Withholding tax on vendor advance

Question

hi gurus,
we are facing one major problem, our company manufacturing cement. presently now our plant expansion work going on(WIP).
in this scenario we are facing TDS on Vendor advance.
for vendors we are issue the materials in lieu of Cash/Chq payment as a advance.
how to calculate the TDS on this scenario in SAP.
manually we are follow like this
for material issue
vendor a/c Dr  1000
  To Material A/c  1000
for TDS
Vendor a/c Dr 23
   to TDS a/c 23
this is the procedure to follow the JV preparation.
how to solve this problem in SAP.
thanks in advance.
p.seshaiah

Answer 1

Hi,
Firstly you have to maintain the cofiguration for withholding tax
Kindly configure the TDS under mentioned path.
1. SPRO --> Financial Accounting (New) --> Financial Accounting Global Settings (New) --> Withholding Tax > Extended Withholding Tax>Calculation-->Withholding Tax Type
2. Similarly,for taxcodes follow the above path.----->Calculation--->Withholding Tax code
Here you can maintain your tax codes both at the time of making an advance as well as at the time of making an invoice.
These tax types alongwith the tax codes maintained will have to be maintained in the "Withholding Tax" tab in the Vendors Master. Please note you have to tick the checkbox "Liable"  for the relevant tax codes.
3. For generating Remittance challans,the following steps need to be followed:
    SPRO-FA-****-WHT-EWT-Postings-India-Remittance challans-Specify document type
         i) Maintain number groups
        ii) Maintain Number ranges
        iii) Assign number ranges to number groups
4. For generating Withholding TAx certificates ,the following steps need to be followed:
    SPRO-FA-****-WHT-EWT-Postings-India-Withholding tax certificates for customers and vendors
        i)  Maintain number groups
        ii) Maintain Number ranges
        iii) Assign number ranges to number groups
5.  For challan updation use T code J1INCHLN
6. For bank updation use T code J1INBANK
7. For certificate print use T code JINCERT
8. for re-print use T-code J1INREP
9. To view the report for MIS use T code J1INMIS
Regards
Sonali T