To set up service tax

This functionality is specific for India.

You must obtain a service tax registration number, set up tax codes for service tax, and define a collection office for service tax in every state in which you create invoices for delivered services.

This means that if you use central billing for services, you only need to do this in the state of the billing office's address. If you do not use central billing for services, you must register for service tax, set up separate tax codes, and define a separate collection office for service Tax, in every state in which you create invoices for delivered services.

To set up service tax, take the following steps:

  1. In the Registration Numbers By Financial Company (tctax9140m00l) session, define the Service Tax registration numbers of your company. For details, refer to To set up tax registration numbers for your own company.
  2. In the Registration Numbers by Business Partner (tctax4100m000) session, define the Service Tax registration numbers of your business partners.
  3. In the Invoice Series by Registration Number (cisli1501m000) session, define sequential numbering of the Service invoices as described in Sequential invoice numbering by (own) tax registration number.

  4. Define tax codes and tax rates as described in To set up tax registration. You must set up a separate tax code for every state in which you deliver services. In the Tax Codes by Country (tcmcs0136s000) session, among other details, enter the following data:

    • In the Kind of Tax field, select VAT.
    • In the Rounding Method field, select Normal.
  5. In the Tax Handling (tctax0138m000) session, select the default Service Tax code for the state in the Domestic Service field. The other Service Tax fields are not relevant.
  6. In Posting Data for Tax Codes (tfgld0171s000) session, define the tax ledger accounts and dimensions, to which LN must post the tax amounts.
  7. In the Tax Positions (tfgld0120m000) session, specify the box number of the tax declaration form with service tax as description. For details, refer to Setting up a tax declaration.
  8. For purchase invoices for services to which Tax Deducted at Source also applies, you must set up a group tax code. The group tax code must contain the Service tax code and the Tax Deducted at Source or Withholding Tax code. For details, refer to To set up a group tax code.

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