Service Tax when advance payment made

hungryandfool

Dear Experts,

I have a scenario where the user is doing advance payment for the GTA vendor and then raising a purchase invoice later. While raising the invoice he applies the payment to it.
But, after applying the payment also the service tax amount is shown in the Service Tax Payable Interim account rather than Service Tax Payable account.

Please advice.

manisharma31

Have you selected structure on the invoice.

hungryandfool

Dear Experts,

Please provide me some help.
I provide some example to clarify the issue.
Say my GTA vendor has raised me a bill of Rs. 1000/- on which there is a service tax is of Rs. 31 extra.
Now when I input this bill in NAV the following accounts are affected:-

SUNDRY CREDITORS : Rs 1,000.00 Cr.
PURCHASE A/C : Rs 1,000.00 Dr.
SERVICE TAX PAYABLE(INTERIM) : Rs. 31.00 Cr.
SERVICE TAX RECEIV.(INTERIM) : Rs. 31.00 Dr.

Now when I make a payment of Rs. 1000.00 to the vendor by applying the above mentined posted invoice the service tax amount of Rs. 31.00 gets debited to SERVICE TAX PAYABLE(INTERIM) account and the same amount gets debited to SERVICE TAX PAYABLE account.
Now when I make the payment of the service tax mentioned then the SERVICE TAX RECEIV.(INTERIM) account gets credited by a sum of Rs. 31.00 and SERVICE TAX RECEIV. account gets debited by the same amount.
The above process is perfectly fine.

The issue arises when I have already made an advance payment for the service to my GTA vendor. Now after I have raised the purchase invoice in NAV when I manually apply the advance payment to the GTA purchase invoice the SERVICE TAX RECEIV.(INTERIM) acount gets credited and SERVICE TAX RECEIV. account gets debited by the sum of Rs. 31.00. But the SERVICE TAX PAYABLE(INTERIM) or the SERVICE TAX PAYABLE account remains unaffected.
So due to this I get the service tax credit but my SERVICE TAX PAYABLE account doesn't show me the amount that I have for the payment of the service tax.

Please help me out with the issue. I am really stuck. [-o<

Chinmoy

I was able to do the desired posting, however I may not be able to tell you all the steps here. What I can tell you though is that in the Payment entry record in Vendor Ledger Entry table, the following fields should have these values:

1. Document Type = Payment
2. Serv. Tax on Advance Payment = Yes
3. Input Service Distribution = Yes

Also, in Service Tax Setup table you should put the Service Tax Payable Account in S. T. Receivable Account (Dist).

Chn