Transaction Code | Action |
J1INC | Post withholding tax on invoices |
J1I8 | Enter remittance challans |
J1ICCERT | Print withholding tax certificates for vendors |
J1ICOTV | Print withholding tax certificates for onetime vendors |
J1ICREP | Reprint withholding tax certificates |
J1ICREP | Cancel withholding tax certificates |
J1INEFILE | Prepare TDS returns |
J1IHBK | Copy bank IDs from invoice to TDS document |
J2ID | Archive TDS documents |
J2IE | Display archived TDS documents |
Use
You use this report to find out where you have archived a tax deducted at source (TDS) document.
Features
Selection
On the selection screen, you specify which TDS documents you want to view. You can make your selection by vendor, business area, and TDS certificate number.
Activities
To access the report, from the SAP Easy Access screen, choose Accounting ® Financial Accounting ® Accounts Payable ® Withholding Tax ® India ® Withholding Tax ® Utilities ® View Archived Documents.
Use
You use this program to cancel TDS certificates.
To access the program, from the SAP Easy Access screen, choose Accounting ® Financial Accounting ® Accounts Payable ® Withholding Tax ® India ® Withholding Tax ® Certificates ® Cancel.
Features
Selection
Enter data as required, including the number of the certificate that you want to cancel.
Output
The system marks the certificate as canceled. It does not delete it from the database.
Use
You use this program to reprint TDS certificates.
To access the program, from the SAP Easy Access screen, choose Accounting ® Financial Accounting ® Accounts Payable ® Withholding Tax ® India ® Withholding Tax ® Certificates ® Reprint.
Features
Selection
On the selection screen, enter the numbers of the certificates that you want to reprint and the details of the signatory.
Output
The system prints the certificates. Each certificate is marked as a duplicate.
Use
You use this program to print TDS certificates for your vendors (individually or in batches). It covers the TDS in all the invoices and down payments that you have posted over a specified period.
To access the program, from the SAP Easy Access screen, choose Accounting ® Financial Accounting ® Accounts Payable ® Withholding Tax ® India ® Withholding Tax ® Certificates ® Print ® Vendors.
There is a separate print program for one-time vendors, which you can access from the SAP Easy Access screen, by choosing Accounting ® Financial Accounting ® Accounts Payable ® Withholding Tax ® India ® Withholding Tax ® Certificates ® Print ® One-Time Vendors.
Prerequisites
You have already remitted the TDS to the government and recorded the challan number in the transactions concerned (see Update of Challans). Only transactions with a challan number can be included in certificates.
The certificate printing program uses SAPscript form J_1ITDSCERT. If there are some changes in the certificate format this layout set can be changed accordingly.
If the certificates are to be divided by business area, with a unique number range per business area, you must have maintained the sections as a combination of section and business area, so for business area 0001 and section 194C, you could maintain the section as 194C0001, for example.
Features
Selection
Enter data as required, including:
If you enter the business area in combination with the section, it must also be used in all other transactions involving this certificate, including annual returns.
Output
If you select the preview option, the system displays a certificate without any certificate number. The number will be assigned only when the certificate is actually printed directly (not from the print preview).
A summary of all the certificates is printed at the end, summarized by certificate and challan number.
Use
When you have remitted the deducted TDS to the government, you are sent a bank challan confirming that payment has been received. The system allows you to record the number of the challan in the invoices from which the TDS had been deducted and paid.
You can also use this function to change the challan number or date later on, if necessary.
Features
To access this report, from the SAP Easy Access screen, choose Accounting ® Financial Accounting ® Accounts Payable ® Withholding Tax ® India ® Withholding Tax ® Enter Remittance Challans.
Selection
The system displays the transactions on which you have withheld TDS. You select the transactions for which you have remitted the TDS, enter the challan details. The system then records the challan number in each of the transactions.
If you need to change a challan number or date, enter the challan number and date that is to be changed.
The actual TDS amount and the surcharge on this TDS amount are shown separately.
