customers

J1INCCREP Reprint withholding tax certificates for customers

J1INCUST Enter withholding tax certificates from customers

J1INQEFILE Prepare TDS returns

J1INMIS Withholding Tax Information System

1.1.1.5.3 Quarterly TDS Returns

You use the Quarterly TDS Returns report to generate electronic TDS returns for payments other than salaries. You use the same report to generate the
following returns for residents and non-residents:

Returns Form

TDS returns for payments other than salaries to residents Form 26Q

TDS returns for payments to non-residents Form 27Q

TCS returns under section 206 C Form 27EQ

To access the report, on the SAP Easy Access screen, choose Accounting Financial Accounting Accounts Payable Withholding Tax India
Withholding Tax <or> Extended Withholding Tax Reporting Quarterly TDS Returns , or Accounting Financial Accounting Accounts
Receivable Withholding Tax India Withholding Tax for Payments to Customers Reporting Quarterly TDS Returns.

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Note
Use this report irrespective of whether you use the Classic TDS or the Extended Withholding Tax solution. If you have migrated from Classic TDS to
Extended Withholding Tax during the course of the fiscal year, the report covers all withholding tax items that you posted under both solutions.

Prerequisites
You have customized the withholding tax solution as described in Extended Withholding Tax or Classic Withholding Tax.
In particular, you have maintained the state codes specifically for TDS returns and TCS returns in Customizing for Financial Accounting (FI), by choosing
Financial Accounting Global Settings Withholding Tax Extended Withholding Tax or Withholding Tax Reporting India .
So that the report can handle reduced-rate taxes and exemptions under Sections 194, 197, and 197 A, you must have customized the withholding tax codes
accordingly (see "See also" below).

Features
Before you generate a TDS return, you can check which withholding tax items will be included in it. To do so, you generate a list using the report.
Note that the report only covers withholding tax items that you have remitted to the authorities and for which you have entered a bank challan in the system.

Recommendation
The system validates if the file path entered by the user aligns with the file system configurations authenticated for the report. The file system
configuration includes a logical file name FI_J1IQEREFILE_FILE and logical file path FI_J1IQER_FILE , associated with the report. You should maintain
the physical file path that you need to use in this report, against the logical file path FI_J1IQER_FILE using transaction FILE .

Selection
On the selection screen, you define whether you want to generate the form 26Q, 27Q, or 27EQ and you enter the generic parameters for the quarterly TDS
return. In addition, you enter data as follows:
Withholding Tax Data group box
Fill out either the EWT Section Code or the Withholding Tax (Classic) group box, depending on whether you use Extended Withholding Tax or
Classic Withholding Tax . However, if you have migrated from Classic Withholding Tax to Extended Withholding Tax during the course of the fiscal
year, fill out both group boxes.
Address Details and Responsible Person's Address tabs
Enter your company's details and the details of the person responsible for deducting and remitting the tax to the authorities. The report saves this data in
the electronic TDS return.
Output Processing Options tab
Specify whether you want to list the withholding tax items for inclusion in the return, or generate an electronic TDS return file, or both. If you want to
generate a file, specify where you want the report to save it.

Output
Depending on what settings you make on the selection screen, the report:
Lists the withholding tax items for inclusion in the TDS return
Generates an electronic file at the location that you specify

More Information
Exemptions and Reduced Rates for Section 194 A
Exemptions and Reduced Rates Under Sections 197 and 197 A

1.1.1.5.4 Migration from Withholding Tax to Extended Withholding


Tax

Purpose
This procedure shows you how to migrate from the Classic Withholding Tax solution (Classic TDS) to its successor, Extended Withholding Tax .
In order for the existing documents involving with withholding tax items to be compatible with Extended Withholding Tax , you have to migrate the data. But
before you can do so, you have make the appropriate Customizing settings, archive old documents, and so on. Follow the instructions given below.

Caution
Ensure that no one can post any documents in the company codes during the withholding tax changeover. We recommend that you block your system for
all end users and carry out the conversion runs at the weekend.
You must also carry out the migration in a test system before you start work on your production system.

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Process Flow
Preparations
1. You implement Logistics Invoice Verification .
2. You archive all of the cleared items .
3. You make the Customizing settings for Extended Withholding Tax .
4. You set up the authorizations for the Migration Program .
5. Just before you start the migration, you block the users from working in the system .
Migrating the Existing Transaction Data and Activating Extended Withholding Tax
1. Execute the Health Check Program
2. You map the Classic TDS tax codes to the Extended Withholding Tax types and codes .
3. You activate Extended Withholding Tax .
4. You maintain your vendor master records .
5. You migrate the documents .
Cleaning Up
You clean up the system.

1.1.1.5.4.1 Implementing Logistics Invoice Verification (MM-LIV)

Use
The customer carries out this step.
Classic TDS supports conventional invoice verification and Logistics Invoice Verification (MM-LIV) while Extended Withholding Tax supports only
Logistics Invoice Verification. After you have migrated, you cannot use conventional invoice verification anymore.
If you do not use invoice verification of any kind, you do not need to take any action.

Procedure
Make the Customizing settings for Logistics Invoice Verification in the Implementation Guide (IMG) for Materials Management, by choosing Invoice
Verification Logistics Invoice Verification .

1.1.1.5.4.2 Archiving Cleared Items

The customer carries out this step.

Recommendation
Archive as many cleared items as you can. Documents that have already been archived are not converted, so you can considerably reduce the time
required for the conversion run by doing so.

Note
The number of cleared items managed in a system is usually much greater than the number of open items. If, for example, a system contains a hundred
times more cleared items than open items, it will take a hundred times longer to convert the cleared items than to convert the open items.

For more information about archiving documents, see the SAP Library under Cross-Application Components Archiving Application Data (CA-ARC)
Financial Accounting (FI) Archiving Financial Accounting Data (FI) Archiving FI Documents .

Procedure
1. From the SAP Easy Access screen, choose Accounting Financial Accounting General ledger (or Accounts Receivable or Accounts Payable)
Periodic Processing Archiving Documents .
2. Archive the required cleared documents.

1.1.1.5.4.3 Customizing Extended Withholding Tax

Use
The customer carries out these steps.
Before you start the conversion of the withholding tax data, you must set up Extended Withholding Tax in the Implementation Guide for Financial
Accounting . Make the system settings described below.

Caution
Do not activate Extended Withholding Tax yet.

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If you activate Extended Withholding Tax before converting the withholding tax data, documents could be posted with Extended Withholding Tax . This
could result in your system containing documents with both classic withholding tax and Extended Withholding Tax which, in turn, could lead to serious
problems when you migrate the documents.

Procedure
1. Define the official withholding tax keys .
2. Define the withholding tax types and withholding tax codes .
3. Define the minimum and maximum amounts per type and code .
4. Make any additional settings .

1.1.1.5.4.3.1 Defining Official Withholding Tax Keys


1. In the Implementation Guide for Financial Accounting, choose Financial Accounting Global Settings Withholding Tax Extended Withholding
Tax Basic Settings Define Official Withholding Tax Codes .
2. Define the official withholding tax keys (also known as official withholding tax codes) for reporting withholding tax. For example, define the keys for the
various sections of the Income Tax Act, 1961.

1.1.1.5.4.3.2 Defining Withholding Tax Types and Withholding Tax


Codes

Use
Define all types and codes that you require for all countries that you want to implement Extended Withholding Tax in.

Procedure
Defining Withholding Tax Types
1. In the Implementation Guide (IMG) for Financial Accounting (FI), choose Financial Accounting Global Settings Withholding Tax Extended
Withholding Tax Calculation Withholding Tax Type .
2. Make the necessary settings for the required withholding tax types in the following activities:
3. 1. Define Withholding Tax Type for Payment Posting, and if necessary, Define Withholding Tax Type for Invoice Posting
2. Define Rounding Rule for Withholding Type
3. Assign Condition Type to Withholding Tax Type
Defining Withholding Tax Codes
1. In the IMG for FI, choose Financial Accounting Global Settings Withholding Tax Extended Withholding Tax Calculation Withholding Tax
Codes Define Withholding Tax Codes.
2. If any of the withholding tax codes use formulas to calculate withholding tax, you must also carry out the activity Define Formulas for Calculating
Withholding Tax.

1.1.1.5.4.3.3 Defining Minimum and Maximum Amounts

Use
Define, if necessary, the minimum and maximum amounts for the withholding tax codes and types that you have defined.

Procedure
1. In the Implementation Guide for Financial Accounting, choose Financial Accounting Global Settings Withholding Tax Extended Withholding
Tax Calculation Minimum and Maximum Amounts .
2. To define the minimum and maximum amounts for the withholding tax types, choose Define or Maintain Min/Max Amounts for Withholding Tax Types
.
3. To define the minimum and maximum amounts for the withholding tax codes, choose Define or Maintain Min/Max Amounts for Withholding Tax Codes
.

1.1.1.5.4.3.4 Making Additional Settings


Now that you have defined the withholding tax codes and types, make the remaining settings, including:
Define the recipient types you need for your vendors and attach them to the appropriate vendor master records.
Make the account determination settings.
Specify for each company code which withholding tax types they are allowed to withhold tax for.

Caution
Do not activate Extended Withholding Tax yet.

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1.1.1.5.4.4 Setting Up Authorizations for Migration

Use
The customer carries out this step.
In this activity, you create authorization profiles for the people involved in the withholding tax migration. In order to execute the Migration Program, you require
the role TDS Supervisor or the authorization object J_1IEWTJV, provided by SAP.

Recommendation
Once the withholding tax migration is completed, take the precaution of withdrawing the change authorization for all the users involved. This prevents the
conversion being started while the system is being used for normal day-to-day activities, for example.

Procedure
1. In the Implementation Guide for Financial Accounting, choose Financial Accounting Global Settings Maintain Authorizations .
2. Make the required Customizing settings.
The authorization object J_1IEWTJV is in the India Version object class under the object name Authorization Check for JV .

1.1.1.5.4.5 Blocking Users


The customer carries out this step.

Use
You must block the system for normal activities while the conversion is being prepared and carried out. Documents must not be posted or processed, and
master data must not be changed, otherwise your accounting documents and system settings may contain serious discrepancies.

Procedure
1. Ensure that all users involved in the withholding tax changeover have the appropriate access authorizations.
2. Block your SAP System for all other users.
If it is not possible to take measures to ensure that there are no users working in the system, you should block the users and the whole system throughout the
organization.
Restart the SAP System so that all users are logged off.

1.1.1.5.4.6 Withholding Tax Migration Health Check

Use
You must execute this report before you proceed with the Migration Program. It makes sure that all the Customizing settings have been made properly (for a
list of the checks, see under Activities below), so that the Migration Program will migrate the data correctly. Additionally, the report also displays a list of the
documents that you will not be able to process any more after the migration.
You must run the report for each company code that you want to carry out the migration for, and the health check status for each company code must be OK.

Prerequisites
You have carried out all the activities described under Preparations in Migration from Classic TDS to Extended Withholding Tax .

Features
To access the report, in Customizing for Financial Accounting (FI), choose Financial Accounting Global Settings Withholding Tax Withholding Tax
Changeover Withholding Tax Changeover India Health Check .

Selection
On the selection screen, enter the following data:
Selection Criteria
Specify which country and which company code you want to perform the health check for. You can only execute the report for one company code
at a time.
Specify whether you want to run all checks, or just the obligatory ones. We recommend that you perform all of the checks.
Document Details
In this group box, you specify which sorts of documents you want the report to cover, and from which dates.
Other Checks

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Specify whether you want the vendor master records to be checked, and the tax code mapping from Classic TDS to Extended Withholding Tax .

