Regarding Reverse charge mechanism

[Former Member]

Hi SAP Experts,

I am doing configurations for Service Tax- reverse charge mechanism (Case 2:- Abatements without service tax credit (Expense out)

I have created 3 condition types for this as

ZAS2	ZAE2	ZSA2
Offset entry for SECess for abatement	Offset entry for ECS for abatement	negative condition for service tax abatement

Now i want to now what % needs to be maintained in FV11 for below mentioned scenarios

1)Service provided by GTA in respect to transportation of goods by road,where person liable to pay freight (Tax on 25%, Abatement 75% & Will be payed by receiver)

2)Legal Services provided by Individual Advocates (100% by service receiver)

[Prasoon]

Hi,

   For GTA, with-holding tax procedure will be the best option. Please refer the note: 1242881 - Service tax posting in invoices from Goods transport agency Please check the attachment in the note.

Regards,

AKPT

[Former Member]

hi AKPT, same is the case for Arbitrator Services (tax to be paid 100% by service receiver) , Legal Services provided by Individual Advocates (100% by service receiver) & Renting of Motor Vehicles (tax on 40%, Abatement 60%)to be paid by receiver, so in all these cases i need to go with withholding tax.

And in case where the responsibility to pay tax is on both provider & receiver in % , should i have to create the withholding tax codes?

[Prasoon]

Hi,

   No. In that case, you may go for service tax split. The service tax abatement process can be used in this case, as explained in the note: 1736781 - Service tax Legal changes for Abatements and Negative list

Regards,

AKPT

[Former Member]

ok , it means that, the case in which only receiver has to pay the service tax , i need to create withholding tax codes, & the case in which there is split i can use configure the tax codes accordingly with the %. 

[Prasoon]

Hi,

   As of my knowledge, YES!.

Regards,

AKPT

[sudeep_a]

Hi,

In case of services where there is no service tax liability on the service provider, you may go for withholding tax (Eg. Legal service, GTA). In case both service provider and receiver are liable, you may go for additional conditions in TAXINN procedure. (Eg. Works contract, supply of man power etc).

Regards,

Sudeep.

[Former Member]

hi sudeep, i have done in the same way as you told, but i am not getting the accounting entries of witholding tax in simulation of invoice in MIRO