Service Tax White Paper R12

WHITE PAPER Service Tax Functionality in Financials for India Release 12
Prepared by Author: Krishna Surapaneni Financials for India Support Creation Date: 27-April-2009 Last Updated: Control Number: 1 Version: 1 Copyright (C) 2009 Oracle Corporation All Rights Reserved Product Design and Architecture
Service tax functionality in Oracle financials for India White Paper Release 12 Ver 1.0
Table of Contents
1. SCOPE .......................................................................................................................... 3 2. INTRODUCTION ......................................................................................................... 4 3. OVERVIEW................................................................................................................... 5 4. SETUP ........................................................................................................................... 6 4.1 Regime Registration.............................................................................................. 6 4.1.1 Service Tax Registration .................................................................................... 6 4.1.2 Assigning Tax Types ......................................................................................... 7 4.2 Customer Additional Information ....................................................................... 10 4.3 Supplier Additional Information ......................................................................... 11 4.5 Definition of Service tax Authority ..................................................................... 14 5. SIGNIFICANCE OF SERVICE TYPE..................................................................... 15 5.1 What is Service type.......................................................................................... 15 5.1.1. Inclusion of Service Types ............................................................................. 17 5.2 SERVICE TYPE REVIEW DURING PERIOD END ....................................... 19 5.3 ACCOUNTING REVIEW .................................................................................... 20 6. SERVICE TAX ACCOUNTING ............................................................................... 22 6.1 ACCOUNTING ENTRIES .................................................................................. 23 6.2 SERVICE TAX ACCOUTING PROCESS........................................................ 25 7. SERVICE TAX DISTRIBUTION .............................................................................. 26 8. SERVICE TAX MANUAL ENTRY .......................................................................... 28 9. SERVICE TAX SETTLEMENT................................................................................ 29 10. REPORTING ............................................................................................................ 33 10.1 India Service tax report ......................................................................................... 33 10.2 India Service tax Credit register report ................................................................. 34 10.3 India Service tax Pending Liability Report ........................................................... 35 10.4 India Service tax pending recovery report ............................................................ 36 10.5 India Service tax ST3 report ................................................................................. 37
1. SCOPE
This paper is intended for an audience familiar with Oracle Financials for India and seeking an insight into how the new functionality of Service tax regime is built to cover the statutory requirement in India. This paper is functional in nature keeping in sight Oracles existing literature that has adequate details on the technical aspect of the Oracle Financials for India, though adequate insight is given to the table level details relevant to the topic. This is more so, in the light of the diagnostic scripts avaialble in metalink note # 472679.1, thus making table level details easily accessible to the user. Thus we have tried to handle the topic from the available functionality as well as the data perspective level. To prevent this document from becoming too bulky, and also to maintain focus throughout the paper, the scope of this paper is limited to the basic set up need for defining the Service tax regime, factors to be kept in mind while defining the Service tax regime, Transaction flow and the reports 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 be a substitute for any official literature being drafted or currently published.
2. INTRODUCTION
Taxes in India are classified as Direct and Indirect taxes. Direct taxes are those taxes whose impact will be borne directly by persons. Income tax and Wealth tax are the examples of Direct taxes where levy and recovery will be from the persons directly. Indirect taxes are those taxes whose burden can be passed on to the Buyers of goods and services. For example, Excise taxes are levied on the manufacturers, however, that taxes portion will be recovered from the buyer of goods as part of the price. Similarly Service tax is levied on the service provider whereas the service provider passes on the burden to service receiver. Finance Act, 1994 introduced the levy of tax on Services rendered, hereafter referred as Service tax in India. Initially service tax was imposed on 3 services and the scope is being widened every year. Service tax solution was developed by Oracle Financials for India to meet the statutory requirements in India. Hence features provided in the product are based on the provisions of the Finance act, as amended from time to time and the service tax credit rules framed by the statutory authority.
3. OVERVIEW
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.
4. SETUP 4.1 Regime Registration

Regime would be used to define the registration details of the organization and rules that would be applicable to all taxes assigned to it. Following figure depicts the regime structure:
DEFINING SERVICE TAX REGIME
Define Regimes
Registrations
Assign Orgnaizations
Assign Tax Types
Assign Organization Accounts
Assign Tax Accounts
On a regime, you will be able to capture the registration details of the Organization and rules that would be applicable to the transactions created with service type of taxes. Information defined here would be generic and would be applicable to all the organizations defined under this regime unless changed at the Organization level.
4.1.1 Service Tax Registration