Output
The output list shows:
The results of the Customizing checks
The documents that cannot be processed after the migration
The results of the vendor master checks
The results of the checks on the tax code mapping
The key is as follows:

Indicator Meaning

One check has been run on an obligatory Customizing activity, and the settings are
incorrect

One check has been run on an optional Customizing activity, and the settings are
incorrect

One check has been run on an obligatory Customizing activity, and the settings are
correct

Multiple checks have been run on an obligatory Customizing activity, and some of
the settings are incorrect

Multiple checks have been run on an obligatory Customizing activity, and all of the
settings are correct

Process all of the activities marked , , or , and execute the report again. Only when all activities are marked or will the report assign
the company code the status OK.

Activities
The report makes the following checks at country level:
Withholding tax country
Official withholding tax key
Withholding tax types
Withholding tax codes
Recipient types
Tax due dates
Rounding rules
Business transaction events
And these at company code level:
Company code global parameters
Extended Withholding Tax has been activated
Withholding tax codes are assigned to company code
Accounts for withholding tax to be paid over have been defined
Accounts for posting withholding tax and losses to be paid
Clearing accounts liable to withholding tax
Section codes have been defined
Factory calendar has been assigned to section codes
Creation of remittance challan
Vendor withholding tax certificates
Vendor master data
Surcharge calculation

1.1.1.5.4.7 Mapping Withholding Tax Types and Withholding Tax


Codes

Use
You map the Classic TDS withholding tax codes to the Extended Withholding Tax withholding tax types and codes.

Procedure
1. From any screen, choose System Services Table maintenance Extended Table Maintenance .
2. Enter table J_1IEWT_MIGRATE and choose Maintain .
3. Map the Classic TDS tax codes to the Extended Withholding Tax tax types and codes.
4. Save your entries.

1.1.1.5.4.8 Activating Extended Withholding Tax

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Use
The customer carries out this step just before you migrate the data.

Procedure
1. In the Implementation Guide (IMG) for Financial Accounting (FI), choose Financial Accounting Global Settings Withholding Tax Extended
Withholding Tax Company Code Activate Extended Withholding Tax .
2. Activate Extended Withholding Tax for each company code whose data you want to migrate.

1.1.1.5.4.9 Maintaining Vendor Master Records

Use
Here, you specify which withholding tax types apply to each vendor.
Under Extended Withholding Tax, you can assign any number of withholding tax types to a vendors master record. When you come to make a posting
involving withholding tax for this vendor, you can then enter withholding tax for each withholding tax type that you have assigned it.
Make sure the withholding tax types in the vendor master record match those in the mapping table : When, during migration, the system converts the various
documents (for example, payments), it replaces any Classic TDS withholding tax types with the Extended Withholding Tax types and codes that entered in
the mapping table. However, it does not cross-check the withholding tax type against the appropriate vendor master record. If, during migration, the Migration
Program assigns a document a withholding tax type that you have not assigned to the vendor, you will not be able to process the document afterwards.

Prerequisites
Just before you start maintaining the vendor master records, activate Extended Withholding Tax for the company code in question. Otherwise, the system
will not display the appropriate fields. As soon as you have finished, deactivate it.

Procedure
Make the changes in the vendor master records of all vendors that you have to withhold tax on. For each vendor:
Enter the relevant withholding tax types
Enter the relevant withholding tax codes and select Liable, in order to activate it
Enter the recipient type
Enter any exemption information

1.1.1.5.4.10 Withholding Tax Data Migration Tool

Use
This program converts documents created under the Classic TDS solution so that they are suitable for use with Extended Withholding Tax . For example,
after you have migrated to Extended Withholding Tax, neither the Payment Program nor the Clearing Program will be able to work with Classic TDS
documents.
This program migrates all documents involving withholding tax, such as invoices, down payments, down payment clearing documents, and TDS documents.
After the migration, the system will treat them as though they were created using Extended Withholding Tax .

Integration
The program contains two user exits:
Selecting the section code
The section code is mandatory in down payments that are to be migrated. You can either enter them by filling out the selection screen or using the user
exit. The user exit provides the section code, business area, company code, and TAN number as input parameters. The appropriate section code can be
derived from this information.
Data selection and validation
There are two user exits available to choose and validate additional clearing documents and down payment documents.

Prerequisites
You have carried out all the steps in Migration from Classic TDS to Extended Withholding Tax under Preparations and steps 14 under Migrating the
Existing Transaction Data and Activating Extended Withholding Tax. You cannot go back and complete these steps after you have migrated the documents.
In order to execute the program, you must have the role TDS Supervisor.

Features
To access the program, in Customizing for Financial Accounting (FI), choose Financial Accounting Global Settings Withholding Tax Withholding Tax

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Changeover Withholding Tax Changeover India Migration Program .
First check the documents to see if they will be migrated properly, and edit any that result in problems. Then, when all the documents have been checked,
migrate them .

Selection
On the selection screen, enter the following data:
Selection Criteria
In this group box, specify which documents you want to migrate. If you enter invoice document numbers, the system picks up the associated clearing
documents.
Additional Selection Criteria
Use these fields to refine your selection. If you need to migrate a large number of documents, we recommend that you process one small quantity at a
time in order to improve performance.
Migration of Down Payments
If you want to migrate down payments, select this option. If you do, you must enter a section code or have it defaulted by means of a user exit.
Posting Run
Select this indicator to execute the program in test mode.

Output
In the result screen, verify the invoices and credit memos and check them. Down payments are only migrated after you have checked them from the screen.
If you want to migrate down payments, the list shows all the open down payments. You then have to select the down payments and save them for migrating
the data.
You can migrate invoices, credit memos, clearing documents, and TDS documents on the above live or previewed.

Activities
Migrate invoices, credit memos, clearing documents, and TDS documents if you have not yet paid the vendor or if the payment is likely to be reversed.
You must decide before you start on the migration if this is likely or not. Do not migrate the documents if the vendor has been paid and it is unlikely that you
will have to reverse the payment.
Migrate all open down payments so that tax adjustment on down payment clearing could happen along with clearing. Decide on the appropriate section code
entity to which the down payments pertain and choose from the list displayed.
If the status of a document changes, you execute the program again. For example, say that you have migrated an invoice. If you then post TDS later on, you
must migrate the invoice again so that the TDS document is also migrated.
When you come to run the Automatic Payment Program and the error Inconsistent withholding tax information occurs for a line item, one of the reasons could
be that the line item is not migrated.

1.1.1.5.4.10.1 Checking the Documents

Use
In this step, you execute the report in test mode. The system:
Shows you how many vendor items, open items, and cleared items it has found in the company code that match your selection criteria
Shows you how many vendor items and so on there are per Extended Withholding Tax code
Checks the assignment of the Classic TDS withholding tax codes to the Extended Withholding Tax types and codes to see whether the
characteristics of each combination of type and code for extended withholding tax correspond

Procedure
1. Fill out the selection screen, making sure that you have selected Test run for invoice/credit memo, and choose .
2. The output list appears, with a list of the documents selected and any warnings.
3. Check the documents for any discrepancies that could lead to problems later on, when you make postings for Extended Withholding Tax :
Check whether any documents are missing withholding tax codes.
If so, check whether the codes have been deleted by mistake, in which case you have to make the relevant system settings again, or whether you
intentionally wanted the tax code to be deleted.
Check whether any withholding tax codes exist that have not been used, and delete them.
Check down payments to see if the migrated base and tax are correct.
1. Correct any errors and execute the report again.

1.1.1.5.4.10.2 Migrating the Documents

Use
In this step, you execute the report in update mode. The system migrates the documents from Classic TDS to Extended Withholding Tax . Note that this is
the most time-consuming step.

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Procedure
1. Fill out the selection screen, making sure that you have deselected Test run for invoice/credit memo, and choose .
2. The output list appears, with a list of the documents selected and any warnings.
3. In the list, select the down payments that you want to migrate and save.
This procedure does not apply to any other types of documents.

1.1.1.5.4.11 Cleaning Up

Use
Once you have migrated the documents, there is some cleaning up to do in the sytem:

Procedure
1. Check the Customizing settings for Extended Withholding Tax .
2. Check, edit, and save any of the following, which the Migration Program does not handle:
Recurring entry documents
Sample documents
Noted items
1. Release the system
Once you have finished the migration and cleaning up activities, release the system for the users.

1.1.1.6 Tax Collected at Source

This is a form of tax in India, which is collected at source from the buyer by the seller of prescribed items. It is commonly referred to as TCS.
The system automatically calculates the tax collected at source and makes the relevant postings in Financial Accounting (FI) and Sales and Distribution
(SD).

Prerequisites
You have:
Made settings as described in Customizing for Tax Collected at Source
Entered the TCS withholding tax type and withholding tax code and selected the W/tax checkbox in the customer master.
For more information, see Customer Master (Withholding Tax Data).

Features
Tax Collected at Source has the following features:
The rate of tax collected at source differs based on the type of commodity.
The Education Cess and the Secondary and Higher Education Cess are applicable at a certain percentage on the tax collected at source.
The seller of the items should furnish a tax certificate specifying whether tax has been collected, the amount that has been collected, rate of tax applied,
and such other particulars as may be prescribed.

Activities
You post the tax collected at source by creating:
1. A sales order using the Create Sales Order (VA01) transaction.
2. An outbound delivery using the Create Inbound Delivery (VL01) or the Create Inbound Delivery with Order Reference (VL01N) transactions.
3. A billing document using the Create Billing Document (VF01) transaction.

Example
Consider an invoice for goods of INR 1000 and TCS of 10%. The goods buyer pays the tax collected at source. During the creation of billing document, the
system makes the following postings:

Account Debit (Dr) Credit (Cr)

Customer A/c Dr 1100

Sales A/c Cr 1000

TCS payable Cr 100

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To calculate and report tax collected at source, make the following settings (all under country key IN ) :

Customizing Settings

1. Financial Accounting (New) Financial Accounting Global Settings (New) Create official withholding tax key 206C
Withholding Tax Extended Withholding Tax Basic Settings Define
Withholding Tax Keys

2. Financial Accounting (New) Financial Accounting Global Settings (New) Create withholding tax type S1 with the name Tax Collected at Source-Base and
Withholding Tax Extended Withholding Tax Calculation Withholding Tax make the following settings:
Type Define Withholding Tax Type for Invoice Posting - Base amount = Modif. net amount
- Rounding rule = Round w/tax amnt up
- Select Post w/tax amount checkbox
- Accumulation type = No accumulation
- Control data = select checkboxes W/tax base manual , Manual w/tax amnt , and
No cert. numbering
Similarly create withholding tax types S2 , S3 , and S4 with the names Tax
Collected at Source-Surcharge , Tax Collected at Source-Education Cess , and
Tax Collected at Source-SECESS respectively and make settings as stated above.

3. Sales and Distribution Basic Functions Pricing Pricing Control Copy the existing access sequence J1AW and create a new access sequence
Define Access Sequences (choose Maintain Access Sequences ) J1IW with the name Withholding tax code - country-specific and make the
following settings:
- Access sequence-Access number = 10
- Condition table = 399

4. Sales and Distribution Basic Functions Pricing Pricing Control Create condition type JTCS with the name TCS-Base and make the following
Define Condition Types (choose Maintain Condition Types ) settings:
- Access sequence = J1IW
- Cond. class = W
- Calculat. type = A
- Cond. category = D
- Select Item Condition checkbox
Similarly create condition types JTEC and JTSE with the names ECS on TCS
and SECess on TCS respectively and make settings as stated above.

