Service Tax Process

After creation of tax code under service tax, next, we’ll see what is the process of the service tax. Here, we’ll use the tax code KJ as we have used that tax code in our previous example.

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So here we have used the tax code as KJ, and this is the general ledger view for that particular document number. So here in this, we’ll go to the general ledger view icon and we’ll click on general ledger view and we’ll get this particular screen having tax code as KJ. Now here this is the data entry view for that particular document number with same tax code as KJ.

Now one thing you should note that while entering the invoice gross amount, that is including the service tax, initially, the service tax amount is posted in the interim account. That is the service tax to be claimed. Interim is the initial account. And only after the payment to the vendor is made, it can be transferred to the final service tax mode by account. So here, once we enter the service tax amount in the Interim account, the first part, which is there is it will go to the Interim account, and only after the payment is made to the vendor, it is transferred to the final service tax account. So here, we’ll have to check the payment. That is, a payment is made before the service tax credit is taken and adjusted with the excise. Now here, in order to make the payment against the invoice, we’ll use a transaction code F53 and F58.

So here we have used that transaction code, and we have gone to the general ledger view for that particular document. Now here we are going to make a payment against this particular invoice. So we’ll select the line item, and then we’ll transfer the service tax amount to the final service tax amount. So here, either we can go via a general ledger view by clicking on this, or we can go via a data entry view.

Now so for transferring the service tax from the interim account to the final account, they’ll go via SE38, or we can provide the table RFUMSV50. So this is the table name for transferring the service tax. Now here we have gone via the transaction code called ZST01. Now here, this is tax transfer screen.

Now here, we’ll have to provide the vendor name in the further selection screen, and we have to provide the company code. Now here, by default, the screen will show Do not update radio button. So we have to change the radio button, that is the type of run radio button to update documents update run. So after providing these details, we’ll click on the execute button. And then we’ll get a next screen where we have to provide the posting parameters.

Now here we’ll have to click the transfer posting. That is, we’ll transfer from Interim account to the final service tax account. Then we have to provide a batch input session name, then document type, and posting date in the document date. After that, we’ll select the currency translation as transfer posting date. Then if required, we’ll select the type of the ALV list, so output with ALV. Now after this, in the posting parameters, transfer posting, and we’ll provide the session name and the document name. And then we’ll select the radio button as transfer posting date, after which we’ll click on the execute button. And once we click on the execute button, we’ll get a screen where it will give the details of the advance return for tax on the sales or the purchase for deferred tax.

So here we’ll have the details for the company code, the tax, year, then the month, then posting date, document number, and the transaction, the way or the mode via which the payment is done. Then here we’ll have the batch input session created name. That is the name which we have provided. So this is our details which we’ll get after the tax transfer to the final tax service tax account. Now here, the system will provide a warning screen. Now after that, once we click on this enter button or the execute button, we’ll get a screen where we’ll have to choose the option. Here it is a warning message that full payment not selected or do you want to adjust the customer data. So this warning message will be generated once we do the transfer of data.

So here we’ll just ignore this warning message and press enter. So after that, we’ll get a screen where the SP batch has started, that is the batch input session has started. So to view that batch input session, which is done in the background, we’ll go to transaction code called SM35. Now our batch input session name is this KIRTI. So here for viewing this, we’ll click on this particular session name.

Now after that, once we click on the session name and we’ll click on the process button, we’ll get a screen where we’ll have to choose the mode for that processing.

So here we’ll choose the mode as foreground mode, and we’ll click on this process button. So once we click on this process button, we’ll go to the document posting header screen.

So here we’ll have to provide the line items and the other details for that particular document. Now after that, we’ll get the screen for adding the GL account items, that is a line item details.

So here we’ll mention the amount details, the tax code, that is KK in our case since we are moving the tax from interim account to the final account, that is transfer posting for target tax account. Then we’ll have to provide the next line item details, if any. And then after that we’ll press enter. Now we’ll keep on pressing enter till all the entries are posted, and the system comes to the main screen, that is click on the simulate button to check the overview of those entries, and then we’ll click on the save button. After which, we’ll get a message that is stating that the entries have been posted to that company code. So this is how we maintain the service tax process and transfer the amount, that is a service tax amount from the interim account to the final account. So here we have seen about service tax and the service tax process based on the tax code. So here we have used the tax code as KJ and KK, KJ for the interim account and KK for the final service tax account. And also we have seen how the batch input session gets created and the transfer of the tax account.