Organizations have to register with the various Service Tax Authorities. The registration would be the 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:
In the registrations tab, parameters relating to the Organization as a whole are defined such as Registration 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 credit distribution is Service tax distribution in PLA/RG. Based on the register name specified here, Accounting and register updates will happen.
4.1.2 Assigning Tax Types

Service Tax Types have to be assigned to the Service Tax regime. This is a logical grouping of all transactions to which these taxes are applicable. If the values assigned for a particular tax were different, these would prevail over those defined for the regime.
Under this tab, tax types applicable for this Service tax and account codes applicable can be assigned. Currently Education cess and Secondary higher education cess are also leviable on the Service tax amount. Account codes that will be used for accounting of Service taxes need to be specified in the tax account details. As Service Tax is accounted on cash basis apart from final Recovery and Liability Accounts, interim accounts have to be defined that will store the Service Tax which has not been paid / received
4.1.3 Assigning Organizations

Regime has to be assigned to all organizations to which it is applicable. Taxes defined under this regime would default only for these organizations.
Under the Organization details, User will be able to assign the Inventory Organizations to which the 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 taxes will happen only for the assigned locations.
Registration details, tax types assignment and the account values assignment can be assigned to the 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 checked whenever default registration values at the regime level are retained. It gets unchecked when registration value is modified.
4.2 Customer Additional Information

To be able to make transactions in Order to Cash cycle, Customer additional information setup need to be completed for those Customers from whom service tax amount will be recovered. In this form, Service tax registration number and the Service tax type applicable for that particular Customer needs 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.
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4.3 Supplier Additional Information

To be able to make transactions in Procure to pay cycle, Supplier additional information setup need 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 supplier needs 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.
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4.4 Tax code definition

In Tax code definition form, Service tax type codes can be defined and the same can be used in the transactions. It has to be noted that Service tax codes have to be defined as recoverable taxes by specifying the credit percentage as 100. Otherwise the accoutning will not happen as mentioned in this document and those taxes will be considered for costing in Procure to pay cycle.
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Currently the following tax types are applicable for Service tax and the same have been provided as seeded values in the tax type field: a) Service tax b) Education cess on Service tax c) Secondary Higher education cess on Service tax.
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4.5 Definition of Service tax Authority

Apart from the above setups, Service tax Authority need to be defined as supplier in Supplier definition window. Also supplier and supplier site defined here will appear in the Service tax settlement window for settling the balances.
After defining the same, click on Organization tab and ensure that Supplier type is selected as India Service tax Authority.
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5. SIGNIFICANCE OF SERVICE TYPE 5.1 What is Service type

Service tax is payable on the taxable Services as defined in varoius clauses of section 65(105) of the Finance act 1994. Type of service is relevant for determining the amount chargeable for tax and 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 service types are chargeable to tax: 1 Actioneer's 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 Parlour 10 Broadcasting 11 Business Auxiliary Services 12 Business Exhibition Services 13 Business Support Services 14 C & F Agents 15 Cable Operator 16 Cargo Handling 17 Chartered Accountant (1-1500) 18 Cleaning Services 19 Club or Association services 20 Commercial or Industrial construction services 21 Commercial Training Coach 22 Company Secretary 23 Construction of Complex 24 Consulting Engineer 25 Convention Services 26 Cost Accountant 27 Courier 28 Credit / Debit card or other payment card services 29 Credit Rating Agency 30 Custom House Agent 31 Dredging Service of Rivers etc 32 Dry Cleaning Services 33 Eraction, Commissioning & Installation 34 Event Management 35 Facsimile Services 36 Fashion Designing 37 Foreign Exchange Broker 38 Forward Contract Services 39 Franchise Service 40 General Insurance Service 41 Health Club
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42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93
Insurance Auxiliary Service Intellectual Property Services Interior Decorator Internet Cafe Internet Telephony Leased Circuits Life Insurance Life Insurance Actuary & auxiiliary services Mailing List Compilation Management Consultant's Services Management, Maintenance & Repair Mandap Keepers Manpower Recruitment & Supply Market Research Online Information & data base access or retrival Opinion Poll Services Other port services Outdoor Caterer's Services Packaging Services Pagers Pandal or Shamiana Services Photography Port Services Programme producer Public relations management services Rail Travel Agent Service Real Estate Agent Recovery Agent's Services Registrar to an issue's services Rent-A-Cab Sale of Space or time for advertisement services Scientific & Technical Consultancy Service Security Agency Share Transfer Agent's Service Ship Management Services Site Formation and Clearance Sound Recording Services Sponsorship Service Steamer Agents Stock Broker Storage & Warehouse Survey & Exploration of Minerals Survey and Map making Technical inspection and certification Technical Testing and Analysis Telegraph Services Telephone Telex Services Tour Operator Transport of goods by Aircraft Transport of Goods By Pipeline Transport of goods by Road
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94 95 96 97 98 99
Transport of goods in container by rail service Transport of passengers by air embarking in India during international journey Transport of persons embarking from india by cruise ship Travel Agents Under Writer R & D Video Tape Services
The above-mentioned service types have been provided as seeded values in the lookup codes.
5.1.1. Inclusion of Service Types