5. Financial Accounting (New) Financial Accounting Global Settings (New) Assign condition types JTCS , JTEC , and JTSE to withholding tax types S1 ,
Withholding Tax Extended Withholding Tax Calculation Withholding Tax S3 , and S4 respectively.
Type Assign Condition Type to Withholding Tax Type

6. Financial Accounting (New) Financial Accounting Global Settings (New) Create withholding tax code S1 with name TCS-Base and make the following
Withholding Tax Extended Withholding Tax Calculation Withholding Tax settings:
Code Define Withholding Tax Codes - Off. W/Tax Key = 206C
- Post.indic. = 3
Similarly create withholding tax codes S3 and S4 with the names Education
cess on TCS and SECess on TCS and make settings as stated above.

7. Financial Accounting (New) Financial Accounting Global Settings (New) Enter the chart of accounts CAIN . You need to maintain the same G/L account for
Withholding Tax Extended Withholding Tax Posting Accounts for the transaction key WIT -based tax line items and SD-FI condition based tax line
Withholding Tax Define Accounts for Withholding Tax to be Paid Over items.
Maintain a separate G/L account for the transaction key OFF-based line items.
Since posting of TCS happens on both SD and FI documents, ensure that you
assign the same G/L account for each combination of withholding tax type and
withholding tax code.

Note
To post tax collected at source for Sales and Distribution documents, maintain
the same G/L account in Customizing for Sales and Distribution , by choosing
Basic Functions Account Assignment/Costing Revenue Account
Determination Assign G/L Accounts .

8. Sales and Distribution Basic Functions Free Goods Control Free Select the pricing procedure JINFAC and double-click Control data . The system
goods Pricing Maintain Pricing Procedure For Pricing displays the Control data screen.
Define the condition types JTCS , JTEC , and JTSE and add them to the pricing
procedure JINFAC . The system calculates the values of the goods but does not
post them directly to the Sales and Distribution document (SD). Instead, posting
takes place based on the assignment of condition types to the withholding tax types
(refer step 5).

9. Sales and Distribution Basic Functions Pricing Pricing Control Create a new condition type JWTS to post TCS to Financial Accounting (FI)
Define Condition Types (choose Maintain Condition Types ) documents. Add this condition type to the pricing procedure JINFAC .
Similarly create condition types JETS for ECS on TCS and JSTS for SECess on
TCS and add them to the pricing procedure JINFAC .

1.1.2 General Ledger Accounting (FI-GL)

Purpose
The General Ledger (FI-GL) component covers the most important laws and business practices specific to India. The following documentation describes
these aspects of the component. For generic information about FI-GL, see General Ledger Accounting (FI-GL) .

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Features
The country template for India comes with its own chart of accounts and a financial statement version.

1.1.2.1 Chart of Accounts

Definition
See Chart of Accounts .

Use
The country template for India comes with its own chart of accounts, CAIN.
It contains all accounts common to most businesses in India. It also takes into account the requirements of Schedule VI of the Companies Act 1956.
The country template also contains settings for automatic accounting postings in most components, with the exception of Controlling (CO).

1.1.2.2 Financial Statement Version

Definition
See Financial Statement Version .

Use
The country template for India comes with its own financial statement version, BAIN. You can use it to prepare financial statements in accordance with
Schedule VI of the Companies Act 1956. This act lists the headings under which the individual accounts are to be grouped. Each of the headings is
represented by an item in the financial statement version.

1.1.3 Accounts Payable (FI-AP)

Purpose
The Accounts Payable (FI-AR) component covers the most important laws and business practices specific to India. The following documentation describes
these aspects of the component. For generic information about FI-AP, see Accounts Receivable and Accounts Payable: Overview .

Features
Country Version India comes with a number of functions relating to withholding tax (see link below).
Extra fields are available in the vendor master data for information required in India only.
See also:
Withholding Tax

1.1.3.1 Vendor Master (Withholding Tax Data)

Definition
The part of the vendor master record where you record information about which taxes you have to withhold from payments to a vendor.
For generic information about withholding tax data in the vendor master, see Defining Liability to Tax and Authorization to Deduct Tax .
To access the vendor master, on the SAP Easy Access screen, choose Accounting Financial Accounting Accounts Payable Master Records

Use
Enter the withholding tax types and withholding tax codes that the vendor is liable to, and for each entry, enter the recipient type , depending on whether the
vendor is a legal person or a natural person.
See also:
Vendor Master (Country Version India Data)
Vendor Master (Excise Data)

1.1.3.2 Entering Vendor Invoices


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1.1.3.2 Entering Vendor Invoices

Use
In India, when you enter a vendor invoice in Accounts Payable (FI-AP), you follow the standard procedure and, in addition, you assign the invoice to the
appropriate section code .

Procedure
From the SAP Easy Access screen, choose Accounting Financial Accounting Accounts Payable Document Entry Invoice .
Enter the header data as required, including:
Bus. Place/Sectn: Your section code.
Enter other data and save the invoice.

Result
The system:
Creates an accounting document with the necessary withholding tax items (including surcharges )
Assigns all vendor items and withholding tax items to the section code that you have entered
Assigns each withholding tax item a tax due date , which it enters in the Value Date field (which is not shown on the user interface)
When the time comes, you must:
Remit the withholding tax
The system automatically selects which withholding tax items need to be remitted on the basis of their tax due date.
Create a withholding tax certificate for the vendor
If you post the wrong amount of tax or you have posted the tax using the wrong official withholding tax key, you can enter a journal voucher to reverse the
posting.

1.1.3.3 Entering Vendor Down Payments

Use
In India, when you enter a vendor down payment in Accounts Payable (FI-AP), you follow the standard procedure and, in addition, you:
Assign the down payment to the correct section code
Calculate any withholding tax required

Procedure
On the SAP Easy Access screen, choose Accounting Financial Accounting Accounts Payable Document Entry Down Payment Down
Payment .

On the Header Data screen, enter the header data as required and choose
On the Add Vendor Item screen, enter data as required, including:
Bus. Pl. (Business Place): The section code handling the down payment
Save the down payment.

Result
The system creates an accounting document with the appropriate withholding tax items. It enters the business place in each vendor item and each withholding
tax item.

1.1.3.4 Clear Invoices Against Down Payments

Use
If you withhold tax on a vendor down payment, and the vendor then sends you an invoice, you have to clear the withholding tax when you have entered the
invoice (not when you pay the invoice, as is customary in other countries).

Features
This function has been incorporated into the standard function for clearing down payments (see Clearing ). When you clear an invoice against a down payment
for an Indian company code, the system clears the withholding tax automatically, if the company code is located in India.

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Activities

Customizing
In order for the tax to be cleared correctly, you must post the down payments using:
A withholding tax type that is marked as Central Inv. Prop . (Central invoice proportionate)
A withholding tax code that uses the posting indicator 1 (Standard posting: bank/vendor/customer line item reduced)
If you use either of the other two methods, the adjustment will be made against the offsetting account instead of the vendor account.

Day-to-Day Activities
Make sure that the withholding tax codes you use when you enter the down payment and the invoice are assigned to the same withholding tax key , otherwise
the clearing program will not let you clear them.
Once you have posted the vendor invoice, clear the down payment against it. To access the function, on the SAP Easy Access screen, choose
Accounting Financial Accounting Accounts Payable Document Entry Down Payment Clearing .

1.1.3.4.1 Example
A vendor provides you with some services, for which it promises to send you an invoice in a few days' time.
In the meantime, you make a down payment on the services for a total of INR 10,000, presenting the vendor with a check for INR 9,796 and withholding the
remaining INR 204 as tax:

A week later, the vendor sends you the invoice, for a total of INR 20,000 on which you have to withhold a total of INR 408. You post the invoice as normal,
which gives the following accounting document:

You then clear the invoice against the down payment. The system takes into account the INR 204 of tax that you have already withheld, and creates the
following accounting document to clear the down payment against the invoice, and clear the withholding tax account:

1.1.3.5 Down Payment Clearing with MIRO

If you have posted an invoice against a purchase order, and the system displays all down payments that are not cleared with reference to that purchase order,
you have to select those down payments that you want to clear.

Features
When you create an incoming invoice for a purchase order, the system displays the Down Payment Clearing pushbutton on the Enter Incoming Invoice
screen. For each down payment that has not been cleared or has been partially cleared, the system shows the down payment amount and the available
amount. To clear the down payment, enter the clearing amount in the relevant field.
Once you have posted the invoice document, the system clears the down payment automatically and posts the down payment clearing document together
with the invoice document. This invoice document will have withholding tax Debit entries to enable reversal of excess TDS paid during invoice verification.

Note
The down payment clearing amount must not exceed the total value of the invoice. However, the currency used in the down payment clearing document
can be different from the currency in the invoice.

1.1.4 Accounts Receivable (FI-AR)

Purpose
The Accounts Receivable (FI-AR) component covers the most important laws and business practices specific to India. The following documentation
describes these aspects of the component. For generic information about FI-AR, see Accounts Receivable and Accounts Payable: Overview .

Features
Country Version India comes with a number of functions relating to withholding tax (see link below).
Extra fields are available in the customer master data for information required in India only.
See also:
Withholding Tax

1.1.4.1 Customer Master (Withholding Tax Data)

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Definition
The part of the customer master record where you record information about which taxes you have to withhold from payments to a customer.
To access the customer master, from the SAP Easy Access screen, choose Accounting Financial Accounting Accounts Receivable Master
Records
For generic information about withholding tax data in the customer master, see Defining Liability to Tax and Authorization to Deduct Tax .

Use
Enter the withholding tax types and withholding tax codes that the customer is liable to.
Enter the recipient type in the W/Tax No. (Withholding Tax Number) field.
See also:
Customer Master (Country Version India Data)
Customer Master (Excise Data)

1.1.5 Asset Accounting (FI-AA)

Purpose
The Asset Accounting (FI-AA) component covers the most important laws and business practices specific to India. The following documentation describes
these aspects of the component. For generic information about FI-AA, see Asset Accounting (FI-AA) .

Features
Country-Specific Functions
Country Version India comes with a report for calculating depreciation on asset blocks (asset groups) as required by law for calculating a company's taxable
income.
Country Template
The country template for India comes with the following settings:
Chart of depreciation
Depreciation keys as per the income tax laws
For more information, see the following documentation.

1.1.5.1 Year-End Income Tax Depreciation Report

Use
You use this report to calculate the depreciation on your assets and any capital gains or losses according to the Income Tax Act.
To access the report, from the SAP Easy Access screen, choose Accounting Financial Accounting Fixed Assets Information System Reports
on Asset Accounting Taxes Country Specifics India Year-End IT Depreciation Report .

Prerequisites
You can use the Customizing settings delivered by SAP in order to configure Asset Accounting (FI-AA) with respect to the income tax depreciation area
and so that the report works correctly. For more information about what settings to make, see the Release Note structure under FI Release Notes from
Country Version India Add-On Customizing Settings for Income Tax Act .

Features
Selection
Enter the asset numbers of your group assets and other selection data as required.
Output
The system:
Calculates the depreciation on each asset block
Calculates any capital gains or losses
If you deselect Test Run, the system also:
Posts the depreciation to the income tax depreciation area
Stores the capital gains amounts from the report in a table for your future reference.

1.1.5.1.1 Calculation of Depreciation

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Use
The program calculates the depreciation on each asset block according to the Income Tax Act.

