Extended Withholding Tax ( Minimum/maximum Base Amount ) - with accumulati

Question

We are facing problem in posting of vendor Invoice. Actually we have implemented Minimum base amount ( Rs. 75000/- ) at withholding tax type level and accumulation at per year  in withholding tax type A1 ( for testing purpose ) and assign the same to a vendor.  We have booked some invoices up to RS. 75000/- system working fine, no WHT is deducted. But now we have received a another Invoice Rs. 5000/- and at the time of booking of invoice system giving an error message
I have changed the error message to warning but itu2019s again showing the same error message.
Actually the problem is system calculate the WHT from the beginning of the year to till date and the amount of Vendor invoice is less the than the amount of WHT but itu2019s legal requirement and we have to post the financial entry as mentioned below
Fictitious figures
Vendor Account           Dr.           Rs,       1500.00     ( Debit instead of credit )
Expense Account            Dr.           Rs.      5000.00     ( Actual exp. Of Invoice )
WHT Payable Account            Cr.           Rs.      6500.00     ( Total WHT from the beginning
Please provide the any.
SAP reply
Dear Customer,
We understand your requirement. But the standard SAP system does not support a scenario where an invoice amount in lower than the tax amount.
This is not a localization specific requirement. The accumulation logic is a generic system behaviour and all countries use it. We cannot make any change in the standard in this regard and change the current system behaviour.
Option to handle this in the system
The only way this can be handled in the system is once the accumulation limit has been reached, use a separate tax type tax code with out accumulations.
Though this is not the ideal solution, this is the best possible solution for your requirement.
Accumulation is not localized for India and the standard solution vailable for all the countries is used by Indian customers too.
SAP is currently not looking at any enhancements to this feature.
Other than the option mentioned above, there is no other way of handling this in the system.
Best Regards,
Soumya
If any one have any otehr solution please inform us.

Answer 1

This cannot be possible for two reasons.
1.  If you are not able to recover the amount from the Vendor, you'll have to bear it yourself which is a loss to the company.
2.  Even if such a process is provided, you cannot alter the previous invoices and your EWT amount does not correspond to the invoice you account for.  SAP works in an assumption that Tax will be calculated as a % of base price and cannot exceed it.
The only way to mitigate this is to decide whether a Vendor would require this exemption to be declared based on past experience and past amount of transactions in the beginning itself.  If it is unlikely, better do not declare the accumulation limit for them.  This will save you from incurring loss and reducing the risk for the company.  Start deducting right from the beginning.
If you are not sure, instead of giving accumulation, you can declare exemption upto 75000.  In this case, SAP cannot check whether the Vendor has crossed the limit or not.  You'll have to manually check and pass a Debit note to that extent when he exceeds the limit.  Again, this does not evade the risk of loss for the company.  Also, you cannot do TDS post processing for this amount (like TDS Remittance challan, TDS Certificate etc).
So, in my opinion, try and decide if the Vendor would require accumulation right in the beginning itself.  Even if not able to decide, you can still deduct the tax and issue a TDS certificate, which the Vendor can claim refund based on his transactions with you from the Income Tax in case he does not exceed the limit.  This will limit the risk of loss for the company.
Ravi.