It may be noted that the user in the application can manually add service types. The need for addition of service types arises whenever Government of India added more services vide inclusion in Finance Act. The same can be done using the below steps: a) Navigate to India Local Purchasing > Asia/Pacific Lookups b) Query with Type as JAI_SERVICE_TYPE c) 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 type mentioned in the Supplier additional information and Customer additonal information would be used to default automatically in transactions like Purchase Order and Receivables transaction and Sales Order respectively. This defaulted value can be changed in those transaction forms. If this setup is not carried out and service type is not mentioned even in the transaction forms also, then Users will not be able to perform settlement.
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In Purchase Order localized form, as shown above, Service type got defaulted from the Supplier additional information setup. Also the User can change this value. Similarly in Sales Order localized form and Receivables transaction localized form also, User can change the defaulted service type values. However service type cannot be changed when a RMA is created with reference to Order or Invoice. In this case, Service type of the original order will get copied to the RMA order and is shown in view mode only.
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5.2 SERVICE TYPE REVIEW DURING PERIOD END

Option has been provided to capture the Service type for those transactions where it was either not captured during the transactions or could not be captured for any reason. It is recommended that before carrying out settlement, review need to be done using the below mentioned screen. It is also possible to query the existing transaction with service type and modify the same.
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. These are the sources from where service tax repository will be updated. User will be able to query the records only with Null service type. Also User has the facility to query the records based on Organization and location combination, transaction from and to dates. On providing the filters, the following form will be opened
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In the above form, Users can update the Service type for the transactions. It canbe updated based 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 be updated. Otherwise all the transactions will get updated. This form will also display the transaction level details for all the records that were updated in the service tax repository. Hence this form is Service tax repository review form.
5.3 ACCOUNTING REVIEW

This form can also be used to view the accounting entries made against Service tax. For all those transactions updated in the repository, on clicking view accounting button, accounting entry for that particular transaction will be displayed.
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6. SERVICE TAX ACCOUNTING

This section provides an overview on the tax accoutning process. Following figure depicts the Accounting required for Taxes. Normally tax accounting happens along with base transaction accounting. This varies when the Tax is deferred and can be recovered or the liability arises only on happening of a particular accounting event in the future. For example, Service Tax recovery is on cash basis. So is the accounting. In such cases, the actual Recovery happens on payments to vendors and liability accounting happens on receipts from the customers. Once the transaction has passed through the recovery and liability event, the next phase is to distribute the credit available under this regime to taxes under other regimes. On the same lines transfers from other regime would reduce the tax liability. The total of recovered amount (net of transferred amounts) is what remains to set-off against the Tax Liability under the regime. The Net Liability is settled by making a payment to the Tax Authority. Following picture depicts the category of accounting events and their flow
TAX ACCOUNTING PROCESS