Features
Depreciation of Asset Blocks
The Income Tax Act requires you to depreciate all assets in blocks (in the SAP System, called asset groups). In other words, you do not calculate the
depreciation on each individual asset. Instead, an asset group has its own net book value.
The asset blocks net book value increases when you add assets to it and falls when you sell or retire assets. You also calculate depreciation on the blocks
net book value. The depreciation rate depends on the asset block and is prescribed by the government. Since an asset block may exist for a very long time,
as you add new assets to it, it has an unrestricted useful life.
For example, assume your company has four trucks. At the beginning of fiscal 20X1, the trucks have a total net book value, for income tax purposes, of
INR 300,000. At the end of the year, with no acquisitions and no retirements, the net book value has not changed. The total depreciation on all of the trucks is
10% of INR 300,000, or INR 30,000.
The total net book value of the block at the beginning of 20X2 is therefore INR 270,000.
New Assets Held for Less Than 180 Days
If you purchase an asset less than 180 days before the end of the fiscal year, you are only entitled to depreciate it at half of the normal rate of depreciation. To
continue the example, on 1 June 20X2 you sell a truck for IN 30,000. On 31 March the following year, instead of posting INR 3,000 depreciation, you can only
post half of that, INR 1,500.
The system handles this requirement by taking half the acquisition cost and calculating depreciation on that.
Asset Retirements
When you retire an asset, you are not entitled to calculate any depreciation on it in that fiscal year at all.

1.1.5.1.2 Calculation of Capital Gains or Losses on Sales of


Assets

Use
The system automatically calculates any gains of losses on sales of assets according to the Income Tax Act. Any gains or losses have to be taxed.

Features
If you sell an individual asset from a block, the value of the asset block goes down by the sale price. For example, assume that you have an asset block of
trucks. On 1 April 20X2, the trucks total net book value is INR 270,000. On 1 February 20X3 you sell one of the trucks for INR 50,000. At the end of the year,
the net book value before depreciation is therefore INR 220,000.
Capital Gains
If the sale of an asset causes the value of the asset block to fall below zero, the amount below zero constitutes a capital gain under the terms of the Income
Tax Act. For example, on 1 April 20X3 the trucks total net book value is INR 198,000. On 1 December you sell a truck for INR 210,000. On 31 March 20X4
the system determines the asset blocks net book value as:
INR 198,000 INR 210,000 = INR 12,000
This makes a capital gain of INR 12,000, which the system stores in a table for your future reference.
The following year, the net book value of the asset block is set to zero.
Capital Losses
If you sell all the assets in a block, but the block still has a net book value, the system posts this value as a capital loss. For example, if you have a block
with only one asset valued at INR 12,000, and you sell it for INR 10,000, the net book value of the block is still INR 2,000, even though there are no assets in
it.
The system stores the capital loss amount in a table for your future reference.

1.2 Flexible Real Estate Management (RE-FX)


The Flexible Real Estate Management (RE-FX) component covers the most important laws and business practices specific to India . The following
documentation describes these aspects of the component.
For generic information about RE-FX, see Flexible Real Estate Management (RE-FX).

1.2.1 India

This localization is designed for use by companies in India. It comprises Flexible Real Estate Management (RE-FX) functions that follow laws and business
practices particular to India. This documentation explains how the Indian RE-FX country-specific functions work and how to customize the system according
to local requirements.
The Flexible Real Estate Management (RE-FX) solution for India is based on the extended withholding tax solution in Financial Accounting (FI).

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Implementation Considerations
To use RE-FX for India, you have activated the business function Financials Extension (EA-FIN). You make this setting in Customizing, by choosing SAP
ECC Extensions .
For more information, see Financials Extension (EA-FIN).

Features

Customizing
To use the RE-FX localization for India, you have to activate the program code for India. You do so in Customizing for RE-FX, by choosing Country-
Specific Settings Activate Country-Specifics .
To use the localized functions, make the settings described under Customizing.

Country-Specific Functions
This localization enables you to report the local Tax Deducted at Source (TDS) and the federal Service Tax to the local tax authorities. Section code
represents the organizational unit responsible for collecting withholding tax, as identified by the Tax Account Deduction Number (TAN). The business place
represents the organizational unit responsible for collecting Service Tax.
The geographical location of the real estate object determines the responsible tax office. The periodic postings with real estate contracts generate the taxes
and you specify the tax office responsible for collecting the taxes in the real estate objects assigned to the contracts.
The section code solution in Flexible Real Estate Management (RE-FX) for India is based on the extended withholding tax solution in Financial Accounting
(FI).

1.2.1.1 Tax Deducted at Source

This localization describes the India-specific features for reporting Tax Deducted at Source (TDS) on real estate.
In India, while reporting the TDS to the tax authorities, companies need to specify a section code along with the withholding tax (TDS) data.

Note
Section code represents the organizational unit responsible for collecting and remitting withholding tax, as identified by the Tax Account Deduction Number
(TAN).
Each company can have more than one TAN, so in the SAP system, a company code can also have multiple section codes.

Features
You maintain section codes in the master data and report withholding tax data relevant for Flexible Real Estate Management (RE-FX) as required in India.

1.2.1.1.1 Customizing

The following documentation describes the Customizing settings that you must make before you can use the India-specific functions in the Flexible Real
Estate Management (RE-FX) area.

1.2.1.1.1.1 Customizing for Withholding Tax Reports of Real


Estate Objects

To generate the withholding tax reports correctly for real estate objects, you must make settings in Customizing for Financial Accounting (New) (FI) under
Financial Accounting Global Settings (New) Withholding Tax Extended Withholding Tax Basic Settings India Define Section Codes .

1.2.1.1.2 Master Data

This documentation describes how you maintain section codes for real estate objects.

1.2.1.1.2.1 Maintain Section Codes for Real Estate Objects

You can maintain section codes for the following real estate objects:
Business Entity
Maintain the section code for the business entity on the Reference Factors tab page of the master data transaction for business entities.
On the SAP Easy Access screen, choose Accounting Flexible Real Estate Management Master Data Process Business Entity .
Buildings
Maintain the section code for the business entity on the Additional Data tab page of the master data transaction for buildings. On the SAP Easy

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Access screen, choose Accounting Flexible Real Estate Management Master Data Process Buildings .
Properties
Maintain the section code for the business entity on the Building Law and Usage tab page of the master data transaction for properties. On the SAP
Easy Access screen, choose Accounting Flexible Real Estate Management Master Data Process Land .

Note
Ensure the section code that you maintain for a building or property is the same as its business entity.
All objects within a contract in the contract master must also have the same section code.

1.2.1.1.3 Reports

The following documentation describes the withholding tax reports that are supplied with Country Version India.

1.2.1.1.3.1 Withholding Tax Reports of Real Estate Objects

The system reports the withholding tax data captured for real estate, through the following Financials (FI) reports:
TDS Certificate (Form 16A)
Quarterly Returns (Form 26Q)

Recommendation
For more information about extended withholding tax reporting for India and withholding accumulation, see Extended Withholding Tax.

Prerequisites
You have
Made the settings as described in Customizing for Withholding Tax Reports of Real Estate Objects
Maintained the master data as described in Maintain Section Codes for Real Estate Objects

1.2.1.2 Service Tax

In India, companies leasing buildings or properties for commercial purposes are required to pay Service Tax to the corresponding federal tax office.
Real estate contracts are considered as contracts for services and not for goods, therefore from business point-of-view in India no value-added tax (VAT)
needs to be maintained in the contracts, only Service Tax. From technical point-of-view the Service Tax is handled like VAT. It is levied on the services
rendered and is applied on the total price of the service. For lease-out contracts it is a deferred tax that is levied at the time of the incoming payment.
In case of commercial contracts, the owner of the real estate object reports and pays the Service Tax to the corresponding federal tax authorities. The
geographical location of the real estate object determines which federal tax authority the Service Tax should be reported to. The owner of the real estate object
enters the tax office information in the real estate object master data.
Residential contracts are not subject to Service Tax.
The business place represents the organizational unit responsible for collecting Service Tax. You maintain business places in the following master data of
Flexible Real Estate Management (RE-FX) :
Business entities (Sites)
Buildings
Properties (Land)
You do not need to maintain the business place on the rental object level.

Process
You make required Customizing settings
You maintain business entities, buildings, properties, and rental objects
You assign the objects to your commercial contract and create conditions for your contract with tax types and tax groups that correspond to the Service
Tax
Each month you make a periodic posting of your commercial contract
To do so, on the SAP Easy Access screen, choose Accounting Flexible Real Estate Management Accounting Periodic Postings Periodic
Posting: Contracts .
You send the invoices to your tenant
You create the invoice with the Create Invoices (RERAIV) program and print it with the Print Invoices (RECPA520) program.
The tenant pays the rent for the real estate object
You post the incoming (partial) payments with the Incoming Payments program
To access the program, on the SAP Easy Access screen, choose Accounting Flexible Real Estate Management (RE-FX) Accounting
Incoming Payments Incoming Payments .
This program creates entries in the Data for Deferred Taxes (DEFTAX_ITEM) table for the deferred tax transfer.
You transfer the Service Tax on the G/L final tax accounts from the temporary tax accounts with the help of the Deferred Tax Transfer (RFUMSV50)
report at the time of the payment or partial payment
The program uses a separate database (table DEFTAX_ITEM) that stores the data of invoices, payments, down payments, tax transfer documents, and
any other documents that are relevant for deferred taxes.

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For more information on deferred taxes, see Deferred Taxes in Business Transactions.
After transferring the tax amounts, you pay the Service Tax to the federal tax authorities and report them with the Advance Return for Tax on
Sales/Purchases (RFUMSV00) program.
For generic information about the RFUMSV00 program, refer to the system report documentation.

1.2.1.2.1 Customizing for Service Tax

To report Service Tax for the postings of your commercial contracts correctly, you must make the following settings:
In Customizing for Cross-Application Components under General Application Functions Place of Business Define Business Places

Note
For India you do not need to activate the business place function separately in the Customizing activity Activate Business Places under the same
node.

In Customizing for Flexible Real Estate Management (RE-FX) under


Contract Contract Type Define Contract Types
Enter both commercial and residential contract types.
Accounting Automatically Generated Accounting Documents Taxes
Define Tax Types
Create a FULL or a HALF tax type.
Create Tax Groups
Default Value for Tax Rate per Contract Type
Assign a tax type and a tax group to your contract types, and select the Tax-Exempt checkbox for the residential contract type.
Accounting Integration FI-GL, FI-AR, FI-AP Taxes
Assign Tax Codes
Assign Tax Code (for FI Document)
Assign Tax Transaction Key

Prerequisites
You have defined tax codes as described in Customizing for Tax Codes.

1.2.1.2.2 Maintaining Business Places for Real Estate Objects

The Flexible Real Estate Management (RE-FX) solution for India enables you to report the Service Tax data for real estate contracts. The business place
represents the organizational unit responsible for reporting Service Tax. You specify a business place on an object master data level as follows.

Prerequisites
You have made the settings in Customizing for Service Tax.

Procedure
You make settings as follows:
1. To access the programs, on the SAP Easy Access screen, choose Accounting Flexible Real Estate Management Master Data :
Process Business Entity
Process Land/Property
Process Building
2. Enter your Indian company code.
3. Enter the number of your existing business entity, building, or property.
4. Choose Enter .
5. If you create a business entity, enter the business place on the Reference Factors tab page.
If you create a building or a property, the system sets the business place of the business entity by default for the building ( Additional Data tab page) or
for the property ( Building Law and Usage tab page). You can overwrite the inherited value. The same applies if you create a business entity, building, or
property by copying from an existing one.

