VAT Recovery

[Former Member]

Hi All,

Earlier we use to make the payment to suppliers for full value of the bill including VAT amount and buyer use to avail the input VAT benefits accordingly.

Present amendment in VAT insists the buyer only on specific purchases to reocver the VAT portion amount from the total bill amount of supplier, and remit that VAT amount to the government department. Also the buyer will avail the input VAP benefits for the same.

eg. S supplier bill value is Rs.104 inclusive VAT, B buyer will make payment only of Rs.100 to S supplier, and balance of Rs.4 will be remitted to Govt. dept.

From the prospective of finance, is there any provision in SAP B1 to accomodate the said issue.

Regards

N.Narayana Swamy

[Former Member · Accepted solution]

Hi Satish Kumar,

Your understanding is right, I require the same pattern the entries should get posted in SAP.

Vendor account should get credted for Rs.100, and the remaining balance of Rs.4 which need to be remitted to the government should get credted to seperate gl account.

So, that when I make outgoing payment for Rs.4 to Govt. dept. this particular account will gets balanced.

Please do let me know in case you require further information on this.

Thank you in advance.

Regards

N.Narayana Swamy

[former_member200818 · Accepted solution]

Note: I request you to kindly contact your companies accountant before doing this. Do try this in test system only.

You can try using tax combination that suites this requirement. You can see how BED + VAT tax combination created to understand better.

The point here is use sign for Special VAT (to credit) in formula.

Please note once you create this combination, AP Invoice may be posted to 100 INR but tax ledgers will be debited and credited for equal amounts.

Hope the information is helpful.

Thanks & Regards

Satish

[former_member200818]

>> Present amendment in VAT insists the buyer only on specific purchases to reocver the VAT portion amount from the total bill amount of supplier, and remit that VAT amount to the government department. Also the buyer will avail the input VAP benefits for the same.

>> eg. S supplier bill value is Rs.104 inclusive VAT, B buyer will make payment only of Rs.100 to S supplier, and balance of Rs.4 will be remitted to Govt. dept.

>> From the prospective of finance, is there any provision in SAP B1 to accomodate the said issue.

Note: If this is a legal requirement, i would kindly request you to contact LPE of your region.

I would like to reproduce the scenario, if you could provide more details in this regard.

Based on your example, AP Invoice (bill value) would be created for 104 INR inclusive VAT. 100 INR has to be paid to supplier a/c and 4 INR has to be paid to Govt. AP Invoice would have to be closed once these transactions are completed.

Creating AP Invoice would post 104 INR to supplier a/c by default, 4 INR to VAT Receivable (Input Tax).

Are you expecting the account posting to change like supplier a/c to be credited for 100 INR, and another tax account required to which 4 INR to be credited? In this case, you can try using tax combination that suites this requirement.

Would appreciate if you could provide me these details.

Regards

Satish