Purchase Sale
Base Transaction Accounting
Interim Recovery Accounting
Interim Liability Accounting
Recovery/Liability Event
Recovery Accounting
Liability Accounting
Distribution of Tax Recovered under different Regimes
Distribution Tax Accounting Entry to reduce Tax Credit
Distribution Tax Accounting - Entry to reduce Tax Liability
Settlement - Set-off of Tax recovered against Tax Liability
Accounting to arrive of Net Tax liability for the Period
Payment
Payment of Net Tax to the Authorities
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6.1 ACCOUNTING ENTRIES

Accounting for Service taxes would be done in two phases. The first would be on the Purchasing and sale event. On initial purchase and sale event, the Service Tax would be debited/credited to an interim account. This debit/credit to Interim account would be reversed on to Recovery/Liability accounts on recovery/liability event. Following matrix gives the scheme of accounting entries that would be created to account Service Tax at each event. The Condition field provides information on transaction process or setup variation that causes difference in accounting entries.
Document Purchase Order
Accounting Event Purchase Order
Condition
Service Tax Accounting Debit: Service Tax Interim Recovery Account Credit: AP Accrual Account
Receiving
Receive Deliver Return to Receiving
Accrue on Receipt is Set to 'Yes'
Debit: AP Accrual Account Credit: Service Tax Interim Recovery Account Receiving Return to Vendor Debit: Service Tax Interim Recovery Account Credit: AP Accrual Account Correction Correct- Receive Correct- Return to Vendor Receipt Matched Invoices with 'Accrue on Receipt' Receipt Matched Invoices with 'Accrue on Receipt' PO Matched Invoices with Accrue on Receipt as No Debit: AP Accrual Account Credit: Service Tax Interim Recovery Account
Invoice
Invoice Accounting
Debit: AP Accrual Account Credit: Supplier Liability Account
Cancellation
Debit: Supplier Liability Account Credit: AP Accrual Account
Invoice
Invoice Accounting
Debit: Service Tax Interim Recovery Account Credit: Supplier Liability Account
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Adjustment
Cancellation
PO Matched Invoices/Period End Accrual PO Matched Invoices/Period End Accrual
Debit: Supplier Liability Account Credit: Service Tax Interim Recovery Account Debit: Supplier Liability Account Credit: Service Tax Interim Recovery Account Debit: Service Tax Recovered Account Credit: Service Tax Interim Recovery Account Amount would be in proportion of the Amount applied has to Invoice Amount Debit: Service Tax Interim Recovery Account Credit: Service Tax Recovered Account Amount would be in proportion of the Amount Unapplied has to Invoice Amount Debit: Service Tax Recovered Account Credit: Service Tax Interim Recovery Account Amount would be in proportion of the Amount paid has to Invoice Amount Debit: Service Tax Recovered Account Credit: Service Tax Interim Recovery Account Amount would be in proportion of the Amount paid has to Invoice Amount Debit: Service Tax Recovered Account Credit: Service Tax Interim Recovery Account
Prepayment Application
Prepayment Unapply
Payments
Payment
Payment Maturity
Payment Cancellation Debit Memo Debit Memo - RTS
This entry would be created with negative amounts Accrue on Receipt Debit: Supplier Liability Account 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 amounts
Sales Order Shipment
Refund Sales Order Pick Release Shipment
Invoicing
AR Invoice Accounting AR Invoice Cancellation Application Reversal
Receipt
Credit Memo
AR CM Accounting AR CM Cancellation
Debit: Receivable Account Credit: Service Tax Interim Liability Account Debit: Service Tax Interim Liability Account Credit: Receivable Account Debit: Service Tax Interim Liability Account Credit: Service Tax Liability Account Debit: Service Tax Liability Accoun Credit: Service Tax Interim Liability Account Debit: Service Tax Interim Liability Account Credit: Receivable Account Debit: Receivable Account Credit: Service Tax Interim Liability Account
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Refund Settlement Distribution CENVAT to Service Tax Debit: Service Tax Recovered Account Credit: PLA Account Debit: PLA Account Credit: Service Tax Recovered Account PLA Account defined for the organization is used here Debit: Tax Liability Account Credit: Service Tax Liability Account
Distribution Payment to Tax Authority
Service Tax to CENVAT
A R
Accounting Event. This event triggers Tax Accounting. In case of Recoverable Taxes the Tax Amount is passed to Interim Account Recovery Event. This event triggers Tax Recovery Accounting and Register Updates
6.2 SERVICE TAX ACCOUTING PROCESS

