Calculation Problem in Service tax Payment

AKHIL
AKHIL Member Posts: 22
edited 2009-06-16 in NAV/Navision Classic Client
Hi Experts,

I faced a problem at the time of Vendor payment(Service tax) like below.

I posted One Purchase Invioce include TDS & Service tax.( Include Tds Base calucation check mark is there in Structure Card).

Advertisement amount is 25,000

In Purchase Invioce Statistics is below

TDS amount - 568.05
Service tax amount -2,575
Total amount is - 27,007.

Posted Entries are

Vendor A/C...........-27,007.00 Cr
TDS A/C...............-568.05 Cr

Service tax Intriem A/C......2,575.00 Dr
Advertisement A/C..........25,000.00 Dr
Rounding A/C................0.05 Dr

But at the time of payment aganist this Invioce(Applied total Invioce)

Posted Entries are like.

Bank A/C .........................-27,007.00 Cr
Service tax Intriem A/C........-2,521.96 Cr
Service Tax Credit Receivable..2,521.96Dr
Vendor A/C.........................27,007.00Dr

The Problem is
Service tax Intriem A/C......2,575.00 Dr (At the time of Invioce Posted Entry)
Service tax Intriem A/C........-2,521.96 Cr (At the time of Payment Entry

The differance amount between two entries is 54 Rs.
Suggest me how to slove this problem.
Regards,
Akhil.

Comments

  • ssingla
    ssingla Member Posts: 2,973
    This is a problem I have noticed several times and not been able to find the root cause. :oops:
    The diffrence comes due to the TDS amount.
    CA Sandeep Singla
    http://ssdynamics.co.in
  • AKHIL
    AKHIL Member Posts: 22
    hi ,
    but 4.0 sp3 it is working perfectly,in 5.0 sp1 we get a difference amount.




    regards
    akhil
  • highwaystar
    highwaystar Member Posts: 22
    Hi All,

    The reason for the difference in the service tax amount is becuase of the calculation, i.e. at the time of invoice, the service tax is being calculated on the invoice amount and then TDS is deducted, whereas during the payment, the TDS is deducted first and then service tax is calculated.

    As per the Indian Statutory requirement, the payment calculation is correct but unforunately all the companies follow the invoice calculation, which according to me is incorrect.

    Calculation for your reference purpose:

    Invoice
    Invoice Amount - 25,000
    Service Tax (10.3%) -2575
    TDS (2.06%) on 27,575 - 568.05
    Total Amount - 27007

    Payment
    Invoice AMount - 25,000
    TDS (2.06%) on 25,000 - 515
    Service Tax on 24485 - 2521.96

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