(IND) Working with Service Tax

This chapter discusses how to:

Map business units to service tax operating units.
Generate reclassification journal entries for service tax payments.
Generate reclassification journal entries for service tax receipts.
Update the service tax balance information.
Pay the transportation agency.

Mapping Business Units to Service Tax Operating Units

This section provides an overview of mapping business units to service tax operating units and discusses how to map an excise branch/plant to a service tax operating unit.

Understanding the Mapping of Business Units to Service Tax Operating Units

You use the Service Tax Unit definition program (P75I704) to map an excise branch/plant to a service tax operating unit. The Service Tax Cross Reference program updates the Service Tax Cross Reference table (F75I704).

Forms Used to Map a Business Unit to a Service Tax Operating Unit

Form Name	FormID	Navigation	Usage
Work with Service Tax Cross Reference	W75I704A	System Setup (G75ISVT3), Service Tax Unit definition	Review a list of business unit and service operating unit cross-references.
Service Tax Cross Reference	W75I704B	Click Add on the Work with Service Tax Cross Reference form.	Map a business unit to a service tax operating unit.

Mapping a Business Unit to a Service Tax Operating Unit

Access the Service Tax Cross Reference form.

Business Unit

Enter an alphanumeric code that identifies a separate entity within a business for which you want to track costs. For example, a business unit might be a warehouse location, job, project, work center, branch, or plant. You can assign a business unit to a document, entity, or person for purposes of responsibility reporting. For example, the system provides reports of open accounts payable and accounts receivable by business unit to track equipment by responsible department. Business unit security might prevent you from viewing information about business units for which you have no authority.

Service Operating Unit

Enter a number that identifies an entry in the address book system, such as an operating unit that has been set for a service provider.

Generating Reclassification Journal Entries for Service Tax Payments

This section provides an overview of journal entry reclassification for service tax payments and discusses how to:

Generate reclassification journal entries for a service tax payment.
Set the processing options for Service Tax Reclassification AP (R75I700A).

Understanding Journal Entry Reclassification for Service Tax Payments

Run the Service Tax Reclassification AP program to review the service payments for a defined period and also determine whether the tax lines require classification. If the processed line corresponds to a recoverable tax line within the service tax regime, this program generates a reclassification journal entry with credit information for the account associated with AAI item 7530 and debit information for the account associated with AAI item 4230. The system uses the GL offset in the cost rule, payment batch number, document number, and GL date to generate a reclassification JE.

The system stores the reclassification data in the Service Tax A/P File (F75I741).

Generating Reclassification Journal Entries for a Service Tax Payment

Select Daily Processing (G75ISVT1), Service Tax Reclassification AP.

Setting Processing Options for Service Tax Reclassification AP (R75I700A)

Processing options enable you to specify the default processing for programs and reports.

General

Mode	Specify whether the system generates the report in proof or final mode. Values are: Blank: Proof mode. 1: Final mode.
Date - From	Specify the beginning payment date for which to review service tax payments and, if applicable, create reclassification journal entries for Accounts Payable.
Date - Thru	Specify the ending payment date for which to review service tax payments and, if applicable, create reclassification journal entries for Accounts Payable.
Document Type	Specify a user-defined code from UDC table 00/DT that identifies the origin and purpose of the transaction. JD Edwards EnterpriseOne reserves several prefixes for document types, such as, vouchers, invoices, receipts, and timesheets. Examples are: AD: Asset Disposal CD: Container Deposits AJ: Service Billing Adjustments

Generating Reclassification Journal Entries for Service Tax Receipts

This section provides an overview of journal entry reclassification for service tax receipts and discusses how to:

Generate reclassification journal entries for a service tax receipt.
Set the processing options for Service Tax Reclassification AR (R75I700B).

Understanding the Journal Entry Reclassification for Service Tax Receipts

Run the Service Tax Reclassification AR program to review the receipts for a defined period and also determine whether the tax lines require classification. If the processed line corresponds to a recoverable tax line available the service tax regime number, this program generates a reclassification journal entry with credit information for the account associated with AAI item 7585 and debit information for the account associated with AAI item 4385. The system uses the GL offset in the cost rule, payment batch number, document number, and GL date to generate a reclassification journal entry.

The system stores the reclassification data in the Service Tax A/R File (F75I731).

Generating Reclassification Journal Entries for a Service Tax Receipt

Select Daily Processing (G75ISVT1), Service Tax Reclassification AR.

Setting Processing Options for Service Tax Reclassification AR (R75I700B)

Processing options enable you to specify the default processing for programs and reports.

