Withholding tax for sales
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Former Member
July 29, 2013 3 minute read
Withholding tax for sales
351819,912
Withholding tax or Tax collected at source
In India tax has to be collected at source (by the seller) from buyer on specific items like alcoholic liquor, tendu leaves, timber, other forest produce, on mining/quarrying & scrap. Withholding tax rate or TCS rate is generally 1% – 5% varying from product to product. We will see below process configuration for TCS on sale of affected products by creating a provision for the same in sales pricing procedure.
1. First we will create two condition types say JTCS for charging TCS in sales order & JWTS for posting TCS amount in FI with an offsetting entry. Here, JWTS will be 100% value of JTCS and will be posted from sales order with accrual key say JTS.
3. Assign withholding tax type in customer master as under
NOTE: Create condition records for JTCS – 1% with withholding tax code T1 & JWTS – 100% with tax code T1 for your key combination in VK11.
Tax collected at source entries in accounting document from sale of scrap will be as under:
Please note Extended withholding tax has to be activated for the company code and relevant FI configuration is required before use of withholding tax in Sales.
FI Configuration is as under
Define Withholding Tax Keys
After including country code (IN) in basic settings – check withholding tax countries, a key for withholding tax has to be created. Enter official key 206C for withholding tax – Tax collected at source
Double-click and choose configuration for T1. Your choice of base amount & rounding rule here have to be backed up with subsequent configuration for the same.
3. Assign condition type JTCS to withholding tax type T1.
4. Define withholding tax code in FI
Assign Withholding tax code for withholding tax type T1.
5. Further, assign withholding tax type to company code and define accounts for the same.
6.Define accounts for withholding tax to be paid over and accounts for withholding tax offsetting entry
7. Define processing key for modified net amount
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Assigned Tags
Internationalization and Unicode
SAP ERP
SD (Sales and Distribution)
enterprise resource planning
sap erp sales and distribution
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35 Comments
Former Member
July 31, 2013 at 10:14 am
Its seems useful stuff to configure TCS for business specific requirement.
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Former Member
August 5, 2013 at 12:01 pm
good one
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Former Member
Blog Post Author
August 7, 2013 at 4:41 am
Thank You
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Muthukumareshan vijayan
August 22, 2013 at 1:49 pm
Hi
Helpful information Thanks u
Thanks
Muthu
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Former Member
Blog Post Author
August 22, 2013 at 4:12 pm
thank you Muthu...
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Former Member
August 22, 2013 at 4:15 pm
Hi
Helpful Information Thanks
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Former Member
Blog Post Author
August 22, 2013 at 4:17 pm
Thank you Pramod..
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Jyoti Prakash
August 23, 2013 at 5:57 am
As scenario is related to Country India document moved to Internationalization and Unicode
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Former Member
Blog Post Author
August 23, 2013 at 1:20 pm
Noted & Thank you
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Srinu S
September 7, 2013 at 5:51 pm
Good document.
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Former Member
Blog Post Author
September 8, 2013 at 4:20 pm
Thank you Srinivas!
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Former Member
November 21, 2013 at 3:50 pm
Nice one Karuna!!.. Thanks for sharing.
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Former Member
Blog Post Author
November 22, 2013 at 4:38 am
You are welcome
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Rakesh S
November 23, 2013 at 9:51 am
Very useful document Karuna. thanks for sharing helpful document. Keep sharing.
Rakesh
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Former Member
Blog Post Author
November 23, 2013 at 11:48 am
Thank you Rakesh
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manu m
December 2, 2013 at 7:50 am
good one
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Former Member
Blog Post Author
December 2, 2013 at 8:28 am
Thank you
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G Lakshmipathi
December 13, 2013 at 12:22 pm
Karuna Ravuri
Only after Abhishek Laghate referring your blog, I have gone through and you have nicely presented. Keep it up and by the way, I have one query. You should be aware, for implementing TCS, couple of OSS notes are there and you have not mentioned about those notes in your blog. So do you mean to say, without implementing those notes also, this can be achieved ? It is more than 5 years since I touched this area and not able to recollect how I achieved in one of my earlier projects.
