CST not populating in PO

[former_member221515]

Hello,

We have a scenario where vendor charges 12.36% Service Tax and 2% CST on single line item in PO. To meet this requirement, we created one Tax Code "YA"

We are using deferred tax (in Service Tax) concept where Service Tax amount is transferred from Interim Account to Final account after running deferred tax program. For this purpose, we created one Target Tax Code "Y1" and assigned it to Tax Code "YA" in FTXP --> Properties.

Because of target tax code, system in not populating CST Amount in PO (refer screenshot - 1st half).

When I removed target tax code from Tax Code "YA" system populated CST Amount in PO (refer screenshot - 2nd half) which is correct.

Please let me know what we can do. I require target tax code in tax code because I need to run deferred tax for service tax.

Please suggest

--

Deepak

[Former Member · Accepted solution]

With and without form C must be having two different tax codes. We can use same CST condition for these two different tax codes.Based on tax codes you can identify invoices posted.

[former_member221515 · Accepted solution]

I will remove JIPC Condition and maintain JVCS Condition for my tax code for which its giving wrong CST calculation and I will check. I hope this process is correct.

[former_member192897 · Accepted solution]

Yes, You must proceed with JVCS. It will work in your case.

[Former Member · Accepted solution]

Yes, remove JIPC and use JVCS in the two different tax codes. It should work.

[former_member221515 · Accepted solution]

I tried same with JVCN where VAT credit is not available. Its not coming.

For CST - Its coming when we use JVCS.

For VAT (where VAT credit is not available), its not coming when we use JVCN.

Please help me which Condition Type we need to use for VAT where VAT credit is not available

[former_member192897 · Accepted solution]

Check with JVRN once.

[jpfriends079]

Additional Info:

I hope you are aware there was a changes to Service Tax law from Indian Union Budget 2011-2012 onwards. And there is no deferred tax concept parctised in India for service tax. If your client is still following the same. Then there can be a statutory issue related tax evasion.

Regards, JP

[former_member221515]

Hello Jyoti,

I agree with you. But client is following old process. In this process, it will be surety that client will take service tax credit only after making payment. So it is correct.

Please help

[jpfriends079]

Let me give you little background to Service Tax (ST).

As per Indian Union Budget 2011, vide notification 18/2011-ST.

• For Service Provider(SD/FI): ST is payable on accrual basis and not on receipt basis. So, there is no deferred thing. Further, ST is payable either at the time invoice is created or when payment is received or whichever is earlier.
• For Service Receiver(MM/FI): ST will no longer be a deferred tax, as there is a change in the input credit laws. The credit on input services can be availed on receipt of invoice. However, the payment has to be made within three months.

Further, ST is liable to be paid at the earliest. Irrespective, whether only the service is provided or invoicing or payments are yet to be done. This means booking of ST credit now shifts to booking of invoice instead of time of payment.

How this can be dealt in SAP, there are some guidelines published by SAP in following SAP Note:

- Note 1571186 - Changes to Service Tax from Indian Union Budget 2011-2012

And also refer .zip file attached in it. Which explains, if you are currently using deferred tax program. How to phase out and align with newer laws.

I hope that helps.

Moderator Remarks:

Use Internationalization and Unicode instead of SAP ERP - Logistics Materials Management (SAP MM) for CIN related queries.

Thanks, JP

[Former Member]

Yes, you are correct.

[former_member221515]

Then why we need to use JVRN and not JVCN.

Because we are procuring some capital goods and there is some installation charges. Hence we created tax code with JVCN. But inspite of this, VAT is not getting populated with target service tax code.

Please help

--

Deepak

[Former Member]

Use JVCS for CST. It will work.

I am giving you below link for entire conditions and usage. Its very helpful.

[Former Member]

Also read below thread for VAT. It will resolve your issue

http://scn.sap.com/thread/1416888

[Former Member]

Try JVRN for no credit and JVRD for Credit for VAT.

[former_member221515]

I understand, JVCN is for Capital Goods (non credit) and JVRN is for Input Goods. In my scenario, we are purchasing capital goods.

Hence we are using JVCN. Please let me know if my understanding is correct for JVCN and JVRN. We have configured accordingly.

[Former Member]

JIPC condition types are to be used in sales.

[former_member221515]

I am using JIPC - for CST - again form C and JVCS for CST without form C. Whether is it correct to use two conditions types for differentiating CST tax code - one for with Form C and other without Form C. If no then how to identify invoices posted with CST against form C and without form C

[Former Member]

I see two problems here.

1. You used wrong tax condition JIPC. Try using JVCS

2. you used deferred tax for services and cst. You need to ensure that both used conditions for CSt. What I doubt is you might have used services deferred tax but CST condition is missing.

I am not sure if SAP supports deferred tax functionality for CST as well.

[former_member190537]

Hello,

Normally we use JVCS but you were using JIPC for CST. Please check in OBYZ, what is maintained for your condition type in 'From' & to'.

Also click on analysis tab in PO-Taxes, whether system is able to find condition record for CST condition type or not?

Thanks and Regards

Mahesh Naik

[former_member221515]

I have checked PO --> Taxes. Its showing "Condition record found. Please find attached image. In from & to in condition type, its showing "Today's date" to "31.12.9999.x`

What difference it will make if we use JIPC or JVCS. How these two condition types are different from each other?

[former_member221515]

I tried same with JVCN where VAT credit is not available. Its not coming.

For CST - Its coming when we use JVCS.

For VAT (where VAT credit is not available), its not coming when we use JVCN.

Please help me which Condition Type we need to use for VAT where VAT credit is not available