Note
You do not need to specify a business place for rental objects because this value is inherited from the higher hierarchical level.

1.2.1.2.3 Maintaining Real Estate Contracts for Service Tax

Business place represents the organizational unit responsible for collecting and remitting Service Tax. You maintain business places in the object master data
relevant for Flexible Real Estate Management (RE-FX) as required in India.
So that the system can report the Service Tax, you must create contracts that are not tax-exempted and assign at least one real estate object with a business
place to them.

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Prerequisites
You have made the following settings:
Made the settings in Customizing for Service Tax
Maintained the business place in the master data of your real estate object

Procedure
You make the following settings:
1. To access this program, on the SAP Easy Access screen, choose Accounting Flexible Real Estate Management Contract Process
Contract .
2. Maintain your contract to process business places.
3. On the Objects tab page, add all the real estate objects that belong to the contract and have the necessary business place assigned.

Note
All the real estate objects that are subject to Service Tax within a contract must have the same business place assigned.

4. On the Posting Parameters tab page, create a tax term category, and on the Postings sub screen, specify a tax type and a tax group.
5. On the Conditions tab page, specify the condition types for your contract.
You need to post the service charge advance payments on revenue accounts and not with special G/L indicators, such as J and H .

Periodic Posting of the Contract


When you make periodic posting of your commercial contract, ensure that the business place is assigned to at least one of the real estate objects (business
entity, building, property) of your contract. You also need to ensure that all real estate objects have the same business place in your contract.
When posting the contract, the system calculates and posts the Service Tax amounts and forwards the business place information to the documents in
Financial Accounting (FI) on all document item levels. You can display all the simulated or created accounting documents by using the Documents
pushbutton. You can see in the list if all items of your simulated or posted documents have the business place information and with the same value.

1.3 Materials Management (MM)

Purpose
The Materials Management (MM) component covers the most important laws and business practices specific to India. The following documentation
describes these aspects of the component.

Features

Country-Specific Functions
Country Version India comes with functions for calculating, posting, remitting, and reporting excise duty, and for handling incoming and outgoing excise
invoices.
For these purposes, extra fields are available in the vendor master data and material master data for information required in India only.
Country Version India offers two ways of calculating excise duty, a condition-based method and a formula-based method.
You can enter incoming excise invoices in the SAP system for goods receipts arising from external procurement, subcontracting, and stock transfer. Excise
clerks can capture incoming excise invoices using a dedicated transaction, or, alternatively, warehousemen can capture them in the standard Goods
Movement transaction, MIGO, when they enter a goods receipt.
Finally, you can prepare copies of all excise registers for submission to the excise authorities.

Country Template
The country template for India comes with settings for calculating and posting all forms of taxes from MM, and with the necessary document copying control
settings.

1.3.1 Excise Invoice (Incoming)

Definition
A business document, in India, that your vendor sends you when it delivers excisable goods. It lists the goods and states how much excise duty applies on
them. Your use the excise invoice to claim back the excise that you have paid from the excise authorities.

Use
When you procure goods externally, each delivery that your vendors make is accompanied by an excise invoice. You have to post these in the system. This
document is required as proof of the excise duty that you have paid, so that you can then offset the duty against the excise duty that you levy on outputs.

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You can capture and post excise invoices in one or two steps, depending on your business requirements.
In the two-step procedure, the excise clerk captures the incoming excise invoice. This means that the clerk enters the data, but the system does not
yet create an entry in Part II of the appropriate excise register. Another user (the excise supervisor) checks the excise invoice and posts it. The system
then creates a Part II entry.
In the one-step procedure, the excise clerk captures and posts the incoming excise invoice simultaneously. The system creates the Part II entry
automatically.
Generally speaking, you have one excise invoice for each goods receipt, but see also Multiple Goods Receipts for a Single Excise Invoice .

Structure
In the SAP system, the excise invoice consists of header data and line items. The header data comprises:
An internal number
The excise invoice number
The date of the excise invoice
The details of the original vendor who generated the excise invoice, if your vendor purchased the goods from another vendor and was merely selling
them on to you
At line item level, the excise invoice lists the materials on the excise invoice, showing the following information:
Chapter ID
Quantity of materials
Excise duty base amount
Rates of excise duty
Amount of duty paid

1.3.5.1 Material Master (Excise Data)

Definition
The part of the material master record where you record excise information.
To access the material master, from the SAP Easy Access menu, choose Logistics Materials Management Material Master Material
The excise data is displayed in a separate group box on the Foreign Trade: Import Data and Foreign Trade: Export Data tabs.

Use
Customizing
In order for the users to be able to see the excise data group box, carry out the IMG activity in Customizing for Logistics General, by choosing Taxes on
Goods Movements India Master Data Assign Users to Material Master Screen Sequence for Excise Duty .

1.3.3 Vendor Master (Country Version India Data)

The part of the vendor master record where you record information about a vendor relating to sales tax, excise duty, and withholding tax.
To access the vendor master, from the SAP Easy Access screen, choose Logistics Materials Management Purchasing Master Data Vendor
Central ....

When you have entered the vendor that you want to process, you can access the excise data from every screen, by choosing CIN Details .
There are three separate tabs, one for each sort of tax.
If you prefer, you can also maintain this data in the Excise Rate Maintenance transaction (see Vendor Master (Excise Data)).

TAN Exemption
You can define the withholding tax exemption for a vendor on the basis of the tax account deduction number (TAN).
Choose the CIN Details pushbutton. On the resulting screen, under the TAN Exemption tab, make the following settings:
Enter the section code that identifies under which TAN the tax was deducted.
Enter the exemption certificate number and the exemption rate.
The exemption certificate field is mandatory.
Assign a period to this certificate number that identifies the duration for which the tax exemption is applicable.
Enter the reason for exemption from withholding tax.

1.3.4 Condition-Based Excise Determination

Use
When you enter a purchasing document, for example, a purchase order, the system automatically calculates the applicable excise duties using the condition
technique.

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Features
The standard system comes with two tax calculation procedures. TAXINN is only supports condition-based excise determination, whereas TAXINJ supports
condition-based excise determination and formula-based excise determination.
Both tax procedures contain condition types that cover all of the excise duties and sales taxes applicable.
Since the exact rates of excise duty can vary on a large number of factors, such as which vendor you purchase a material from, or which chapter ID the
vendor stocks the material under, you create condition records for every sort of excise duty.
When you come to enter a purchasing document, the system applies the excise duty at the rates you have entered in the condition records.

Activities

Customizing
Make the settings in Customizing for Logistics General, by choosing Taxes on Goods Movements India Basic Settings Excise Duties Using
Condition Technique and Account Determination .
These activities include one activity where you define a tax code for condition-based excise determination.

Master Data
Create condition records for all excise duties that apply, and enter the tax code for condition-based excise determination in each.

Day-to-Day Activities
When you enter a purchase order or other purchasing document, enter the tax code for condition-based excise determination in each line item. The system
then calculates the excise duties using the condition records you have created.
When the ordered materials arrive, you post the goods receipt and the excise invoice. The system posts the excise duty to the appropriate accounts for
deductible input taxes when you enter the excise invoice.

1.3.4.1 Creating Condition Records for Excise Duty

Procedure
1. In the command field, enter FV11 and choose .
2. Enter the condition type that you want to create a condition record for and choose .
The Key Combination dialog box appears.
3. Select the combination of objects that you want to create the condition record for.
On the dialog box, Control Code means "chapter ID."
So, for example, to create a condition record for a tax that applies to a combination of country, plant, and chapter ID, select Country/Plant/Control
Code .
4. Choose .
5. Enter data as required.
In the Tax Code field, enter the dummy tax code that you have defined.

Note
In transaction FV11 , if you have maintained the tax rate for Tax Classification in access sequence MWST, enter the actual tax code in the Tax
Code field.

6. Save the condition record.

1.3.4.2 Configuration of Tax Calculation Procedure TAXINN

Purpose
TAXINN is a tax calculation procedure for country version India and it supports condition-based excise determination. You need to configure this tax
calculation procedure.

Process Flow
Execute the following steps in the Implementation Guide to configure the tax calculation procedure TAXINN:
Procurement
1. Set up the following Access Sequences in the the IMG under Financial Accounting Financial Accounting Global Settings Tax on
Sales/Purchases Basic Settings Check Calculation Procedure Access Sequences :
JTAX
JST1
2. Set up the Condition Types for the following conditions in the IMG under Financial Accounting Financial Accounting Global Settings Tax on
Sales/Purchases Basic Settings Check Calculation Procedure Define Condition Types :
MM Excise Conditions

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JMOP IN: BED setoff %
JMOQ IN: BED setoff Qty
JAOP IN: AED setoff %
JAOQ IN: AED setoff Qty
JSOP IN: SED setoff %
JSOQ IN: SED setoff Qty
JMIP IN: BED inventory %
JMIQ IN: BED inventory Qt
JAIP IN AED inventory %
JAIQ IN AED inventory Qty
JSIP IN SED inventory %
JSIQ IN SED inventory Qty
JMX1 IN: A/P BED setoff
JAX1 IN: A/P AED setoff
JSX1 IN: A/P SED setoff
JMX2 IN: A/P BED inventor
JAX2 IN: A/P AED inventor
JSX2 IN: A/P SED inventor
JECP IN:A/P e-cess setoff
JECI IN: Eces inventory
JEX1 IN: A/P ecs setoffT
JEX3 IN: A/P ecs invT
LST/CST/VAT Conditions
JIPS IN Sales tax setoff
JIPC IN Central sales tax invoice
JIPL IN Local sales tax invoice
JIP5 A/P RM Deductible
Service Tax Conditions
JSRT A/P Service Tax
JEC3 A/P ECS for ST
3. Define the Tax Procedure according to the settings in the figures below.
You can do this in the IMG under Financial Accounting Financial Accounting Global Settings Tax on Sales/Purchases Basic Settings
Check Calculation Procedure Define Procedures .

4. Set up the following Account Key in the IMG under Financial Accounting Financial Accounting Global Settings Tax on Sales/Purchases Basic
Settings Check and Change Settings for Tax Processing .
VS6 Input Tax
5. Assign Tax Procedure to the country.
You can do this in the IMG under Financial Accounting Financial Accounting Global Settings Tax on Sales/Purchases Basic Settings
Assign Country to Calculation Procedure .
Sales
1. Set up the Condition Types for the following conditions in the IMG under Financial Accounting Financial Accounting Global Settings Tax on
Sales/Purchases Basic Settings Check Calculation Procedure Define Condition Types :
Excise Conditions
JASS IN A/R BED
JEXP IN A/R BED
JEXQ IN A/R BED
JEAP IN A/R AED %
JEAQ IN A/R AED Qty
JESP IN A/R SED %
JESQ IN A/R SED Qty
JCEP IN A/R CESS %
JCEQ IN A/R CESS Qty
JEXT IN A/R BED total
JEAT IN A/R AED total
JEST IN A/R SED total
JCET IN A/R CESS total
JECT IN A/R ECS total
LST/CST/VAT Conditions
JCST IN A/R CST
JCSR IN A/R CST Surcharge
JLST IN A/R LST
JLSR IN A/R LST Surcharge
Export Conditions
JFRE IN Frieght
JINS IN Insurance
2. Set up the Access Sequence in the the IMG under Financial Accounting Financial Accounting Global Settings Tax on Sales/Purchases Basic
Settings Check Calculation Procedure Access Sequences :
3. Set up the following Pricing Procedures according to the settings in the figures below.
You can do this in the IMG under Sales and Distribution Basic Functions Pricing Pricing Control Define And Assign Pricing Procedures .
JDEPOT (IN:Depot sale with formula)

JEXPOR (IN:Export sales with formula)

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JFACT (IN:Factory sale with formula)

JSTKTR (IN:Stock transfer with formula)

1.3.5 Formula-Based Excise Determination

Use
When you execute a business transaction involving materials that are subject to excise duty, the system automatically calculates the duty for you.

