21 Understanding Purchase Tax
This chapter contains the following topics:
21.1 Overview of Purchase Tax
Purchase tax is the tax levied by the state government on the purchase of goods. The buyer pays the tax for the goods that are procured from the dealer. The dealer remits the collected tax to the tax authorities.
Purchase tax is applied to a wide range of goods. A voucher is created and includes the details about the goods sold, as well as the price and tax. The vouchers are posted for the tax calculation.
To claim a purchase tax exemption, vouchers are attached with concession forms. The forms show the voucher details for claiming the tax exemption. The landed cost component enables the calculation of the purchase tax for the voucher. The purchase tax is updated when the appropriate landed cost rule is associated with the voucher.
21.3 Software Solution for Purchase Tax
To meet the purchase tax requirements specified by the tax authorities, the JD Edwards EnterpriseOne programs enable you to:
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Update the purchase tax details in the voucher for a supplier.
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Enter and revise voucher and purchase tax details in the forms used to claim tax exemptions.
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Generate purchase tax reports for the vouchers submitted.
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Print a list of vouchers with pending forms.
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Generate a list of vouchers reversed.
21.4 Setup Requirements for Purchase Tax
This table lists the purchase tax requirements for India:
| Setup Requirements | Comments | Cross-Reference |
|---|---|---|
| Assign tax types to tax regimes. | You use the Relation Tax Reg/Tax Type Inf program (P75I005) to specify tax types for tax regimes. | See Assigning Tax Types to Tax Regimes. |
| Define tax registration details. | You use the Tax Registration Details program (P75I210) to enter the tax registration details for an address book record, such as a business unit, customer, or supplier. You obtain the tax registration details for the address book record from the local tax authorities. | See Setting Up Tax Registration Details. |