All Accounting events would be accounted when the Base transaction line is being accounted. The India Service Tax Processing Concurrent program would process the recovery Accounting events. At each run, the program would create accounting and Service Tax repository entries for all eligible transactions.
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7. SERVICE TAX DISTRIBUTION

This facility has been provided to transfer the excess service tax credit available and set off against the service/excise tax liability, which is permitted under the Cenvat credit rules and Service tax credit rules. User will be able to transfer the service tax credit with in the following permissible combinations:
Sr. No. 1 2 3 4
From Org Inventory Organization Operating Unit Inventory Organization Inventory Organization
To Org Inventory Organization Inventory Organization Inventory Organization Inventory Organization
Transfer Type Service - Service Service Service Service Excise Excise Service
Comments Handled Handled Handled Handled
It may be noted that combination # 2 specified in the above table is possible only under the scenario where you were using the financials for India in earlier versions (11i) and later on migrated to release 12. It means that if you are already using the service tax functionality and upgraded to latest patch sets, then for transferring the service tax balances lying in operating units to Inventory organizations, this combination can be used. Post application of the 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 units have to be nullified. User can select the service type against which distribution needs to be carried out. Service Tax type in the destination organization will be the same as the Service Type given in the source organization at header.
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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 match the amount transferred from the source organization.
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8. SERVICE TAX MANUAL ENTRY

This functionality is provided as a means for handling exceptional scenarios in your business process 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 service tax Recovery / Liability transactions done in the Procure to pay and Order to cash Cycles. Service tax Recovery / Liability, Service tax Payment transactions can also be created directly using this window.
It may be noted that for the transaction type payment, no accounting entries would be generated by the system. This is because, the accounting would happen at the time of making the Invoice Payment in payables and the Service Tax - Manual Transaction "Payment" entry is just to enter the payment in to the service tax repository without any accounting entry. Any "Payment" type manual entry, without a corresponding AP Invoice Payment with appropriate accounting distribution, will cause incorrect settlement.
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9. SERVICE TAX SETTLEMENT

Users 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 for settlement which will generate an AP Invoice against the Service tax authorities. Settlement process should be performed before payment is made to the Service Tax authority and submission of returns. This will ensure that the records are processed for settlement and necessary accounting is passed.
The system will automatically create an AP invoice in favor of the Service Tax authority. Users will have to select the Service Tax authority and site for which AP invoice needs to be created. Payment made to the Service Tax authorities is made by TR-6 challan, you can capture the TR-6 challan number and challan date in the fields provided. On giving the requisite details, press the Process button. On doing this, the system will internally generate 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:
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On performing the settlement process, Users will have to navigate to the Find Settlements screen. Users can find all the settlements performed from this screen. LOV for Settlement Status contains 2 values viz. Settlement Status Settled Description This means that AP invoice has been paid and payment has been processed in the Settlement Details screen. This means the AP invoice has been paid/unpaid but the payment has not been processed in the Settlement Details screen.
Payment Due
On processing the records in the Service Tax Settlement screen Users can find out the AP invoice number that has been generated using this screen. On finding out the AP invoice number, they should navigate to AP and pay the invoice.
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On payment of AP invoice you will again find the AP invoice using the above find window to show the following screen
Invoice status will be shown in the above screen. The different statuses are as follows: Invoice Status Imported Partially Paid Paid In Interface Payment processed Description AP invoice has been created and not yet paid AP invoice partially paid AP invoice fully paid Invoice is created but is stuck in the interface Indicates that settlement process is completed
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Once the AP Invoice is paid, Users need to navigate to the above form and check in the process payment flag and click the process payment to ensure that the settlement process is complete.
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10. REPORTING
The following reports are available currently with respect to Service tax functionality in Financials for 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.
10.1 India Service tax report

This report display transactions leading to Service Tax liability. Only those Invoices, which have Service Tax Type of Taxes, and for which Receipt has been assigned will be considered for this report
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10.2 India Service tax Credit register report

This report lists the transactions from which service tax credit was availed.
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10.3 India Service tax Pending Liability Report

This report shows the AR transactions where in Service tax type of taxes have been used and receipt is not yet applied for those transactions.
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10.4 India Service tax pending recovery report

