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Service tax white_paper_ver_11[1]

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Service tax white_paper_ver_11[1]

  1. 1. WHITE PAPER Service Tax Functionality in Financials for IndiaPrepared byAuthor: Krishna Surapaneni –Financials for IndiaSupportCreation Date: 26-May-2008Last Updated:Control Number: 1Version: 1Copyright (C) 2008 Oracle CorporationAll Rights ReservedProduct Design and ArchitectureService tax functionality in Oracle financials for India White Paper Ver 1.0 1
  2. 2. Service tax functionality in Oracle financials for India White Paper Ver 1.0 2
  3. 3. SCOPEThis paper is intended for an audience familiar with Oracle Financials for India and seeking aninsight into how the new functionality of Service tax regime is built to cover the statutoryrequirement in India.This paper is functional in nature keeping in sight Oracle’s existing literature that has adequatedetails on the technical aspect of the Oracle Financials for India, though adequate insight is givento the table level details relevant to the topic. This is more so, in the light of the diagnostic scriptsavaialble in metalink note # 402711.1, thus making table level details easily accessible to theuser. Thus we have tried to handle the topic from the available functionality as well as the dataperspective level.To prevent this document from becoming too bulky, and also to maintain focus throughout thepaper, the scope of this paper is limited to the basic set up need for defining the Service taxregime, factors to be kept in mind while defining the Service tax regime, Transaction flow and thereports available. It is assumed that the audiences are aware of the basics of Financials for India,as only the behavior peculiar to Service tax regime is handled in the paper.This document is intended to be supplementary in nature and does not in any way, purport to bea substitute for any official literature being drafted or currently published.Service tax functionality in Oracle financials for India White Paper Ver 1.0 3
  4. 4. INTRODUCTIONTaxes in India are classified as Direct and Indirect taxes. Direct taxes are those taxes whoseimpact will be borne directly by persons. Income tax and Wealth tax are the examples of Directtaxes where levy and recovery will be from the persons directly. Indirect taxes are those taxeswhose burden can be passed on to the Buyers of goods and services. For example, Excise taxesare levied on the manufacturers, however, that taxes portion will be recovered from the buyer ofgoods as part of the price. Similarly Service tax is levied on the service provider whereas theservice provider passes on the burden to service receiver.Finance Act, 1994 introduced the levy of tax on Services rendered, hereafter referred as Servicetax in India. Initially service tax was imposed on 3 services and the scope is being widened everyyear. Service tax solution was developed by Oracle Financials for India to meet the statutoryrequirements in India. Hence features provided in the product are based on the provisions of theFinance act, as amended from time to time and the service tax credit rules framed by thestatutory authority.Service tax functionality in Oracle financials for India White Paper Ver 1.0 4
  5. 5. OVERVIEW Initially Service tax functionality has been provided in Oracle Financials for India through patch # 4239736. This was referred as Service tax by operating units patch as the fucntionality was delivered at operating unit level. Later on the functionality was enhanced to deliver the functionality of service tax distribution at inventory organization level and includes the feature of service type as well. This functionality has been delivered through patch # 6166691 and the same fixes have been included in Budget 2007 patches (6003048 or 6079248 or 6167056. It may be noted that the first two patches mentioned here are superceded by patch 6167056). Hence if patch # 6167056 is applied, then the latest Service tax functionality would be available, even though patch # 6166691 is not applied. Major features of Service tax functionality provided in the Oracle Financials for India are mentioned below: a) Defining Service tax regime and the registration details of the Organization. b) Definition of Service tax type codes, as applicable. c) Definition of rules for accouting for Service tax. d) Provision to default the Service type applicable for Suppliers/Customers. e) Provision to distribute the service tax credit available across inventory organizations. f) Facilitating the settlement of Service tax liability. g) Provision to maintain and view the Service tax repository. h) Reporting requirements with respect to Service tax. The above-mentioned functionalities are explained in detail in the relevant sections below. It may be noted that the functionalities mentioned in this note are available as of the date of publicaiton of this note and might change based on the amendments made in the relevant statutes.Service tax functionality in Oracle financials for India White Paper Ver 1.0 5