Prerequisites
In order for the system to be able to determine which rate of excise duty to apply, you must have maintained all the data on the Excise Rate Maintenance
screen, which you can access from the SAP Easy Access screen by choosing Indirect Taxes Master Data Excise Rate Maintenance .
You maintain the following types of data:
Plant master data
You assign each of your plants an excise duty indicator. You can use the same indicator for all the plants with the same excise status from a legal point of
view, such as all those that are in an exempt zone.
See also the information about manufacturers that are only entitled to deduct a certain portion of the duty (see Partial CENVAT Credit ).
Vendor master data
For each of your vendors with the same excise status from a legal perspective, you define an excise duty indicator. You must also specify the vendor type
for example, whether the vendor is a manufacturer, a depot, or a first-stage dealer. You must also stipulate if the vendor qualifies as a small-scale industry .
For each permutation of plant indicator and vendor indicator, you then create a final excise duty indicator.
Customer master data
Similarly, you assign the same excise duty indicator to each of your customers that share the same legal excise status.
Again, for each permutation of plant indicator and customer indicator, you then create a final excise duty indicator.
Material master data
Each material is assigned a chapter ID.
Excise tax rate
For every chapter ID and final excise duty indicator, you maintain the rate of excise duty.
If your business only qualifies for partial CENVAT credit , you must customize your system accordingly.

Activities
Let us consider an example to illustrate how the system determines which rate of excise duty to apply to a material. Assume you are posting a sale of ball
bearings to a customer. The system automatically determines the rate of excise duty as follows:
1. Looks up the customer master data to see what status you have assigned the customer.
2. Let's assume you've assigned the customer status 3.
3. Looks up the plant master data to see what status you have assigned the plant.
4. Similarly, your plant has status 2.
5. The system looks up the table under Excise Indicator for Plant and Customer to see what the final excise duty indictor is for customer status 3 and
plant status 2: It is 7.
6. The system determines the chapter ID of the ball bearing for the plant.
7. Lets assume the chapter ID at plant for the ball bearings is 1000.01.
8. Finally, the system looks up the table under Excise Tax Rate to see what rate of duty applies to chapter ID 1000.01 under status 7.

1.3.5.1 Material Master (Excise Data)

Definition
The part of the material master record that contains information relating to Indian excise duty.

Use
In conjunction with other data, this data is used to calculate excise duty on various transactions.
To maintain the data, from the SAP Easy Access screen, choose Indirect Taxes Master Data Excise Rate Maintenance, and then select the
following options described below.

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Structure
The excise part of the material master is divided into the following screens:
Chapter IDs
On this screen, you define the chapter IDs and corresponding descriptions as described in the excise tariff structure. This information is used when you create
excise invoices and is also shown in the various excise registers .
Material and Chapter ID Combination
On this screen, you maintain the excise data relating to your materials. For each material, specify:
Chapter ID
Whether the material can be sent to subcontractors (see Subcontracting )
The material type
This denotes, for example, whether the material is a raw material, a capital good this affects the CENVAT process or if it is a finished good on which
excise has been paid, to be covered by the Update of RG 1 and Part I Registers .
Whether you accept more than one goods receipt per excise invoice, and if so, whether the excise duty should be credited to the CENVAT account
immediately a goods receipt is posted (multiple credit) or not until all the goods receipts have arrived (single credit) (see Multiple Goods Receipts for a
Single Excise Invoice )
This information is valid for a given plant. If the information is valid for all of your plants, however, leave the Plant field blank.
Material Assessable Value
On this screen, you maintain the net dealer price and the assessable value of all materials that you send to subcontractors or for any other issue. These
values serve as the excise base value when the materials are issued, and tell the system how much excise duty to reverse from your CENVAT account.
CENVAT Determination
On this screen, you specify which raw materials are used to produce which finished (or semifinished) goods. The system uses this information to determine
whether it you can claim a CENVAT credit for a material.
Excise Tax Rate
On this screen, you specify for each chapter ID every possible rate of excise duty that might apply, so you must take into consideration each permutation of
plant and customer; and each combination of plant and vendor.
You can maintain the basic excise rates in the following forms:
Ad valorem
Specific
As a combination of both
For each rate, specify until which date it applies.
You can also maintain the additional excise duty and special excise duty in ad valorem form, should any apply. If you need to give these rates as a fixed sum,
use the Quantity Based AED and SED screen.
Additional Excise Rate
On this screen, maintain any cess applicable.
Exceptional Material Excise Rate
On this screen, maintain any exceptions that apply to the excise rates that you have defined. Exceptions can apply to a single material from all vendors, of to
a single material from one vendor only. If you have an exceptional rate for a customermaterial combination, you can maintain it here as well.
Sales Tax Setoff Percentages
On this screen, maintain the percentage of local sales tax on inputs that you can deduct against LST on outputs. The setoff amount is deducted from the
inventory valuation of the material. Currently very few states, for example, Maharashtra and Gujarat, participate in this scheme.

1.3.5.2 Vendor Master (Excise Data)

Definition
The part of the vendor master record that contains information relating to excise duty.

Use
In conjunction with other data, this data is used to calculate excise duty on various transactions.
To maintain the data, from the SAP Easy Access screen, choose Indirect Taxes Master Data Excise Rate Maintenance, and then select the
following options described below.

Structure
The excise part of the vendor master is divided into the following screens:
Vendor Excise Details
On this screen, you enter your vendors' tax numbers, which are used for various forms of correspondence and reports:
Excise registration number (and the range, division, and collectorate in which this is located)
Central sales tax (CST) number
Local sales tax (LST) registration number
Permanent account number (PAN)
In order for the system to be able to calculate which rate of excise duty to apply on purchases from the vendor, you must also:

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Assign it a vendor excise duty status (for more information about how this works, see Determination of Excise Duty Rates )
Specify what type the vendor is, for example, a manufacturer, first-stage dealer, or importer for 57AE returns
If the vendor qualifies as a small-scale industry (SSI), you must also specify:
What its SSI status is (which you must first have defined under SSI rates, see below)
Whether or not it is participating in the CENVAT scheme
SSI Rates
On this screen, you define the excise rates that apply to purchases from vendors that qualify as SSIs. You define one status for each band (or "slab") of sales
volume provided for by the law, and for each SSI status, the rates of excise duty that applies to that slab under the two schemes (see Excise Duty for Small-
Scale Industries ).
Excise Indicator for Plant and Vendor
On this screen, you define the final excise duty indicator (for more information about how this works, see Determination of Excise Duty Rates ).

1.3.5.3 Customer Master (Excise Data)

Definition
The part of the customer master record that contains information relating to Indian excise duty.

Use
In conjunction with other data, this data is used to calculate excise duty on various transactions.
To maintain the data, from the SAP Easy Access screen, choose Indirect Taxes Master Data Excise Rate Maintenance, and then select the
following options described below.

Structure
The excise part of the customer master contains the following information:
Customer Excise Details
On this screen, you enter your customers' tax registration numbers, which are used for various forms of correspondence and reports:
Excise registration number (and the range, division, and collectorate in which this is located)
Central sales tax (CST) number
Local sales tax (LST) registration number
Permanent account number (PAN)
In order for the system to be able to calculate which rate of excise duty to apply on sales to the customer, you must also assign it a customer excise duty
status (for more information about how this works, see Determination of Excise Duty Rates ).
Excise Indicator for Plant and Customer
On this screen, you define the final excise duty indicator (for more information about how this works, see Determination of Excise Duty Rates ).

1.3.5.4 Plant Master (Excise Data)

Definition
The part of the plant master record that contains information relating to Indian excise duty.

Use
In conjunction with other data, this data is used to calculate excise duty on various transactions.
To maintain the data, from the SAP Easy Access screen, choose Indirect Taxes Master Data Excise Rate Maintenance, and then select the
following options described below.

Structure
The excise part of the plant master is divided into the following screens:
Excise Indicator for Plant
On this screen, you enter your plants' tax registration numbers, which are used for various forms of correspondence and reports:
Central sales tax (CST) number
Local sales tax (LST) registration number
Permanent account number (PAN)
In order for the system to be able to calculate which rate of excise duty to apply on purchases for this plant, you must also assign it a plant excise duty status
(for more information about how this works, see Determination of Excise Duty Rates ).
Excise Indicator for Plant and Vendor
On this screen, you define the final excise duty indicator (for more information about how this works, see Determination of Excise Duty Rates ).

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Excise Indicator for Plant and Customer
On this screen, you define the final excise duty indicator (for more information about how this works, see Determination of Excise Duty Rates ).

1.3.5.5 Excise Duty for Small-Scale Industries

Use
Businesses that qualify as small-scale industries (SSIs those with, for example, no more than two premises and with a sales volume not exceeding an
amount specified by the government) need to pay only reduced rates of excise duty on their goods movements. The exact rate depends on the business's
annual sales volume (see below).
That means that when you make a purchase from an SSI, the system calculates a different rate of excise duty. Note that SSIs are not required to pay
additional excise duty or special excise duty.

Prerequisites
In order for the system to be able to calculate the correct rate of excise duty, you must have:
1. Defined the SSI statuses.
2. You define a separate SSI status for each of the various "slabs" (sales volume) (see Vendor Master (Excise Data) .
3. In the vendor master:
Assigned the vendor the SSI status that you have just defined.
If the vendor participates in the CENVAT scheme (see below), entered X (Vendor participating in CENVAT scheme).

Features
As far as SSIs are concerned, there are two schemes. Under the first, an SSI can opt out of the CENVAT scheme. In this case, they apply basic excise duty
at certain flat rates on all transactions. These rates vary according to their total annual sales.

Example
An SSI with sales of less than INR 100,000 would not apply any excise duty; those earning up to INR 400,000 would levy basic excise duty on all
materials at 2%, and so on.

Under the second scheme, whereby an SSI participates in the CENVAT scheme, the SSI pays excise duty at a percentage of the normal basic excise duty for
the material in question. Again, this percentage depends on the SSI's total annual sales.

Turnover (INR) Excise (%) SSI rate (% of excise) Effective SSI excise (%)

0100,000 15 60 9

100,000400,000 15 80 12

1.3.5.6 Configuration of Tax Calculation Procedure TAXINJ

Purpose
TAXINJ is a tax calculation procedure for country version India and it supports formula-based excise determination. You need to configure this tax calculation
procedure.

Process Flow
Execute the following steps in the Implementation Guide to configure the tax calculation procedure TAXINJ:
Procurement
1. Set up the Condition Types for the following conditions in the IMG under Financial Accounting Financial Accounting Global Settings Tax on
Sales/Purchases Basic Settings Check Calculation Procedure Define Condition Types :
Excise Conditions
JMOD IN: A/R BED
JNED IN: A/R NCCD
JAED IN: A/R AED
JSED IN: A/R SED
JCES IN: A/R Cess
JECS A/R Educational CESS
LST/CST/VAT Conditions
JIN1 IN: A/R CST
JIN2 IN: AR LST
JIN4 IN: A/R CST Surcharge
JIN5 IN: AR LST Surcharge
JIN6 A/R VAT Payable
JIN7 A/R CST Payable VAT

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Service Tax Conditions
JSE4 Service Tax
JES4 ECS on Service Tax
2. Set up the following Account Key in the IMG under Financial Accounting Financial Accounting Global Settings Tax on Sales/Purchases Basic
Settings Check and Change Settings for Tax Processing .
VS6 Input Tax
3. Define the Tax Procedure according to the settings in the figures below.
You can do this in the IMG under Financial Accounting Financial Accounting Global Settings Tax on Sales/Purchases Basic Settings
Check Calculation Procedure Define Procedures .

