Service Tax and VAT / CST on the same line item

[Former Member]

Hello Gurus,

My client has a requirement wherein they want that for serviceable materials the system should calculate VAT @ 5% and also Service Tax @ 12.36%..

I have created separate condition types for VAT / CST and the Service Tax... also I have assigned Access Sequence for the VAT and CST but I am not sure how to go about doing this for Service Tax.

Could I Pl. know how to go about configuring both for a single line item?

Regards,

Sunny

[binoy_vargis1]

As per my knowledge, Its not possible to have multiple Taxcodes for a single line item.

But its possible to have a single Taxcode which has got both Service Tax 12.36% and VAT/CST 5%.

Normally the complexity comes when the Base value for calculating Service Tax (Service Base Amount) is different and Base value for calculating VAT/CST(Material Base value) is different.

Normally it is dealt with making two different line items.

Regards

Binoy

[Former Member]

Hi Sunny,

This kind of scenario is quite common in industrial machinery, stampings & assemblies manufacturing industries. Normally customers  will send there materials which are taken in as non-valuated materials for this business will do processing (some operations & they will add some nut, bolts etc..). For processing charges they will charge service tax & for this nut bolts they will charge VAT/CST.

As these nut, bolts are consumed with in the production order stock will not be available & processed customer material will be available where they have to deliver this with service tax invoice(Job work invoice with service tax & VAT/CST).

In such senarios have one separate pricing procedure whcih consists of both SERVICE tax & VAT/CST condition types(configure as per the business requirement). Delivery related billing.

Hope it's clear now.

Regards,

S.Himavanth.

[former_member183879]

Hi Sunny,

Piwai already points out the business situation where both VAT and CST are applicable.

I worked in a business involving both material part and service part. There is also a fixed portion of the total value considered as material part and the rest as service part.

For example, if the selling price is 100, then material part is 75 and service part is 25. This is enabled by having 2 statistical condition types which are % condition types having the main basic price condition type having value as 100 as the base value. On this base price, the material part condition type will have a condition record of 75% and the service part condition type will have 25% in condition record. Hence these condition types will have value of 75 and 25 respectively.

Once this is done, VAT can be based on the 75 and CST on the 25 base values. The percentage of these taxes can be maintained in condition record with relevant tax codes. If this is done, your pricing model will work fine.

[Former Member]

Thanks for giving all the details information about the scenerio

The above scenrio is logical when we charge total value as 100

75 @ CST/VAT and 25 @ Service tax

i am not agreeing on material with VAT and CST applicable on Same material

Tax Point of you only one tax will be applicable on Product CST or VAT

Service tax

[Lakshmipathi]

Do you mean to say system should cumulate VAT / CST and Service Tax as one line item and post in FI ?  Since you should be having different G/L Account for VAT / CST and for Service Tax,  it is not possible.  May be you need to discuss this with your FI consultant

G. Lakshmipathi

[Former Member]

Probably sunny was trying to say that ,company sell the product to end customer with Material +Service (Installation ) so in the sale order should appear like this

In sale order

10 : XYZ Material ---PR00 (100) and CST 2 %

20 : Service              PR00   50 and Service tax 12.36%

So my total value will in be single invoice like 102 + 56.18 =158.18

And accounting Document will create for respective G/L

Service tax never calculate on Material its Purely servcie

[Former Member]

Hello Lakshmipathi,

My apologies for this late response.. This is due to certain personal reasons...

The requirement was on a single line item is it possible to calculate both VAT / CST and Service Tax.. They will post separate to Accounting.

But will one line item on a order be able to have 2 different Tax Codes..

Hope to receive your inputs as always..

Thanks

Sunny