  6. 6. SETUP4.1 Regime RegistrationRegime would be used to define the registration details of the organization and rules that wouldbe applicable to all taxes assigned to it. Following figure depicts the regime structure: DEFINING SERVICE TAX REGIME Define Regimes Assign Registrations Assign Tax Types Orgnaizations Assign Assign Tax Organization Accounts AccountsOn a regime, you will be able to capture the registration details of the Organization and rules thatwould be applicable to the transactions created with service type of taxes. Information definedhere would be generic and would be applicable to all the organizations defined under this regimeunless changed at the Organization level.1.1.1.1 Service Tax RegistrationOrganizations have to register with the various Service Tax Authorities. The registration would bethe basis for recovering credit on input Tax, settling tax liability and Tax Reporting.Those registration details can be captured in the registrations tab as below:Service tax functionality in Oracle financials for India White Paper Ver 1.0 6
  7. 7. In the registrations tab, parameters relating to the Organization as a whole are defined such asRegistration number of the Organization, Jurisdiction under which the organization is falling etc.,Also one important parameter which will drive the accouting on the event of service tax creditdistribution is “Service tax distribution in PLA/RG”. Based on the register name specified here,Accounting and register updates will happen.1.1.1.2 Assigning Tax TypesService Tax Types have to be assigned to the Service Tax regime. This is a logical grouping of alltransactions to which these taxes are applicable. If the values assigned for a particular tax weredifferent, these would prevail over those defined for the regime.Service tax functionality in Oracle financials for India White Paper Ver 1.0 7
  8. 8. Under this tab, tax types applicable for this Service tax and account codes applicable can beassigned. Currently Education cess and Secondary higher education cess are also leviable onthe Service tax amount.Account codes that will be used for accounting of Service taxes need to be specified in the taxaccount details. As Service Tax is accounted on cash basis apart from final Recovery andLiability Accounts, interim accounts have to be defined that will store the Service Tax which hasnot been paid / received1.1.1.3 Assigning OrganizationsRegime has to be assigned to all organizations to which it is applicable. Taxes defined under thisregime would default only for these organizations.Service tax functionality in Oracle financials for India White Paper Ver 1.0 8
  9. 9. Under the Organization details, User will be able to assign the Inventory Organizations to whichthe service tax regime is applicable. Also if an inventory organization is having multiple locations,all those locations have to be assigned under this regime. Otherwise processing of Service taxeswill happen only for the assigned locations.Service tax functionality in Oracle financials for India White Paper Ver 1.0 9
  10. 10. Registration details, tax types assignment and the account values assignment can be assigned tothe Inventory organizations, if they are different from those assigned under the header level.Otherwise the values will get defaulted from the header. Default checkbox will be checkedwhenever default registration values at the regime level are retained. It gets unchecked whenregistration value is modified.4.2 Customer Additional InformationTo be able to make transactions in Order to Cash cycle, Customer additional information setupneed to be completed for those Customers from whom service tax amount will be recovered. InService tax functionality in Oracle financials for India White Paper Ver 1.0 10
  11. 11. this form, Service tax registration number and the Service tax type applicable for that particularCustomer needs to provided. If Service type is defined here, then it will be defaulted in thetransactions. Otherwise Users need to manually update the service type in the transactions.Service tax functionality in Oracle financials for India White Paper Ver 1.0 11
  12. 12. 4.3 Supplier Additional InformationTo be able to make transactions in Procure to pay cycle, Supplier additional information setupneed to be completed for those suppliers to whom service tax amount will be paid. In this form,Service tax registration number and the Service tax type applicable for that particular supplierneeds to provided. If Service type is defined here, then it will be defaulted in the transactions.Otherwise Users need to manually update the service type in the transactions.Service tax functionality in Oracle financials for India White Paper Ver 1.0 12