4. Assign Tax Procedure to the country.


You can do this in the IMG under Financial Accounting Financial Accounting Global Settings Tax on Sales/Purchases Basic Settings
Assign Country to Calculation Procedure .
Sales
1. Set up the Condition Types for the following conditions in the IMG under Financial Accounting Financial Accounting Global Settings Tax on
Sales/Purchases Basic Settings Check Calculation Procedure :
Excise Conditions
JMOD IN A/R BED
JEX2 IN A/R BED
JAED IN A/R AED
JEXA IN A/R AED
JNED A/R NCC duty
JEXN A/R NCCD
JSED IN A/R SED
JEXS IN A/R SED
JCES IN A/R CESS
JCED IN A/R CESS
JECS IN A/R EDU-CESS
JECX IN A/R EDU-CESS
LST/CST/VAT Conditions
JIN1 IN A/R CST
JIN2 IN A/R LST
JIN4 IN A/R Surcharge
JIN5 IN A/R LST Surcharge
JIN7 IN A/R CST in VAT
JIN8 IN A/R LST Value
Service Tax Conditions
JSE4 IN Service Tax
JES4 ECS on Service Tax
2. Set up the Condition Type UTXJ and assign the Access Sequence as JIND .
You can do this in the IMG under Financial Accounting Financial Accounting Global Settings Tax on Sales/Purchases Basic Settings
Check Calculation Procedure Define Condition Types .
3. Set up the following Account Key in the IMG under Financial Accounting Financial Accounting Global Settings Tax on Sales/Purchases Basic
Settings Check and Change Settings for Tax Processing .
MW3 Sales tax 3
MWSOutput tax
JN6 A/R VAT Payable
JN7 A/R CST Payable VAT
JN9 LST Value
JS6 A/R Service tax
JS7 A/R ECS on Service
4. Set up the following Pricing Procedures according to the settings in the figures below.
You can do this in the IMG under Sales and Distribution Basic Functions Pricing Pricing Control Define And Assign Pricing Procedures .
JDEPOT (IN:Depot sale with formula)

JEXPOR (IN:Export sales with formula)

JFACT (IN:Factory sale with formula)

JSTKTR (IN:Stock transfer with formula)

1.3.6 External Procurement (Domestic)

Purpose
This process illustrates how manufacturing plants can use the SAP system to procure excisable goods.
In addition to the standard procedure, you also have to capture and post the incoming excise invoice, and the system creates the appropriate entries in the

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excise registers.

Process Flow
1. You create a purchase order for the goods you want and send it to the vendor.
After a few days, the vendor sends you the goods together with an excise invoice.
2. When the goods arrive at your company, the warehouseman enters the goods receipt .
The system:
Creates a material document to record the goods receipt
Creates an accounting document to debit the inventory account and credit the GR/IR clearing account:

Creates a Part I entry in register RG 23A or 23C


Note that if you first want to post the goods to blocked stock, for any reason, do so using the standard procedure . The excise clerk then
captures the excise invoice as normal.
3. The excise clerk captures the excise invoice .
For information about what to do if the vendor sends the goods in more than one delivery, see Multiple Goods Receipts for a Single Excise Invoice .
4. The excise supervisor checks the excise invoice captured by the clerk, makes any changes necessary, and posts it .
The system automatically debits the excise duty to the excise duty accounts and credits the CENVAT clearing account:

It then creates a Part II entry in register RG 23A or 23C to record this posting.
5. You enter the vendor's invoice, following the standard procedure .
If the excise supervisor has reduced the amount of excise duty that is to be credited to the CENVAT account, the system adds the difference to the
material price.
The system also creates an accounting document. The document contains debit postings to clear the clearing accounts for goods receipts and
CENVAT; and a credit posting to create an open item on the vendor's account:

Alternatives
The above procedure is just one way of using the SAP system to handle incoming excise invoices. If your business processes differ from the procedure
described above, there are a number of alternatives available to you.

One-Step Procedure
In the procedure described above, the excise clerk captures the excise invoice and the excise supervisor posts it (the two-step procedure). If you want, you
can have one person perform both of these activities in a single step, using the transaction under Indirect Taxes Procurement Excise Invoice
Incoming Excise Invoice Central Processing Capture/Change/Cancel/Display/Post .

Capture Excise Invoice and Goods Receipt Combined


Steps 23 involve two different system transactions (goods receipt and excise invoice capture). You can combine these two steps one, if you wish, so that the
warehouseman can capture the excise invoice at the same time as he enters the goods receipt (see Goods Receipts and Incoming Excise Invoices Combined
).
If you want, he can even capture and post the excise invoice at the same time.

Capture Excise Invoice Before Goods Receipt


In the procedure described above, the goods receipt is entered before the excise invoice. However, your business processes may require you to capture the
excise invoice before the goods receipt.
When the warehouseman enters the goods receipt, the system adjusts the material value for any changes to the taxes that the clerk has made in the captured
excise invoice. An accounting document to debit the inventory account and credit the GR/IR clearing account is created.

1.3.7.1 Creating Purchase Orders


To create a purchase order, follow the standard procedure , but when you fill out the item information, enter the following data on the Invoice tab:
Enter a tax code.
If you do not, the system will not calculate excise duty or display it on the excise invoice create screen.
If you use condition-based excise determination, make sure you enter the tax code that you have defined for this purrpose.

Caution
If you are only eligible for partial CENVAT credit , you must use an appropriate tax code. If the CENVAT credit is less than the duty amount entered, the
system will automatically add the difference to the inventory value when you come to verify the invoice.

Select GR-based IV, to activate goods receipt-based invoice verification. During invoice verification this will enable the system to update the material
value to allow for any discrepancies between the taxes in the purchase order and the taxes stated by the vendor in the excise invoice.
The purchase order shows the excise duty and sales tax that you expect to pay. The taxes are calculated in the purchase order according to the vendor,
material, and tax code.
See also:
Condition-Based Excise Determination

1.3.7.4 Entering Goods Receipts


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1.3.7.4 Entering Goods Receipts

Use
In this procedure, you enter the goods receipts, following the standard procedure . In addition:
You enter the number of the excise invoice, if it is available
The system automatically creates an entry in Part I of the excise register RG 23A or RG 23C
This procedure only applies if the warehouseman is not entitled to enter excise invoices himself (see Goods Movements and Excise Documents Combined ).

Prerequisites
You have specified whether you want the system to create a Part I entry when you post goods receipts to blocked stock, for stock transport orders, and to
consumption stock. You do so in Customizing for Logistics General, by choosing Taxes on Goods Movements India Basic Settings Maintain
Excise Groups .

Procedure
1. From the SAP Easy Access screen, choose Logistics Materials Management Inventory Management Goods Movement Goods Receipt
For Purchase Order GR for Purchase Order .
2. In the top line, enter the purchase order number and choose .
A dialog box appears.
1. Enter data as required:
If you have not yet captured the excise invoice:
Leave the Excise Invoice field blank.
Fill out all of the other fields.
If you have already captured the incoming excise invoice, enter the excise invoice number.
1. To close the dialog box, choose .
2.
If you choose , the system will not make an entry in Part I of the excise register, in which case you must update the register later .
3. Check that all the line items are correct, and adjust them as required.
4. Save the goods receipt.

1.3.6.3 Entering and Verifying Invoices


Follow the standard invoice verification procedure, but select Calculate tax on the Vendor Items screen. The system proposes the deductible excise duty
items in the invoice document.

1.3.6.3.1 Invoice Reduction

The system enables you to reduce the invoice amount due to a vendor error, and it subsequently calculates the taxes accordingly. You enter the reduction at
item level.
For more information, see Invoice Reduction: Correcting Quantities or Values

Prerequisites
In Customizing for Materials Management (MM), under Logistics Invoice Verification > Incoming Invoice > Tax Treatment in Invoice Reduction , you have
assigned the tax treatment Tax reduction in complaint document to your company code.

Features
When you post an invoice with a reduced amount at item level, the system:
Generates a credit memo
As a result, the vendor is only paid for the invoiced amount minus the reduced amount.
Creates two accounting documents for:
Normal accounting
Credit memo

Activities
When you enter the invoice in the standard invoice verification transaction, at the item level:
1. In the Correctn ID field, choose Vendor Error: Reduce Invoice.
The system opens the Invoice Amount Acc. to Vendor field for input.
2. In the Invoice Amount Acc. to Vendor field, enter the amount as listed by the vendor, which is higher than the value the system displays.

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3. Choose Enter and finish entering the invoice as usual.
For more information, see Total-Based Invoice Reduction

1.3.7 External Procurement (Imports)

Purpose
This process shows you how to handle the countervailing duty (CVD) on imports, which is levied in place of excise duty. Unlike other forms of customs duties,
such as basic customs duty or special customs duty, you can credit CVD paid on imports to your CENVAT account.
You can also credit the national calamity contingency duty (NCCD) paid on imports of capital goods to the CENVAT account. The system ensures that the
NCCD value from the commercial invoice for imports is included in the NCCD field of the captured excise invoice.

Prerequisites

Vendor Master Record for Customs Office


Create a vendor master record for the customs office, so that you can create liabilities for the CVD (see step 3 in the process flow).

Condition Type for CVD


The system handles CVD using a condition type for planned delivery costs. Specify which condition type you use in Customizing for Logistics General, by
choosing Taxes on Goods Movements India Basic Settings Determination of Excise Duty Maintain Excise Defaults
For more information, see Planned Delivery Costs .

CVD Clearing Account


When you post CVD to a CENVAT account (see step 5 below), the system debits the CVD to the BED account and credits it to a CVD clearing account.
Specify which G/L account you want to use as the CVD clearing account, in Customizing for Logistics General, by choosing Taxes on Goods Movements
India Basic Settings Maintain Company Code Settings .

Condition Type for NCCD


You need to create condition type JNCD for the system to handle NCCD, which you can do by copying the standard condition type JCV1 . In Customizing
for Materials Management , choose Purchasing Conditions Define Price Determination Process Define Condition Types .

Process Flow
You create a purchase order for the goods that you want and send it to the vendor.
For each material that you will have to pay CVD on when it comes through customs, you enter the CVD as a pricing condition.
The vendor ships the goods to you.
When the goods arrive inIndia, they go through customs. The customs officers issue a bill of entry for the goods, which is in effect an invoice for the CVD on
the goods. Once they have inspected the goods, they send them on to you.
The goods arrive at your plant, together with the bill of entry. In order to record the bill of entry in the system:

The excise clerk enters an invoice for the bill of entry


In Accounts Payable (FI-AP), the system creates a new vendor item for the CVD at the customs office. The item is offset to the CVD clearing account.
He then captures an excise invoice for the bill of entry
The warehouseman posts the goods receipt .
The excise supervisor posts the excise invoice .
The excise clerk enters the vendor invoice for the materials, following the standard procedure .

1.3.7.1 Creating Purchase Orders

Use
You follow this procedure to create a purchase order for imports.
Country Version India contains a sample pricing procedure for imports, JIMPOR.

