Setup Requirements for Service Tax in the O2C Cycle

This table lists the service tax setup requirements for the O2C cycle in India:

Setup Requirement	Comments	Cross-Reference
Map the service tax to the business unit.	You use the Service Tax Unit definition program (P75I704) to map an excise branch/plant to a service tax operating unit.	See Mapping Business Units to Service Tax Operating Units.
Enter localized category codes.	You attach category code values for item price groups in the Item Branch/Plant (P41026) program. For customer groups, you attach category codes values in the Address Book (P01012) and Customer Master Information (P03013) programs.	See Assigning Localized Category Codes to Items.
Verify that the adjustment name is set up in UDC table 40/TY.	You use the 40/TY UDC table to set the adjustment name.	n/a
Set up advanced pricing tax adjustments.	You use the Price & Adjustment Details Revisions program (P4072) to enter price adjustment details.	See Entering Price Adjustment Details for India Taxes.
Enter tax type rule information.	You use the Tax Rules Setup program (P75I072) to define tax rules and parameters.	See Defining Tax Rules.
Enter tax types and tax regimes for price adjustments.	You use the Relation Adjustment Name / Tax Type program (P75I006) to enter the tax type and tax regime for a price adjustment name.	See Entering Price Adjustment Details for India Taxes.
Calculate the service tax using localized advanced pricing.	Use the Sales Order Entry program (P4210) to enter sales orders and the Update Price program (R42950) to recalculate prices and costs.	See Understanding Advanced Pricing for India Taxes. See Calculating Taxes Based on Landed Costs.
Run the Service Tax Reclassification AR program (R75|700B).	Run the Service Tax Reclassification AR program (R75|700B) 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 within 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.	See Generating Reclassification Journal Entries for Service Tax Receipts.