To handle cases where the company needs to have many TAN numbers, you can enter the TAN number when you update the challan number. This number will be used subsequently for the certificates.
Use
If you reverse an invoice or down payment that you have already calculated TDS on, you also have to reverse the TDS postings.
Procedure
When you reverse a down payment in the standard, the system automatically reverses the TDS posting. When you reverse an invoice, the system reverses the TDS posting the next time you run the TDS report in update mode.
Use
If you have withheld TDS on an invoice but not yet remitted it to the government, and the invoice needs to be cleared against a down payment, you have to adjust the tax amount accordingly.
Prerequisites
You have posted the invoice and the TDS document has been created.
Procedure
Use
This procedure shows you what happens if you post a credit memo against a vendor invoice. If you have already remitted the TDS from the invoice, the credit memo against that invoice is not considered at all for processing. Otherwise, the system calculates TDS for the amount stated on the credit memo and debits it from the TDS payable account.
Procedure
The system displays a message, telling you to run the program in update mode.
The system makes the appropriate posting and displays the number of the credit memo along with the TDS posting document.
Use
You use this program to calculate withholding tax on vendor invoices.
It you have already posted a down payment for an invoice and withheld tax on it, the system automatically takes the tax already paid into account.
To access the program, from the SAP Easy Access screen, choose Accounting ® Financial Accounting ® Accounts Payable ® Withholding Tax ® India ® Withholding Tax ® Tax Deduction at Source: Classic.
Prerequisites
You have already entered the invoices and the down payments.
Features
Selection
On the selection screen, enter the following data:
We recommend that you first run the program in test mode, then once you are satisfied with the results, in update mode.
Select this if you want to post TDS for a specific invoice. It speeds up the response time.
This is the posting date that the system enters in the TDS document (update mode only).
Output
The system displays a list of invoices and specifies whether there are any down payments to be cleared against them.
Activities
In the output list, you can clear an invoice against a down payment as follows:
.The system:
You can also clear invoices against down payments by first taking a list of all the invoices listed above by choosing 
By clicking on the document numbers, you can display the document of the TDS posting.
You will have to make a manual FI posting to transfer the amounts from the respective withholding tax accounts (as defined in the withholding tax line items) to the TDS government payable vendor account. To make the payment to the TDS government payable vendor account, from the SAP Easy Access screen, choose Accounting ® Financial Accounting ® Accounts Payable ® Document Entry ® Outgoing Payment ® Post.
Definition
A system object that you use to classify payment recipients as legal persons or natural persons, for the purposes of withholding tax reporting.
Use
Customizing
Define the recipient types in Customizing for Financial Accounting (FI), by choosing Financial Accounting Global Settings ® Withholding Tax ® Withholding Tax ® Basic Settings ® Maintain Types of Recipient.
Create two entries as follows:
| Recipient type | Text |
| CO | Companies |
| OT | Others |
Master Data
When you enter the withholding tax types and codes in the vendor master, enter CO or OT in the Recipient Type field, depending on whether the vendor is a legal person or a natural person.
Reporting
The annual returns separate the information about taxes withheld on legal persons and on natural persons.
Under the terms of the Income Tax Act, you are required to calculate withholding tax (tax deducted at source, or TDS) when you post a vendor invoice. The system calculates withholding tax at the time of payment. To handle this difference in the calculation of the tax and to incorporate additional requirements, such as withholding tax certificate printing and annual returns, additional functions are provided.
The withholding tax for an invoice or a down payment is calculated at header level. That is, only one withholding tax code can be used for a down payment or invoice. This implies that an invoice cannot contain items with different withholding tax rates. It can, however, contain one or more items with the same withholding tax rate and one or more items with no withholding tax. This can be handled by specifying the base amount on which withholding tax is to be calculated. On account of calculation at header level, companies have to instruct their suppliers not to include items with different withholding tax rates in a single invoice, but issue separate invoices for different tax rates.