Procedure
Create a purchase order for the materials that you want to order using the standard procedure , but when you fill out the item information, make sure that you
observe the following:
Invoice tab
Enter a zero-rate tax code

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Deselect GR-based IV
Conditions tab
1. Select the countervailing duty (CVD) condition and choose .
2. In the Rate field, enter the rate of CVD that will be levied on the material when it arrives at customs.
3. In the vendor field, enter the vendor master record that you have created for the customs office.
Then, once the vendor has delivered the goods and you enter the invoice, the system will automatically credit the CVD liability to the customs office.

1.3.7.2 Entering Invoices for Bills of Entry


To enter an invoice for a bill of entry, you follow the standard invoice verification procedure , but make sure you observe the following:
Header Data
Basic data tab
In the Amount field, enter the amount of countervailing duty (CVD) stated on the bill of entry in rupees.
Do not enter any other taxes.
Details tab
Assuming you specified in the purchase order that the CVD was to be paid to the customs office, the system shows the customs office as the vendor. If
not, enter the customs offices vendor master record in the Inv. party (Invoicing party) field.
Line Items
On the PO reference tab, enter data as follows:
1. Enter the number of the purchase order related to this delivery.
If you only created one purchase order for the goods, enter the purchase order number and select Planned delivery costs.
If you sent more than one purchase order to the vendor and it sent you all of the ordered materials together in one shipment:
1. Choose .
2. Enter all of the purchase order numbers in the table.
3. Select Planned delivery costs.
4. Select Deliveries and deselect Returns .
5. Choose Adopt .
In both cases, the system displays the line items in the line item overview.
1. For each line item:
In the Amount field, enter the amount of CVD on the item (if you have more than one item, you may have to work the amount out manually).
In the Quantity field, enter the quantity of goods on the invoice.
Enter a zero-rated tax code.
1. Choose Simulate .
2. A dialog box appears with a list of the postings that will be made to Financial Accounting (FI).
3. Choose Post .

1.3.7.3 Capturing Excise Invoices for Bills of Entry


1. From the SAP Easy Access screen, choose Indirect Taxes Procurement Excise Invoice Incoming Excise Invoice Individual Processing
Capture/Display .
2. In the top line:
1. Select Capture Excise Invoice
2. Select Purchase Order .
3. Enter the purchase order related to the bill of entry.
4. Choose .
A dialog box appears.
1. Enter the number of the invoice that you entered for the bill of entry and choose .
2. If you need to enter any other purchase orders, enter the number in the top line as for step 3.
3. Note that this time, you do not need to enter the invoice number.
4. Enter other data as required.
5. Note that the countervailing duty is displayed in the basic excise duty fields.
6. Save the excise invoice.

1.3.7.4 Entering Goods Receipts

Use
In this procedure, you record the receipt of the goods from the vendor abroad, following the standard procedure .

Procedure
1. From the SAP Easy Access screen, choose Logistics Materials Management Inventory Management Goods Movement Goods Receipt
For Purchase Order GR for Purchase Order .
2. In the top line, enter the purchase order number and choose .
3. A dialog box appears.
4. Enter the number of the excise invoice that you created for the bill of entry and choose .
5. If you need to enter more purchase orders for example, if you sent the vendor more than one purchase order and it sent you back all the ordered

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materials in a single delivery for each purchase order, enter the number in the top line and choose .
6. Check that the line items in the goods receipt are correct.
7. Save the goods receipt.

Result
The system creates:
A goods receipt document
An accounting document
An entry for the goods receipt in Part I of the appropriate excise register

1.3.7.5 Posting Excise Invoices


1. From the SAP Easy Access screen, choose Indirect Taxes Procurement Excise Invoice Incoming Excise Invoice Individual Processing
Change/Display/Post/Cancel .
2. Select Post CENVAT and Vendor Excise Invoice .
3. Enter the number of the excise invoice that you created for the bill of entry.
4. Check that the data is correct.
5. Choose Simulate CENVAT .
6. A dialog box appears with a list of the accounting entries that will be made to transfer the CVD from the clearing account to the excise duty account.
To close the dialog box, choose .
7. If the data is correct, choose Post CENVAT .
The system posts the CENVAT and creates a corresponding entry in Part II or the appropriate excise register.

1.3.8 Subcontracting

Use
If you work with subcontractors, there are two ways of handling the excise invoice on the goods that you provide them with:
Subcontracting without payment of excise duty
Subcontracting under full payment of duty
Country Version India supports both of these approaches.
For information about the standard subcontracting procedure in the SAP System, see Subcontracting .

1.3.8.1 Subcontracting Without Payment of Excise Duty

Purpose
When you issue materials to a subcontractor, you need to keep track of what materials you have issued and when they have to be returned by.
The reason for this close monitoring has to do with Indias tax law. Under excise law 57AC, when you send materials to a subcontractor for processing, you
are not required to pay any excise duty, even though the materials have left your premises. However, if the materials have not been returned to you within a
given length of time specified by the law (in 2000, 180 days), you will have to reverse any excise credit that you posted when you purchased the materials
(see Completion, Reversal, and Recredit ). In the case of materials that you have manufactured in-house, you will have to post credit entries to the extent of
the CENVAT rate of the assessable value of the materials.

Prerequisites
You have made the Customizing settings in Customizing for Logistics General, by choosing Taxes on Goods Movements India Business
Transactions Subcontracting .
You have made the Customizing settings for the accounting postings in Customizing for Logistics General, by choosing Taxes on Goods Movements
India Account Determination .
You have set up the number range for the subcontracting challan in Customizing for Logistics General, by choosing Taxes on Goods Movements
India Tools Number Ranges .
You have maintained the subcontracting information in the material masters (see Material Master (Excise Data) ).
You have made the following settings in Customizing for Materials Management Inventory Management and Physical Inventory:
Goods Issue/Transfer Postings Define Screen Layout .
For movement type 541, in the Change View Field Selection Overview, pick the 541 movement type and in the Select Group Materials Management , make
the Purchase Order field an optional entry.
Output Determination Maintain Output Types
Output Determination Assign Forms and Programs
Output Determination Printer Determination Printer Determination by Plant/Storage Location

Process Flow
1. You create a subcontract order for the goods that you want to subcontract.

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2. You create a transfer posting order for the materials that are to be sent to the vendor. This document is, however, for your own use only.
3. You create a subcontracting challan on the basis of the transfer posting order.
4. This is the consignment document that you will send to the subcontractor along with the materials that are to be processed.
5. You send the materials to the subcontractor, along with a printout of the subcontracting challan.
6. The subcontractor processes the materials and returns the finished goods. When the goods are delivered back to you, the storeperson posts the goods
receipt and the challan.
7.
The delivery may not necessarily cover all the goods from the challan: It may also include goods from a number of different challans. The SAP functions
allow for this eventuality.
8. The excise department reconciles the goods receipt against the challan, thereby accounting for the return of the materials that you have sent for
subcontracting.
9. The challans here include those that have been captured online at the time of goods receipt and those entered manually.
10. You create a list of the outstanding challans .
11. You complete the challan .
If a subcontractor fails to return all the materials within the time allotted, you have to scrap the material by specifying it as such in the bill of material for the
parent material then assigning the bill of material to the subcontracting purchase order. If the scrap generated is not returned by the subcontractor, excise duty
relevant to the scrap generated has to be paid. If this scrap is returned after the duty has been paid, an excise journal voucher should be created to reverse
the excise duty paid.
Alternatives
The procedure given in step 5 shows how to enter the goods receipt using the old Goods Movement transaction. If you want to use the new Goods
Movement transaction, MIGO, see Entering Goods Receipts and Subcontracting Challans Together .

1.3.8.1.1 Subcontracting Challan

Definition
A document that you use to issue and track subcontracting work. It allows you to make sure that all the materials you have sent to the subcontractor for
processing are returned.

Note
The challan is also widely known as the 57F4 challan, after the law under which it was defined up until the 2000 budget. This law has now been superceded
by a new one, 57AC.

Use
You create challans from transfer orders to accompany any materials that you send to subcontractors under rule 57AC. In this respect, they are an extended
form of delivery note, with additional information about the excise duty on each material that you have supplied. Materials that are not liable to excise duty do
not have to be included in the challan.
As the subcontractors return the finished goods to you, you record the returns in the challan, to make sure that all are returned within the allotted time limit.
If the finished goods returned to you by the subcontractor are of substandard quality, you can also create a subcontracting challan from the returns order.

Structure
The challan consists of a header and line items. The header, in addition to organizational data, allows you to enter:
Preprinted number
Additional data
Identification marks
Nature of processing
Furthermore, each challan has two numbers, an internal document number and a challan number, which the system assigns to the challan when you save it.
From a business perspective, this is the most important number. Each challan also has a status, which shows you what stage in processing it is at.
The line items are copied across from the transfer posting when you create the challan. You can also enter additional data for each item.

1.3.8.1.1.1 Processing Subcontracting Challans


To access the individual functions shown in the table, from the SAP Easy Access screen, choose Indirect Taxes Procurement Subcontracting
Subcontracting Challans

Function Follow-on menu path What you should know

Create a challan Create . See Creating Subcontracting Challans

Print a challan Create or Change See Printing Subcontracting Challans .


.

Change a challan Change . You can only change challans with the status Posted .
Furthermore, you can only change data that relates to
the challan printout. If you need to change accounting
data, you must delete the challan and create a new
one.

Cancel a challan Change . To save the cancellation, save the challan.

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The challan status changes to Canceled .

Complete a challan Complete/Reverse/Recredit See Completing Subcontracting Challans .


The challan status changes to Completed .

Reverse the excise duty credit Complete/Reverse/Recredit See Reversing Excise Duty Credit .
The challan status changes to Reversed .

Recredit the excise duty Complete/Reverse/Recredit See Recrediting the CENVAT Account .
The challan status changes to Reversed/completed .

Reconcile quantities Reconcile Quantity See Reconciling Quantities .


The challan status changes to Assigned/fully
reconciled .

1.3.8.1.1.1.1 Creating Subcontracting Challans


1. From the SAP Easy Access screen, choose from the SAP Easy Access screen, choose Indirect Taxes Procurement Subcontracting
Subcontracting Challans Create .
2. Enter the following data:
Material Document: The transfer posting document number
Material Document Year: The year that you created the transfer posting document
Excise Group
Series Group
1. Choose .
The system calculates the excise duty for the materials.
1. Specify which excise invoice the materials are from.
2. Once you have assigned the materials to an invoice, the system reads how much excise duty you have paid on the materials that you are sending.
3. If you want to print the challan straight away, select Print immediately on the Posting tab.
4. Change the posting date, if necessary.
5. This is the date from which the system calculates the return due date. It is set by default to the days date. However, you can change it you need to.
6. Save the document.

1.3.8.1.1.1.1.1 Calculation of Excise Duty on Materials for


Subcontractors

Use
When you send materials to a subcontractor for processing, you have to determine how much excise duty is applicable. This of course depends on the base
value. The different amounts of excise duty (basic excise duty, special excise duty, and additional excise duty) are printed on the subcontracting challan.
Thus, when you create a subcontracting challan, the system determines the base excise value of each material and the amount of excise due automatically.

Prerequisites
You have maintained the materials excise data (see Material Master (Excise Data) ).

Features
When determining the excise duty for materials purchased from third parties, the system uses the excise rate from the latest excise invoice for the material
received from the vendor.
Where materials manufactured in-house are concerned, the SAP System determines the taxable value of the material on the basis of the following
information, in this order:
1. The latest excise invoice value for the material
2. The material's assessable value (that is, the price determined by an external auditor)
3. The materials net dealer price (the materials list price; the price at which you sell the material to customers)

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