  13. 13. 4.4 Tax code definitionIn Tax code definition form, Service tax type codes can be defined and the same can be used inthe transactions. It has to be noted that Service tax codes have to be defined as recoverabletaxes by specifying the credit percentage as 100. Otherwise the accoutning will not happen asmentioned in this document and those taxes will be considered for costing in Procure to paycycle.Currently the following tax types are applicable for Service tax and the same have been providedas seeded values in the tax type field: a) Service tax b) Education cess on Service tax c) Secondary Higher education cess on Service tax.Service tax functionality in Oracle financials for India White Paper Ver 1.0 13
  14. 14. SIGNIFICANCE OF SERVICE TYPE5.1 What is ‘Service type’Service tax is payable on the taxable Services as defined in varoius clauses of section 65(105) ofthe Finance act 1994. Type of service is relevant for determining the amount chargeable for taxand also to meet the reporting requirements under the act. Hence to capture the type of Service,additional field ‘Service type’ has been provided in various forms. Currently the following servicetypes are chargeable to tax: 1 Actioneers Service 2 Advertising Agency Service 3 Air Travel Agent 4 Airport Services 5 Architects 6 Authorised Service Station 7 Automated Teller Machine Operations, Maintenance or management services 8 Bank & Financial Services 9 Beauty Parlour10 Broadcasting11 Business Auxiliary Services12 Business Exhibition Services13 Business Support Services14 C & F Agents15 Cable OperatorService tax functionality in Oracle financials for India White Paper Ver 1.0 14
  15. 15. 16 Cargo Handling17 Chartered Accountant (1-1500)18 Cleaning Services19 Club or Association services20 Commercial or Industrial construction services21 Commercial Training Coach22 Company Secretary23 Construction of Complex24 Consulting Engineer25 Convention Services26 Cost Accountant27 Courier28 Credit / Debit card or other payment card services29 Credit Rating Agency30 Custom House Agent31 Dredging Service of Rivers etc32 Dry Cleaning Services33 Eraction, Commissioning & Installation34 Event Management35 Facsimile Services36 Fashion Designing37 Foreign Exchange Broker38 Forward Contract Services39 Franchise Service40 General Insurance Service41 Health Club42 Insurance Auxiliary Service43 Intellectual Property Services44 Interior Decorator45 Internet Cafe46 Internet Telephony47 Leased Circuits48 Life Insurance49 Life Insurance Actuary & auxiiliary services50 Mailing List Compilation51 Management Consultants Services52 Management, Maintenance & Repair53 Mandap Keepers54 Manpower Recruitment & Supply55 Market Research56 Online Information & data base access or retrival57 Opinion Poll Services58 Other port services59 Outdoor Caterers Services60 Packaging Services61 Pagers62 Pandal or Shamiana Services63 Photography64 Port Services65 Programme producer66 Public relations management services67 Rail Travel Agent ServiceService tax functionality in Oracle financials for India White Paper Ver 1.0 15
  16. 16. 68 Real Estate Agent69 Recovery Agents Services70 Registrar to an issues services71 Rent-A-Cab72 Sale of Space or time for advertisement services73 Scientific & Technical Consultancy Service74 Security Agency75 Share Transfer Agents Service76 Ship Management Services77 Site Formation and Clearance78 Sound Recording Services79 Sponsorship Service80 Steamer Agents81 Stock Broker82 Storage & Warehouse83 Survey & Exploration of Minerals84 Survey and Map making85 Technical inspection and certification86 Technical Testing and Analysis87 Telegraph Services88 Telephone89 Telex Services90 Tour Operator91 Transport of goods by Aircraft92 Transport of Goods By Pipeline93 Transport of goods by Road94 Transport of goods in container by rail service95 Transport of passengers by air embarking in India during international journey96 Transport of persons embarking from india by cruise ship97 Travel Agents98 Under Writer R & D99 Video Tape ServicesThe above-mentioned service types have been provided as seeded values in the lookup codes.5.1.1. Inclusion of Service TypesIt may be noted that the user in the application can manually add service types. The need foraddition of service types arises whenever Government of India added more services videinclusion in Finance Act. The same can be done using the below steps:a) Navigate to Oracle Purchasing > Setup > Purchasing > Lookup Codesb) Query with Type as JAI_SERVICE_TYPEc) Click on New and specify the code, Meaning, description and effective from date.By doing this, User will be able to select the new service types as well in the transactions.Service tax functionality in Oracle financials for India White Paper Ver 1.0 16