The system also allows you to print TDS certificates for vendors, and to reprint or cancel them if necessary. In addition, you can also prepare TDS returns.
Country Version India comes ready configured with all the settings you need to track and remit withholding taxes under the following sections of the Income Tax Act, 1961:
· Payments to contractors and subcontractors (Section 194 C)
· Insurance commission (Section 194 D)
· Rent (Section 194 I)
· Fees for professional or technical services (Section 194 J)
· Interest other than interest on securities (Section 194 A) (only supported in the Extended Withholding Tax solution)
Country Version India offers you two solutions for handling withholding tax (also known as tax deducted at source or TDS). You can either use the Classic Withholding Tax solution or the Extended Withholding Tax solution.
If you are installing the SAP system for the first time, we recommend that you use the Extended Withholding Tax solution. Before you decide one way or the other, however, you must give careful consideration as to whether Extended Withholding Tax covers your requirements. If you start working with this solution and it transpires that it does not cover your needs, SAP does not offer a strategy for migrating to Withholding Tax.
Taxes withheld under each section are treated differently with regard to the time limits for remitting tax to the authorities, providing the taxpayer with a withholding tax certificate, and filing an annual return. In addition, the formats for the withholding tax certificates and the returns also differ.
The Income Tax Act requires you to calculate taxes as soon as you enter an invoice. However, if you make a down payment to a vendor before you have received an invoice from it, you withhold tax on the down payment. Then, once the invoice arrives, you clear the down payment against it.
When you prepare your annual returns, the act also requires you to make provisions for taxes on services received but not yet invoiced.
Country Version India complements the generic Classic Withholding Tax and Extended Withholding Tax solutions with additional functions that meet the needs of the Income Tax Act. These functions allow you to:
· Ensure that you remit taxes within the due date
· Track and report withholding tax surcharges separately
· Adjust withholding taxes when you clear a down payment against an invoice
· Prepare withholding tax certificates and annual returns
· Calculate withholding tax on provisions
This is a tax levied on the sale of a product. It is applied on the gross price of goods, inclusive of excise duty.
In addition to the standard Implementation Guide (IMG) settings for taxes on sales and purchases, you must also have maintained the tax registration numbers of your vendors, customers, and your own plants.
Furthermore, if the state legislation allows you to offset input local sales tax (LST) against output LST, you must also have defined this (see Material Master (Excise Data)).
There are two types of sales tax. Interstate sales (for example, between Karnataka and Tamil Nadu) are subject to central sales tax (CST). The tax rate is the same throughout the country. Intrastate sales, on the other hand, are subject to local sales tax (LST), which differ from state to state. The system handles these using tax jurisdiction codes.
A percentage of input LST can be deducted against output LST, depending on what percentage of goods you have purchased in the state in question.
The system calculates the sales taxes automatically, when you enter the tax codes. A report is also available that tells you how much sales tax you have paid and collected.
This is a tax that is levied on the services rendered. It is applied on the total price of the service.
In addition to the standard Implementation Guide (IMG) settings for taxes on service tax, you must also have maintained the tax registration numbers of your vendors, customers and your own plants.
If there are multiple tax registration numbers, you should have separate account postings to different General Ledger Accounts based on service registration number. You can do this provided you have maintained a separate tax code for each service registration number. To do this, for every service registration number, you should define separate General Ledger Accounts for service tax and education cess on service tax.
Service tax has the following features:
· It is charged at 12% on the price of the service rendered.
· An education cess of 2% is applicable on the service tax.
· This is a deferred tax. Only the amount of service tax that is actually received (credits) by the customer can be offset against the tax payable.
The interim General Ledger Account contains the total service tax that you have to receive. The final General Ledger Account contains only the actual amount that you have received. You can take credit for only the amount in the final General Ledger Account.
· Service tax can be used to set off excise duty paid by you. Additional duty of customs cannot be used to set off the service tax paid by you.
· This tax is payable to the Central Government.
