Posting for Sales Tax Clearing Account

[Former Member]

Hi Gurus,

I'm a newcomer here, please help me with the following:

Question: Is it normal to have a clearing account for sales tax at the time of GR?

In normal GR entry for a goods price of 10,000.00 Rps, is it normal to have some posting like the below journal? If so, how?

<b>Goods receipt</b>

Dr: Material account (10,349,440.00 Rps)

Cr: GR/IR A/C (10,000,000.00 Rps)

Cr: ST Clearing A/C (349,440.00 Rps)

-> The Sales tax clearing is calculated for 3%.

<b>Excise Invoice Verification</b>

Dr: Cenvat A/C (1,600,000.00 Rps)

Dr: Ed. Cess on Cenvat A/C (32,000.00 Rps)

Dr: HIgher Ed. Cess on Cenvat A/C (16,000.00 Rps)

Cr: Cenvat Clearing A/C (1,648,000.00 Rps)

<b>Invoice Verification</b>

Dr: GR/IR A/C (10,000,000.00 Rps)

Dr: ST Clearing A/C (349,440.00 Rps)

Dr: Cenvat Clearing A/C (1,648,000.00 Rps)

Is it normal to have a posting like the above journal?

It seems like the system does not allow the posting of a tax clearing account during MIGO, it gets posted inside the GR/IR.

In the end, I want to use sales tax clearing account in GR and separate the figure from the GR/IR. I think I have done the necessary configuration in the tax processing and calculation procedure, but it's not working as expected.

Please give me a hand on this.

Regards.

Is there anyone who knows about this?

Message was edited by:

Fu Ryu

[Former Member]

Anybody know about this?

If yes, how can you set it up?

[Former Member]

Hi,

I think you are missing a very important point. You are crediting the sales tax clearing account at time of GR and debiting it in IR which doesn't make any sense. Why are you doing that. Entries should be something like this:

At GR: Normal entry:

Material

To GRIR

and at IR

GR IR

Sales tax clearing

To Vendor

Now this sales tax clearing account can be utilised for tax credit.

Is there anything I am missing?

[Former Member]

Hi Manyak,

Appreciate your comment.

That was exactly why I have posted this question: Is it normal to have a clearing account for sales tax at the time of GR?

My customer in West Bengal had asked me to have this kind of posting, but I was not sure the usage of the clearing account.

At a glance it did seem pointless to me, but then why is it that the CENVAT account has similar type of posting, where the CENVAT clearing is posted in credit side during excise invoice verification, and knocked off in the debit at logistics invoice verification? Isn't that standard operation? Why does a tax like CENVAT have that kind of posting?

Is there anything I'm misunderstanding?

Thanks.