  17. 17. Service type mentioned in the Supplier additional information and Customer additonal informationwould be used to default automatically in transactions like Purchase Order and Receivablestransaction and Sales Order respectively. This defaulted value can be changed in thosetransaction forms. If this setup is not carried out and service type is not mentioned even in thetransaction forms also, then Users will not be able to perform settlement.In Purchase Order localized form, as shown above, Service type got defaulted from the Supplieradditional information setup. Also the User can change this value. Similarly in Sales Orderlocalized form and Receivables transaction localized form also, User can change the defaultedservice type values. However service type cannot be changed when a RMA is created withreference to Order or Invoice. In this case, Service type of the original order will get copied to theRMA order and is shown in view mode only.Service tax functionality in Oracle financials for India White Paper Ver 1.0 17
  18. 18. 5.2 SERVICE TYPE REVIEW DURING PERIOD ENDOption has been provided to capture the Service type for those transactions where it was eithernot captured during the transactions or could not be captured for any reason. It is recommendedthat before carrying out settlement, review need to be done using the below mentioned screen. Itis also possible to query the existing transaction with service type and modify the same.Service tax functionality in Oracle financials for India White Paper Ver 1.0 18
  19. 19. In the above window, User will be able to query the records updated in the Service tax repository.Source LOV will be displaying the values Payables, Receivables, Distribution and Manual. Theseare the sources from where service tax repository will be updated. User will be able to query therecords only with Null service type. Also User has the facility to query the records based onOrganization and location combination, transaction from and to dates.On providing the filters, the following form will be openedService tax functionality in Oracle financials for India White Paper Ver 1.0 19
  20. 20. In the above form, Users can update the Service type for the transactions. It canbe updatedbased on the setup done or a specific service type can be selected. Also by checking the flag“Default only where service type is null”, only those transactions where service type is null will beupdated. Otherwise all the transactions will get updated.This form will also display the transaction level details for all the records that were updated in theservice tax repository. Hence this form is Service tax repository review form.5.3 ACCOUNTING REVIEWThis form can also be used to view the accounting entries made against Service tax. For all thosetransactions updated in the repository, on clicking view accounting button, accounting entry forthat particular transaction will be displayed.Service tax functionality in Oracle financials for India White Paper Ver 1.0 20
  21. 21. Also it may noted that the entries in repository review form and the accoutning entries can beseen only for those transactions updated in repository post application of Service tax by Inventoryorganizations and Service type patch.SERVICE TAX ACCOUNTINGThis section provides an overview on the tax accoutning process. Following figure depicts theAccounting required for Taxes. Normally tax accounting happens along with base transactionaccounting. This varies when the Tax is deferred and can be recovered or the liability arises onlyon happening of a particular accounting event in the future. For example, Service Tax recovery ison cash basis. So is the accounting. In such cases, the actual Recovery happens on payments tovendors and liability accounting happens on receipts from the customers.Once the transaction has passed through the recovery and liability event, the next phase is todistribute the credit available under this regime to taxes under other regimes. On the same linestransfers from other regime would reduce the tax liability. The total of recovered amount (net oftransferred amounts) is what remains to set-off against the Tax Liability under the regime. TheNet Liability is settled by making a payment to the Tax Authority.Following picture depicts the category of accounting events and their flowService tax functionality in Oracle financials for India White Paper Ver 1.0 21
  22. 22. TAX ACCOUNTING PROCESS Purchase Sale Base Transaction Accounting Interim Recovery Interim Liability Accounting Accounting Recovery/Liability Event Recovery Liability Accounting Accounting Distribution Tax Distribution Tax Distribution of Tax Recovered Accounting - Accounting - Entry under different Regimes Entry to reduce to reduce Tax Tax Credit Liability Accounting to Settlement - Set-off of Tax arrive of Net Tax recovered against Tax Liability liability for the Period Payment of Net Payment Tax to the AuthoritiesACCOUNTING ENTRIESAccounting for Service taxes would be done in two phases. The first would be on the Purchasingand sale event. On initial purchase and sale event, the Service Tax would be debited/credited toan interim account. This debit/credit to Interim account would be reversed on to Recovery/Liabilityaccounts on recovery/liability event.Following matrix gives the scheme of accounting entries that would be created to account ServiceTax at each event. The ‘Condition’ field provides information on transaction process or setupvariation that causes difference in accounting entries.Service tax functionality in Oracle financials for India White Paper Ver 1.0 22
