How to: Calculate and Apply Service Tax on Advance Payments
You can track advance payments received from customers and the related service tax amount. To calculate and apply service tax on advance payments, you must first set up the service tax. For more information, see How to: Set Up Service Tax.
You can calculate the service tax on advance payment for customers, vendors, and vouchers. The following procedure describes how to calculate the service tax on advance payment for customers and vendors, but the same steps also apply to cash receipt vouchers, cash payment vouchers, bank receipt vouchers, and bank payment vouchers.
To calculate service tax on advance payment using general journals
In the Search box, enter General Journals, and then choose the related link.
Fill in the required fields as described in the following table.
Field Description Batch Name
The general journal batch name.
Posting Date
The posting date for the general journal.
Document Type
Specify Payment to indicate that the document type is payment.
Account Type
The account type.
Amount
The total amount, including VAT.
Bal. Account Type
Specify G/L Account to indicate that the balancing account type is general journal account.
Bal. Account No.
The balancing account number for the general ledger.
Service Tax Group Code
The service tax group code.
Service Tax Registration No.
The service tax registration number.
Serv. Tax on Advance Payment
Select to specify that service tax has been paid in advance.
On the Actions tab, in the Posting group, choose Post.
Choose the OK button.
You can apply service tax on advance payment for both sales orders and purchase orders. The following procedure describes how to apply advance payment for sales orders, but the same steps also apply to purchase orders.
To apply advance payment for sales orders
In the Search box, enter Sales Orders, and then choose the related link.
Select the required sales order, and on the Home tab, in the Manage group, choose Edit.
On the General FastTab, fill in the fields as described in the following table.
Field Description No.
The sales order number.
Sell-to Customer No.
The number for the customer to whom the invoiced items are to be shipped.
Structure
The service tax structure.
External Document No.
The external document number that refers to the customer's numbering system.
On the Lines FastTab, fill in the fields as described in the following table.
Field Description Type
Specify G/L Account to indicate that the order line is for a general ledger account.
No.
The general ledger account number.
Quantity
The number of units.
Unit Price Excl. VAT
The unit cost of the line item. The amount that you enter in this field is populated in the Line Amount Excl. VAT field.
On the Invoicing FastTab, fill in the fields as described in the following table.
Field Description Applies-to Doc. Type
Specify Payment to indicate that the journal line will be applied to a service tax payment that has already been posted.
Applies-to Doc. No.
The document number to which the service tax payment is applied.
On the Shipping FastTab, in the Location Code field, select the location code for the customer.
On the Actions tab, in the Functions group, choose the Calculate Structure Values button.
On the Actions tab, in the Posting, choose Post.
In the dialog box, select one of the following options:
Ship
Invoice
Ship and Invoice
Choose the OK button.
See Also
Tasks
How to: Set Up Service Tax
How to: Apply Service Tax Entries
Reference
Cash Payment Voucher
Bank Receipt Voucher
Bank Payment Voucher
Concepts
Service Tax Overview
Service Tax Entries for Invoices with Normal and Advance Payments
Other Resources
Sales Header Table
Gen. Journal Line Table
Cash Receipt Voucher Window