The price of the service is INR 10,000.
Service tax that is applicable is INR 1,200.
Education cess is INR 24.
Total amount to be received by you is INR 11,224. The system updates the interim General Ledger Account with this amount.
Now, assume that the customer makes a part payment, out of which INR 500 is against service tax. You have to manually update the final General Ledger Account with this amount.
You can offset only INR 500 against the payables in that month.
Official Document Numbering is used to to print the numbers serially and separately for Bill of Sale (BOS), Value Added Tax (VAT) invoice, credit and debit notes.
To configure the Official Document Numbering for India, execute the following activities in the IMG under Cross-Application Components ® General Application Functions ® Cross-Application Document Numbering ® Taiwan.
...
1. Define Business Places for different plants.
2. Assign Business Place to Sales Office.
3. Maintain different document classes to generate different number ranges, for example, B for Bill of Sale, V for VAT Invoice.
4. Assign the document class for the VAT and BOS to the Document Type.
5. Maintain the Number Group.
6. Maintain the Number Ranges for the Number Group.
7. Assign the Number Range to a combination of Business place, Document Class and Number Group.
In India, VAT has been levied in certain states from April 1, 2005. VAT is levied instead of the Local Sales Tax (LST). VAT also replaces other taxes such as, turnover tax, surcharge, additional surcharge.
You can configure the following tax procedures:
· For Condition-Based Excise Determination, configure the tax procedure TAXINN. For more information about TAXINN, see Configuration of Tax Calculation Procedure TAXINN.
· For Formula-Based Excise Determination, configure the tax procedure TAXINJ. For more information about TAXINJ, see Configuration of Tax Calculation Procedure TAXINJ.
The essence of VAT is that you can set off the input tax against the tax paid earlier. VAT is based on the value addition to the goods, and your VAT liability is calculated by deducting input tax credit from tax collected on sales during the payment period (say, a month).
You have purchased input worth INR 1,00,000 and your sales are worth INR 2,00,000 in a month, and input tax rate and output tax rate are 4% and 10% respectively, then input tax credit/set-off and calculation of VAT will be as follows:
● Input purchased within the month = INR 1,00,000
● Output sold in the month = INR 2,00,000
● Input tax paid = INR 4,000
● Output tax payable = INR 20,000
● VAT payable during the month after set-off/input tax credit = INR (20,000 – 4,000) = INR 16,000
The excise invoice that you capture contains one of the following:
● VAT Number – If your buyer belongs to a state where VAT is levied, VAT Number has to be printed on the excise invoice.
● Bill of Sale Number - If your buyer belongs to a state where VAT is not levied, Bill of Sales Number has to be printed on the excise invoice.
During billing, the system generates the VAT number if the VAT Registration number is maintained in customer master in the Tax Code 2 field. Else, the system generates a Bill of Sale number.
These numbers have to printed serially and separately for Bill of Sale, VAT invoice, credit and debit notes. You can do this using the Official Document Numbering.
You use this report to calculate how much excise duty you must remit to the authorities. Legislation requires you to remit excise duty twice monthly: for all the goods issues in the first half of any given month (1–15 inclusive) and from 16 to month-end. In each case, you are allowed five days to remit the excise duty.
Once the report has determined how much you have to pay, it allows you to specify where the money should be paid from – whether it should be deducted from the CENVAT credits that you have accumulated, or whether it should be deducted from the personal ledger account (PLA).
Irrespective of which date you execute the report on, you can only utilize CENVAT credits posted up until the 15th or the last day of the month as the case may be.
You have:
· Customized the system so that when you create an excise invoice for a sale, the system automatically debits the excise to a CENVAT clearing account
· Made the settings in Customizing for Logistics – General, by choosing Taxes on Goods Movements ® India ® Business Transactions ® Utilization
To access the report, on the SAP Easy Access screen, choose Indirect Taxes ® Sales/Outbound Movements ® Fortnightly Payment.