  23. 23. Document Accounting Event Condition Service Tax AccountingPurchase Order Purchase Order Debit: Service Tax Interim Recovery Account Credit: AP Accrual Account Accrue on ReceiptReceiving Receive is Set to Yes Deliver Return to Receiving Debit: AP Accrual Account Credit: Service Tax Interim Recovery AccountReceiving Return to Vendor Debit: Service Tax Interim Recovery Account Credit: AP Accrual AccountCorrection Correct- Receive Debit: AP Accrual Account Correct- Return to Credit: Service Tax Interim Recovery Account Vendor Receipt Matched Invoices with Accrue on Debit: AP Accrual AccountInvoice Invoice Accounting Receipt Credit: Supplier Liability Account Receipt Matched Invoices with Accrue on Debit: Supplier Liability Account Cancellation Receipt Credit: AP Accrual Account PO Matched Invoices with Accrue on Receipt Debit: Service Tax Interim Recovery AccountInvoice Invoice Accounting as ‘No’ Credit: Supplier Liability Account PO Matched Invoices/Period Debit: Supplier Liability Account Adjustment End Accrual Credit: Service Tax Interim Recovery Account PO Matched Invoices/Period Debit: Supplier Liability Account Cancellation End Accrual Credit: Service Tax Interim Recovery Account Debit: Service Tax Recovered Account Credit: Service Tax Interim Recovery Account Prepayment Amount would be in proportion of the Amount Application applied has to Invoice Amount Debit: Service Tax Interim Recovery Account Credit: Service Tax Recovered Account Amount would be in proportion of the Amount Prepayment Unapply Unapplied has to Invoice Amount Debit: Service Tax Recovered Account Credit: Service Tax Interim Recovery Account Amount would be in proportion of the AmountPayments Payment paid has to Invoice Amount Debit: Service Tax Recovered Account Payment Maturity Credit: Service Tax Interim Recovery AccountService tax functionality in Oracle financials for India White Paper Ver 1.0 23
  24. 24. Amount would be in proportion of the Amount paid has to Invoice Amount Debit: Service Tax Recovered Account Credit: Service Tax Interim Recovery Account This entry would be created with negative Payment Cancellation amounts Accrue on Receipt Debit: Supplier Liability AccountDebit Memo Debit Memo - RTS is Set to Yes Credit: AP Accrual Account Debit: Service Tax Recovered Account Credit: Service Tax Interim Recovery Account This entry would be created with negative Refund amountsSales Order Sales OrderShipment Pick Release Shipment Debit: Receivable AccountInvoicing AR Invoice Accounting Credit: Service Tax Interim Liability Account AR Invoice Debit: Service Tax Interim Liability Account Cancellation Credit: Receivable Account Debit: Service Tax Interim Liability AccountReceipt Application Credit: Service Tax Liability Account Debit: Service Tax Liability Accoun Reversal Credit: Service Tax Interim Liability Account Debit: Service Tax Interim Liability AccountCredit Memo AR CM Accounting Credit: Receivable Account Debit: Receivable Account AR CM Cancellation Credit: Service Tax Interim Liability Account Refund CENVAT to Debit: Service Tax Recovered AccountSettlement Distribution Service Tax Credit: PLA Account Debit: PLA Account Credit: Service Tax Recovered Account Service Tax to PLA Account defined for the organization is Distribution CENVAT used here Payment to Tax Debit: Tax Liability Account Authority Credit: Service Tax Liability Account Accounting Event. This event triggers Tax Accounting. In case of Recoverable Taxes the TaxA Amount is passed to Interim AccountR Recovery Event. This event triggers Tax Recovery Accounting and Register UpdatesService tax functionality in Oracle financials for India White Paper Ver 1.0 24
  25. 25. SERVICE TAX ACCOUTING PROCESSAll Accounting events would be accounted when the Base transaction line is being accounted.The ‘India Service Tax Processing’ Concurrent program would process the recovery Accountingevents. At each run, the program would create accounting and Service Tax repository entries forall eligible transactions.Service tax functionality in Oracle financials for India White Paper Ver 1.0 25