This report displays the AP Invoices where in Service tax type of taxes are used and which are not yet paid.
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10.5 India Service tax ST3 report

This Report gives you the Service Tax repository data in ST3 Format.
It may be noted that this report output will capture data only to the extent relevant input data is entered 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 the system and hence the same columns in the report will not display any values.
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11. DIAGNOSTIC SCRIPTS

Diagnostic Scripts provides an overview on troubleshooting the service tax related issues using the diagnostic scripts provided in metalink note # 472679.1 (Financials for India Diagnostic scripts).
11.1 Interpreting PO-AP Diagnostic Scripts

Script Name: loc_diag_po_rcp_R12.sql The above script needs to be run for a receipt number and organization_id. This script output shows the receipt transactions details and the relevant setups done. In the above script, the following table details are relevant with respect to Service tax:
1. Receipt details: From the tables JAI_RCV_LINES and JAI_RCV_LINE_TAXES, receipt line details and the taxes attached to the receipt line can be verified. 2. Tax code Setup: From the table 'JAI_CMN_TAXES_ALL', you would know the tax type of all the taxes attached to the shipment 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 organization from the table JAI_CMN_INVENTORY_ORGS.
Script Name: R12_loc_aplist R12.sql The above script needs to be run for an Invoice_id (AP Invoice) and the vendor_id. This script lists the table level details for an AP Invoice and the relevant setups done. In the above script, the following table details are relevant with respect to Service tax:
1. Regime registration setup details: From the tables JAI_RGM_REGISTRATIONS and JAI_RGM_PARTIES, regime registration setup details done at inventory organization level can be verified.
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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 tax amounts 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 the service tax repository data.
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Service Tax White Paper R12

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WHITE PAPER Service Tax Functionality in Financials for India Release 12

4. SETUP 4.1 Regime Registration

DEFINING SERVICE TAX REGIME

Assign Tax Types

Assign Organization Accounts

Assign Tax Accounts

4.1.1 Service Tax Registration

4.1.2 Assigning Tax Types

4.1.3 Assigning Organizations

4.2 Customer Additional Information

4.3 Supplier Additional Information

4.4 Tax code definition

4.5 Definition of Service tax Authority

5. SIGNIFICANCE OF SERVICE TYPE 5.1 What is Service type

5.1.1. Inclusion of Service Types

5.2 SERVICE TYPE REVIEW DURING PERIOD END

5.3 ACCOUNTING REVIEW

6. SERVICE TAX ACCOUNTING

TAX ACCOUNTING PROCESS

Base Transaction Accounting

Interim Recovery Accounting

Interim Liability Accounting

Distribution of Tax Recovered under different Regimes

Distribution Tax Accounting Entry to reduce Tax Credit

Distribution Tax Accounting - Entry to reduce Tax Liability

Settlement - Set-off of Tax recovered against Tax Liability

Accounting to arrive of Net Tax liability for the Period

Payment of Net Tax to the Authorities

6.1 ACCOUNTING ENTRIES

Document Purchase Order

Accounting Event Purchase Order

Receive Deliver Return to Receiving

Accrue on Receipt is Set to 'Yes'

Debit: AP Accrual Account Credit: Supplier Liability Account

Debit: Supplier Liability Account Credit: AP Accrual Account

PO Matched Invoices/Period End Accrual PO Matched Invoices/Period End Accrual

Payment Cancellation Debit Memo Debit Memo - RTS

Sales Order Shipment

Refund Sales Order Pick Release Shipment

AR Invoice Accounting AR Invoice Cancellation Application Reversal

Distribution Payment to Tax Authority

Service Tax to CENVAT

6.2 SERVICE TAX ACCOUTING PROCESS

7. SERVICE TAX DISTRIBUTION

To Org Inventory Organization Inventory Organization Inventory Organization Inventory Organization

Comments Handled Handled Handled Handled

8. SERVICE TAX MANUAL ENTRY

9. SERVICE TAX SETTLEMENT

10.1 India Service tax report

10.2 India Service tax Credit register report

10.3 India Service tax Pending Liability Report

10.4 India Service tax pending recovery report

10.5 India Service tax ST3 report

11. DIAGNOSTIC SCRIPTS

11.1 Interpreting PO-AP Diagnostic Scripts

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