Service Tax on GTA (Goods Transport Agencies) –

Inbound (Purchases) & Outbound Delivery (Sales)

1st Step: Create 6 GL account for GTA Service Tax.

Setting needs to be done in Extended Withholding Tax

2nd Step: Check Withholding Tax Countries
Mane Path: IMG > Financial Accounting (New) > Financial Accounting Global
Setting (New) > Withholding Tax > Extended Withholding Tax > Basic Setting >
Check Withholding Tax Countries:

3rd Step: Define Withholding Tax Keys:

Manu Path: IMG > Financial Accounting (New) > Financial Accounting Global
Setting (New) > Withholding Tax > Extended Withholding Tax > Basic Setting >
Define Withholding Tax Keys:
4th Step: Define Withholding Tax Type for Invoice Posting:
Manu Path: IMG > Financial Accounting (New) > Financial Accounting Global
Setting (New) > Withholding Tax > Extended Withholding Tax > Calculation >
Withholding Tax Type > Define Withholding Tax Type for Invoice Posting:

5th Step: Define Withholding Tax Codes:

Manu Path: IMG > Financial Accounting (New) > Financial Accounting Global
Setting (New) > Withholding Tax > Extended Withholding Tax > Calculation >
Withholding Tax Code > Define Withholding Tax Codes:
6th Step: Assign Withholding Tax Types to Company Codes:
Manu Path: IMG > Financial Accounting (New) > Financial Accounting Global
Setting (New) > Withholding Tax > Extended Withholding Tax > Company Code >
Assign Withholding Tax Types to Company Codes:
7th Step: Activate Extended Withholding Tax:
Manu Path: IMG > Financial Accounting (New) > Financial Accounting Global
Setting (New) > Withholding Tax > Extended Withholding Tax > Company Code >
Activate Extended Withholding Tax:

8th Step: Define Withholding Tax to be Paid Over:

Manu Path: IMG > Financial Accounting (New) > Financial Accounting Global
Setting (New) > Withholding Tax > Extended Withholding Tax > Posting > Accounts
for Withholding Tax > : Define Withholding Tax to be Paid Over:

Assign the Input & Output Service Tax Payable Account GTA for Basic, Ecess and
SEcess

9th Step: Define Accounts for Withholding Tax Offsetting Entry:

Manu Path: IMG > Financial Accounting (New) > Financial Accounting Global
Setting (New) > Withholding Tax > Extended Withholding Tax > Posting > Accounts
for Withholding Tax > Define Accounts for Withholding Tax Offsetting Entry:

Assign Input Service Tax Cr. – Inbound Delivery and Service Tax Expense –
Outbound Delivery Accounts for Basic, Ecess and SEcess

10th Step: Maintain Withholding Tax information in Vendor Master:

11th Step: Create an Expense GL for Inbound GTA services – Transport/Freight
Charges:

Front End Execution Process:

Inbound Delivery Invoice Posting: FB60

We can utilize Input Service Tax (Basic, Ecess and SEcess) on Inbound Freight
Expenses for Cenvat Liability but for Outbound Delivery Freight Input Service Tax
utilization is not possible so we charge to expenses.

Outbound Delivery Invoice Posting: FB60