  26. 26. SERVICE TAX DISTRIBUTIONThis facility has been provided to transfer the excess service tax credit available and set offagainst the service/excise tax liability, which is permitted under the Cenvat credit rules andService tax credit rules. User will be able to transfer the service tax credit with in the followingpermissible combinations: Sr. No. From Org To Org Transfer Type Comments 1 Inventory Organization Inventory Service - Service Handled Organization 2 Operating Unit Inventory Service – Handled Organization Service 3 Inventory Organization Inventory Service – Excise Handled Organization 4 Inventory Organization Inventory Excise – Service Handled OrganizationIt may be noted that combination # 2 specified in the above table is possible only under thescenario where service tax by operating units patch was applied and later on service tax byInventory organizations is applied. It means that if you are already using the service taxfunctionality and upgraded to latest patch sets, then for transferring the service tax balances lyingin operating units to Inventory organizations, this combination can be used. Post application ofthe latest patches, it is not possible to transfer service tax credit from one operating unit to other.It may be noted that prior to carrying out the First settlement balances available in operating unitshave to be nullified.Service tax functionality in Oracle financials for India White Paper Ver 1.0 26
  27. 27. User can select the service type against which distribution needs to be carried out. Service Taxtype in the destination organization will be the same as the Service Type given in the sourceorganization at header.To confirm the transfer User will have to press the ‘Distribute’ button.Please note that the total of amount(s) transferred to the destination organization have to matchthe amount transferred from the source organization.Service tax functionality in Oracle financials for India White Paper Ver 1.0 27
  28. 28. SERVICE TAX MANUAL ENTRYThis functionality is provided as a means for handling exceptional scenarios in your businessprocess that necessitate capturing of such transactions outside the normal transaction cycles.Manual Entry transactions for Service tax may be used for passing Adjustment entries for servicetax Recovery / Liability transactions done in the Procure to pay and Order to cash Cycles. Servicetax Recovery / Liability, Service tax Payment transactions can also be created directly using thiswindow.It may be noted that for the transaction type payment, no accounting entries would be generatedby the system. This is because, the accounting would happen at the time of making the InvoicePayment in payables and the Service Tax - Manual Transaction "Payment" entry is just to enterthe payment in to the service tax repository without any accounting entry. Any "Payment" typemanual entry, without a corresponding AP Invoice Payment with appropriate accountingdistribution, will cause incorrect settlement.Service tax functionality in Oracle financials for India White Paper Ver 1.0 28
  29. 29. SERVICE TAX SETTLEMENTUsers need to perform the periodic settlement of Service tax to the Authorities. For this purpose,settlement form has been provided. In this form, Users will be able to the process the records forsettlement which will generate an AP Invoice against the Service tax authorities. Settlementprocess should be performed before payment is made to the Service Tax authority andsubmission of returns. This will ensure that the records are processed for settlement andnecessary accounting is passed.The system will automatically create an AP invoice in favor of the Service Tax authority. Userswill have to select the Service Tax authority and site for which AP invoice needs to be created.Service tax functionality in Oracle financials for India White Paper Ver 1.0 29
  30. 30. Payment made to the Service Tax authorities is made by TR-6 challan, you can capture the TR-6challan number and challan date in the fields provided.On giving the requisite details, press the ‘Process’ button. On doing this, the system will internallygenerate distribution entries between different organizations and mark the selected records as‘settled’. This will also create an AP invoice in favor of the Service Tax authority.Service tax settlement illustration:On performing the settlement process, Users will have to navigate to the Find Settlementsscreen.Users can find all the settlements performed from this screen. LOV for ‘Settlement Status’contains 2 values viz. Settlement Status Description Settled This means that AP invoice has been paid and payment has been processed in the ‘Settlement Details’ screen. Payment Due This means the AP invoice has beenService tax functionality in Oracle financials for India White Paper Ver 1.0 30
  31. 31. paid/unpaid but the payment has not been processed in the ‘Settlement Details’ screen.On processing the records in the ‘Service Tax Settlement’ screen Users can find out the APinvoice number that has been generated using this screen. On finding out the AP invoice number,they should navigate to AP and pay the invoice.On payment of AP invoice you will again find the AP invoice using the above find window to showthe following screenInvoice status will be shown in the above screen. The different statuses are as follows: Invoice Status Description Imported AP invoice has been created and not yet paidService tax functionality in Oracle financials for India White Paper Ver 1.0 31
