VAT at state level and TDS at centralized level

[former_member221515]

Hello Experts,

I have VAT registration in 3 states. For this, I am planning to use Business Place in SAP. By using business place, I need not create VAT GL accounts at state level (one in HO and two in other states).

However, state-wise business place is giving problem in TDS. My TDS is booked in respective state but it is paid at central level in head office. Hence here I should select HO business place.

This is getting conflicted where my Vendor is have VAT and Service Tax on bill and I need to deduct TDS on service tax.

In such case, which business place I need to select. For Ex: Vendor is from Kerala State and my HO is in Maharashtra from where I paid TDS

Hence, for VAT purpose, I should select business place as Kerala. But for TDS purpose, I should be selecting business place as Maharashtra. However, I am getting problem, which business place to select.

Hence how to tackle this problem.

--

Deepak

[milind_joshi7]

HI Deepak,

According to you requirement wish to inform you Business Place is nothing but your location of Procurement of Services or Material hence when ever or where ever you are procuring the services or Material you can able to post in Business Plance or HO.

According to Vat or TDS payment and Booking.

Vat Payment as well as TDS payment will be made by HO and Booked at Business Place for reporting purpose in Financials.

Vat will be the State tax and TDs will be the Central tax hence when we are making payment we need to submit the challan of Vat in the respective state and TDS we can able to make payment centrally and pass the information to concern Business Place for Information.

Regards

Milind Joshi

[narasimhulu_konnipati]

Deepak,

For TDS, you can create a single Section code centrally and remit the TDS amount from there. Make sure you create a validation rule for Section code to make it as a mandatory field at transaction level.

You can follow the Extended WHT for configuration.

Business place is not needed for TDS.

Thanks

[former_member221515]

Hi Narasimhulu,

My issue is that, there is some scenarios where VAT and TDS is also applicable. For Example: I am paying centralized TDS at Bombay (Maharashtra). But my vendor is from Kerala. TDS and VAT is both applicable for that.

Now what business place and section code, I need to put.. Maharashtra or Kerala. Since one section code can be assigned to one business place, I cannot assign statewise and centralized section code to one business place.

Please help

[adwait_bachuwar]

Hi Deepak,

There is no scenario where VAT is applicable for other state purchase. If the state changes then its CST applicable and its also centralized. Please refer to the response from APKT.

For your requirement check it thoroughly with business and FI consultant. If required get tax expert involved.

Thanks and Regards,

Adwait Bachuwar

[ajitkumar]

if you want to use the same VAT tax code which are eligible for setoffs for different business place see table J_1IT030K_V in sm30

here the transaction is the transaction for the condition in obq3

[Former Member]

Hi Deepak,

TDS is deducted when you post invoice/payment based on the below configuration

Tax type and Tax codes assigned in Vendor master record.

Tax codes created in FTXP,If you want to deduct TDS on service tax only, then you should enable the formula based withholding tax in country for company code there we have option how TDS will be deduct or else if you want to deduct TDS only on Base amount or net amount then not required formula based withholding tax ,we can continue with normal withholding tax and there we can enable the check box's for Base and net amount..

so based on the above steps automatically TDS will be deducted on service tax for vendors assigned with tax codes.

I suggest you to touch with FI consultant for all the withholding tax configurations.

Regards

Sunil.

[Former Member]

Hi Deepak,

For TDS we need to create separate tax code and it should maintain in the vendor master. Please check with FI consultant.

it will not reflect in your purchase order, but at the time of invoice posting it will get calculated.

Regards,

Manikandan G

[Prasoon]

Hi,

   VAT will be applicable only if you are purchasing materials from a vendor located in your plant state. If you are purchasing from any other state, its CST...correct?

   You can have multiple tax codes with corresponding GL assigned in OB40, through which you can take the tax reports. No need of state wise business place, as of my knowledge.

Regards,

AKPT