G. Lakshmipathi
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Former Member
Blog Post Author
December 14, 2013 at 12:36 pm
Hi Lakshmipathi, Thank you for your appreciation!
Regarding OSS notes, I really need to go through them before commenting. I noted you mentioned two notes in Abhishek's discussion which I will check and revert back.
When I along with my FI counterpart did the TCS configuration for one of our clients, we did not refer to any SAP notes, but did google on the subject
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G Lakshmipathi
December 15, 2013 at 6:43 am
Apart from the notes I referred, there are also other couple of notes like 1168591, 1394827, 1873488 etc., which I feel, definitely in your system.
G. Lakshmipathi
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Former Member
Blog Post Author
December 16, 2013 at 6:59 am
No, I checked all notes you mentioned and we did not follow any notes other than 168591 as it has reference config guide.
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Former Member
December 13, 2013 at 11:15 am
Thanks a lot Karuna,
I resolved my issue through this document. Thanks once again.
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Former Member
Blog Post Author
December 13, 2013 at 12:20 pm
Glad to know it helped resolve your issue Abhishek. Thank you.
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Pradeep Mani
December 16, 2013 at 9:19 am
Informative
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Former Member
Blog Post Author
December 16, 2013 at 10:24 am
Thank you
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CH Raman
December 16, 2013 at 9:36 am
Good presentation and useful doc.
Thanks for your efforts and sharing.
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Former Member
Blog Post Author
December 16, 2013 at 10:24 am
Glad you found it useful Raman Thank you.
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Former Member
December 16, 2013 at 10:25 am
Very good piece of information. Thanks for sharing.
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Former Member
Blog Post Author
December 16, 2013 at 11:43 am
You're welcome Arshiyan
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Former Member
January 4, 2014 at 8:49 am
Hi Karuna Ravuri,
Really useful share.
Great
Thanks a lot
Regards
ACR.Ruben
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Former Member
Blog Post Author
January 5, 2014 at 6:31 am
Glad you find it useful Ruben
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Former Member
July 1, 2017 at 2:23 pm
Hi Karuna,
I did all the above configuration. My sale orders have more than one item. In accounting document, withholding tax lines(OFF, WIT) appeared only for first item. why offsetting entry is not done for remaining items ?
Below is my accounting document of invoice having two scrap items. Please help.
Regards
Kks
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Former Member
May 30, 2016 at 6:47 am
Hi Karuna,
Thanks for this step by step TCS configuration.
We have done all configuration as per your suggestion but FI document result is not correct.
Withholding tax percentage is 1 %. While posting document, WHT calculated on Base amt + Vat +SD tax ZTC*1% (100000 + 12500 + 1125*1% = 1136.25) however it should be Base amount + Vat *1% (100000 + 12500*1% = 1125)
Can you please urgently advise why we are not getting correct result ?
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Rajesh Kumar Sinha
January 30, 2019 at 9:24 am
Hi Karuna,
Appreciate for the effort you took for presenting the topic TCS.
I have doubt on TCS, my client needs TCS should be a mandatory field in F-29 and I made all the configuration as per the oss note (same as your document) but the accounting entry is coming as for example:
Currently the system is showing the entry as
40 Bank a/c Dr 4000
40 TCS a/c Dr 500
19A To Customer a/c Cr 4500
But it should come as
40 Bank a/c Dr 4500
19A To customer a/c Cr 4000
50 To TCS a/c Cr 500
When I referred another OSS note and found out (1394827) that TCS reporting is supported only for documents posted via SD route ; Direct FI postings are not supported.
My question is there any way to make the TCS as mandatory field during billing?
It would be great if you suggest some opinion on this issue.
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Sunil K Roge
September 2, 2020 at 10:53 am
Hi Karuna,
I find your document very helpful now that 206C(1H) is effective 1st Oct 2020.
I am not getting line item for TCS Clearing against accnt key JTS in the document posted to FI.
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