On the selection screen, enter data as required:
· Organizational data (in the General data group box)
· Posting date for the CENVAT payment, if it is different from the run date
· The period to be covered by the report (for example, 1–15 January)
If, for any reason, you want to select an excise invoice individually, you can do so. Any entry in the Period field will be disregarded.
To display a list of all the excise invoices whose excise duty you have not yet remitted, choose Display pend. invoices.
To display a list of only the excise invoices for a given period, enter the period in the Period fields, select Select pending inv. for period, and choose Display pend. invoices. You can also print the list of pending invoices.
To display the last date when tax was remitted, choose Display last util. date (Display last utilization date).
For each sort of excise duty, the system shows you:
· How much you have to remit (Amounts payable group box)
· How much credit you have at your disposal on the appropriate CENVAT account (Available balances)
This figure is equal to the credits on the CENVAT account less the minimum balance.
· How much credit you have on the CENVAT accounts (G/L account balances)
You now have to specify which accounts can be used to utilize the duty amount. In the Balance Utilization group box, the system proposes how much money should be taken from which accounts. You can overwrite these fields if you want, and choose 
For a list of excise invoices that are considered for the CENVAT payment, choose Display excise invoices. You can print the list and use it as an annexure.
When you have finished, save your entries. The system then:
· Creates an accounting document that:
¡ Credits the CENVAT clearing account to remove the excise duty owed
¡ Debits the accounts from which the excise duty is to be paid
· Updates the Updates the Part II register
Use
In some industries, businesses are only allowed to set off a portion of their input excise duty against output duty. In this case, the remainder of the duty is added to the material value.
Activities
Customizing
If any of your excise registrations are only entitled to claim partial CENVAT credit, set the indicator in Customizing for Logistics – General, by choosing Taxes on Goods Movements ® India ® Basic Settings ® Maintain Excise Registrations.
Configure separate tax codes that split the excise and post some as tax and add the rest to the material price.
Day-to-Day Activities
The portion of the excise duty that is added to the material value is displayed in the excise invoice, along with the CENVAT credit. This amount is added to the inventory value when you post the goods receipt.
The SAP system automatically calculates excise duties in Materials Management (MM) and in Sales and Distribution (SD), and posts them in Financial Accounting (FI).
The system covers all types of excise duty, all of which need to be calculated and reported separately:
· Basic excise duty (BED)
· Special excise duty (SED)
· Additional excise duty (AED)
· National calamity contingency duty (NCCD)
· Cess
· Education cess
· Countervailing duty
· Additional duty of customs
The system of excise duties is complex, and differs from the generic functions for taxes on sales and purchases in a number of ways:
· The rate of duty on a single material can vary according to which chapter ID it is listed under.
· You cannot offset all excise duty on inputs against outputs.
Depots cannot offset any input duties at all. Manufacturing plants can only offset input duties if they can show that the input materials are used to produce output materials.
· You have to record all excise duty (inputs and outputs) in excise registers.
· Your company may only be entitled to offset a portion of the duty on inputs against duty on outputs.
· Companies that qualify as small-scale industries can levy excise duty on outputs at reduced rates, so if you purchase materials from these companies, you must calculate a different rate of excise duty.
MM comes with two ways of determining excise duties (and sales taxes) on input materials: formula-based excise determination and condition-based excise determination. The system calculates excise duties using a tax procedure.
SD also supports formula-based and condition-based excise determination, but in SD, the system calculates the taxes using a pricing procedure, not the tax procedure (see Pricing).
You have to remit the excise duty that you have collected to the central excise authorities. The law requires you to remit excise duty twice monthly: for the first half of any given month (1–15 inclusive) and from 16 to month-end. In each case, you are allowed five days to remit the excise duty. Country Version India offers a report to help you do just that (see Remittance of Excise Duty Fortnightly).
A small number of transactions have to be remitted on the same day (see Other Outward Movements).
In addition, the system allows you to prepare printouts of the various excise registers for the tax authorities.
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