General

Mode	Specify whether the system generates the report in proof or final mode. Values are: Blank: Proof mode 1: Final mode
Date - From	Specify the beginning receipt date for which to review service tax receipts and, if applicable, create reclassification journal entries for Accounts Receivable.
Date - Thru	Specify the ending receipt date for which to review service tax receipts and, if applicable, create reclassification journal entries for Accounts Receivable.
Document Type	Specify a user-defined code from UDC table 00/DT that identifies the origin and purpose of the transaction. JD Edwards EnterpriseOne reserves several prefixes for document types, such as, vouchers, invoices, receipts, and timesheets. Examples are: AD: Asset Disposal CD: Container Deposits AJ: Service Billing Adjustments

Updating Service Tax Balance Information

This section provides an overview of the service tax balance update and discusses how to:

Print the Supplementary TR-6 challan.
Set the processing options for Supplementary TR6 (R75I705).

Understanding the Service Tax Balance Update

Run the Supplementary TR6 report to review the service tax balance and print the Supplementary TR-6 Challan. You must run this report and submit it to the tax authorities on a monthly basis.

The Supplementary TR report updates the Service Tax Cenvat File - 09 table (F75I750) with the challan number, date, and the bank address number.

Printing the Supplementary TR6 Challan

Select Periodic Processing (G75ISVT2), Supplementary TR6.

Setting Processing Options for Supplementary TR6 (R75I705)

Processing options enable you to specify the default processing for programs and reports.

Process

Enter '1' to process in Final Mode. Leave blank to process in Proof Mode

Specify whether the system updates the tables in proof or final mode. Values are:

Blank: Proof mode. The system prints a report that lists all selected records, as well as a message that indicates whether they will be processed. The system does not update any tables in proof mode.

1: Final mode. The system updates the Service Tax Cenvat File -09 - IND table (F75I750).

Select

1. Enter the Month to be informed in the TR6 report	Specify a number that corresponds to the month in a calendar year. For example, for the month of March, enter 3.
2. Enter the Year to be informed in the TR6 report	Specify a four-digit fiscal year. You must always use the year in which the first period ends. For example, a fiscal year beginning October 1, 2007 and ending September 30, 2007 is fiscal year 2007.

Defaults

1. Enter the TR6 Challan Number	Specify a challan number under which the taxes are paid to the tax authorities. The banks authorized to collect tax gives the challan number to the service provider.
2. Enter the TR6 Challan Date	Specify the date on which the challan is deposited to tax authorities.
3. Enter the TR6 Deposit Bank Address Number	Specify a number that identifies an entry in the JD Edwards EnterpriseOne Address Book system, such as employee, applicant, participant, customer, supplier, tenant, or location.
4. Enter the Head of Account Code	Specify a user-defined code from UDC table 75I/HA that identifies the head of the account. This value represents the government account heads to which the credit from TR6 must be accounted. Examples are: 001: Minor Head-Telephones 002: Sub-head-Tax collections 003: Minor Head-General Insurance

Paying the Transportation Agency

This section provides an overview of payments to the transportation agency.

Understanding the Payments to the Transportation Agency

During transportation, the consignee pays the service tax if freight to pay is mentioned in the consignment note and the supplier pays the service tax if freight paid is mentioned in the consignment note.

When you receive the invoice from the transportation agency, verify that a service tax was not calculated. You calculate the service tax and education cess on service tax and pay the voucher amount minus the withholding amount to the transportation agency. You pay the service tax amount to the tax authority and recover it when you settle the service tax.

Service tax does not apply in these cases:

During the transport of goods for a single customer when the freight payment is lesser than Rs. 1500.
During the transport of goods for more than one customer when the freight payment is less than Rs. 750 for each customer.

In either case, when the freight payment is more than the limits mentioned, you pay the service tax on the full amount without any deduction.

When a company creates a purchase order, it specifies whether the service is liable for service tax. If so, the system adds a tax line for the service tax so that the tax can be identified and reclassified to a final tax credit account during the bill payment. The system calculates the service tax by using standard functionality of landed cost.

S and ST are the landed cost rule lines set up for service line and tax line respectively. Service line includes items defined as a service. Typically, you pay the service tax and the education cess on the service tax to the supplier. In this case, the service tax and the education cess are identified as ST in the landed cost rule. In case of transportation agency, you issue the tax payments to the government. Therefore, you need to deduct the tax amount from the supplier's invoice. In this case, the service tax and the education cess are negated and identified as S so that they can be deducted from the supplier's invoice

During the voucher match process, if a purchase order includes a service line, information needed for service tax reports in India is created in a file.