  32. 32. Partially Paid AP invoice partially paid Paid AP invoice fully paid In Interface Invoice is created but is stuck in the interface Payment processed Indicates that settlement process is completedOnce the AP Invoice is paid, Users need to navigate to the above form and check in the processpayment flag and click the process payment to ensure that the settlement process is complete.REPORTINGThe following reports are available currently with respect to Service tax functionality in Financialsfor India: a) India Service tax Report b) India – Service tax credit register report. c) India Service tax Pending Liability report d) India Service tax pending recovery report e) India Service tax ST3 report.1.2 India Service tax reportThis report display transactions leading to Service Tax liability. Only those Invoices, which haveService Tax Type of Taxes, and for which Receipt has been assigned will be considered for thisreportService tax functionality in Oracle financials for India White Paper Ver 1.0 32
  33. 33. 1.3 India Service tax Credit register reportThis report lists the transactions from which service tax credit was availed.Service tax functionality in Oracle financials for India White Paper Ver 1.0 33
  34. 34. 1.4 India Service tax Pending Liability ReportThis report shows the AR transactions where in Service tax type of taxes have been used andreceipt is not yet applied for those transactions.Service tax functionality in Oracle financials for India White Paper Ver 1.0 34
  35. 35. 1.5 India Service tax pending recovery reportThis report displays the AP Invoices where in Service tax type of taxes are used and which arenot yet paid.Service tax functionality in Oracle financials for India White Paper Ver 1.0 35
  36. 36. 1.6 India Service tax ST3 reportThis Report gives you the Service Tax repository data in ST3 Format.Service tax functionality in Oracle financials for India White Paper Ver 1.0 36
  37. 37. It may be noted that this report output will capture data only to the extent relevant input data isentered in the system. For example as per the format provided by Authorities, in the report output,User has to enter details like exemptions availed, abatement etc., which are not captured in thesystem and hence the same columns in the report will not display any values.11. DIAGNOSTIC SCRIPTSDiagnostic Scripts provides an overview on troubleshooting the service tax related issues usingthe diagnostic scripts provided in metalink note # 402711.1 (Financials for India Diagnosticscripts).11.1 Interpreting PO-AP Diagnostic ScriptsScript Name: loc_rec_po11i_4.sqlThe above script needs to be run for a receipt number and organization_id. This script outputshows the receipt transactions details and the relevant setups done. In the above script, thefollowing table details are relevant with respect to Service tax:1. Receipt details:From the tables JA_IN_RECEIPT_LINES and JA_IN_RECEIPT_TAX_LINES, receipt line detailsand the taxes attached to the receipt line can be verified.2. Tax code Setup:From the table JA_IN_TAX_CODES, you would know the tax type of all the taxes attached to theshipment lines of the receipts. a. Tax_account_id: When the charge account is specified with Mod_cr_percentage less than ‘100’, non recoverable amount will be apportioned to this account. b. Modifiable_flag: If Y allows to modify the tax at transaction level. c. Mod_cr_percentage: For excise taxes if the %=100 then the Receipt will appear in Claim CENVAT screen and CENVAT, Excise registers will be generated.3. Financials for India Organization setup details:The Additional Organization Information setup details can be had for that particular organizationfrom the table ja_in_hr_organization_units.Script Name: loc_aplist11i.sqlThe above script needs to be run for an Invoice_id (AP Invoice) and the vendor_id. This scriptlists the table level details for an AP Invoice and the relevant setups done. In the above script, thefollowing table details are relevant with respect to Service tax:1. Regime registration setup details:Service tax functionality in Oracle financials for India White Paper Ver 1.0 37
  38. 38. From the tables JAI_RGM_REGNS and JAI_RGM_PARTIES, regime registration setup detailsdone at inventory organization level can be verified.2. Service tax Repository details:JAI_RGM_TRX_REFS table will get populated when the invoice is accounted and the India –Service tax processor concurrent program is run successfully. This table shows the service taxamounts populated in the AP Invoice.JAI_RGM_TRX_RECORDS table will get populated when the invoice is paid and the India –Service tax processor concurrent program is run successfully. This is the table that holds theservice tax repository data.Service tax functionality in Oracle financials for India White Paper Ver 1.0 38

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