TDS at the time of MIGO

Question

Hi all
In our situation, we have some vendors who are both material as well as service providers.Our client wants to have the functionality of deducting/specifying the tax codes for EWT at the time of MIGO itself and not at MIRO since the person doing MIRO might make a mistake regarding TDS. Is there any way we can handle the situation or do we have to create two codes for all such vendors. We are working on ECC 6.0.(India, CIN Version)

Answer 1

I agree with Kapil Malde
Income tax provisions are very clear on the issue that the TDS to be deducted when expense is booked and credit account could be a clearing account(instead of a vendor account).Hence TDS to be deducted on MIGO and not MIRO.
     Also at the time of MIGO the Purchase order details are available in the system hence vendor name is already available in system hence technically TDS can be deducted at the time of MIGO Itself.
                  (As a side note I would like to mention the SAP Logic of not providing the facility of TDS deduction at MIGO stage is that as a standard procedure MIGO and MIRO should be done on the same day, hence it make no difference but in actual practice there is gap in migo and miro hence legality of transaction can be challenged by Taxation Authorities.)
In case there is change in tax rate then practice of deducting tax at MIRO stage would amount to over deduction of TDS or under deduction of tds during the period of GAP.