Tax code for service tax in shipment Cost document

[Former Member]

Hi,

Can someone pls. tell me that do we need to create Tax Codes for Service tax, edu Cess and secondary & higher edu cess for Shipment cost doc?

If yes pls. explain the config in detail.

Regards

Abhilash

[Lakshmipathi · Accepted solution]

Dear Abhilash

Tax codes can be classified into two types, viz. Output Tax and Input Tax.

Output tax can be assigned to all sales related activities whereas, input tax can be assigned to all MM related activities.

To maintain these tax codes, go to <b>FTXP</b> and maintain tax codes for the combination of country and tax code.

Thanks

G. Lakshmipathi

[Former Member · Accepted solution]

Dear Lakshmipathi,

Thanks for the response.

My problem is that when we create shipment cost document, we have to pay the freight ammount with service tax components to the transporter who is a vendor.

So will the tax code for service tax be Input tax or output? and will there be three tax codes for service tax, edu cess and S n H edu cess respectively or just one.

Regards

Abhilash

[Lakshmipathi · Accepted solution]

Dear Abhilash

Assuming that the shipment cost is for outward movement, it should be treated as output tax. If the shipment cost for inward movement, then it should be treated as input tax. You have to define this as follows:-

Service Tax @ 12%

ECess 2% on 12%

HCess 1% on 12%

Thanks

G. Lakshmipathi

[Former Member]

hi,

in case u are seeking the services on which u the supplier charges u then its input tax for u. like in the example u mentioned below, if the transporter is chrgng u the service tax and other levies than it will be input tax. but as much as i understand the clearing of freight and other taxes is done thru miro wen the transporter produces the bill. u can include this tax component as part of ur sales pricing pricing procedure and charge the customer for this.

saurabh

[Former Member]

How would you maintain this condition? As a condition in the Shipment Cost PO OR as a conditon type in the shipment cost document?

Key is that it gets transferred to the service entry sheet, with correct tax code.