Define Accounts for Tax Clearing

Dear all,
I have to Define Accounts for Tax Clearing but I don't understand business that use this account
Please give me a example about business that use this account
Thanks so much
Minhtb

Hi,
I would like to explain it with an examble (it is in India),
We have a tax element called Excise Duty which will be levied on all material sales.  In india, there is a option to utilise the purchase related Excise Duties against the Excise duty payable on sales.  For utilising this, we have to maintain all excise related records.  To ensure the accounting of purchase related duties, companies are puting a control that the invoice verification (MIRO) can be done only if the incoming duty is
accounted.
At this place tax clearing accounts are used.  Here at the time of accounting duty the tax clearing account will be credited and at the time of MIRO the tax clearing account will be debited.  Hence, the balance is Zero.
Examble,
Procurement cycle,
1. Goods receipts (MIGO)
Dr. Inventory a/c
Cr. GR/IR Account
2. Excise duty (J1IEX)
Dr. Duty Input a/c
Cr. Tax clearing account
3. Invoice verification (MIRO)
Dr. GR/IR  a/c
Dr. Tax clearing a/c
Cr. Vendor a/c
There is an another chance of creating a liability at the time of transaction will hit a tax clearing account and at the time of payment it will clear the tax account.
Hope it clears your doubt
Regards
A.Saravanan

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