Excise Duty

This federal tax is assessed on goods that are produced or manufactured and intended for consumption in India. Excise tax is an indirect tax that the manufacturer passes on to the consumer. The liability for the tax occurs when the goods are manufactured; however, the tax is not accounted for until the goods are shipped.

Customers pay the excise tax or duty when they purchase a product. A tariff act specifies which products are assessed excise tax.

See (IND) Understanding Excise Tax.

Service Tax

This federal tax is assessed on services that are provided. Service tax is an indirect federal tax that the service provider passes on to the customer. The service provider is responsible for issuing invoices and charging service taxes to customers.

See (IND) Understanding Service Tax.

Value-added tax (VAT)

This state tax is assessed on the value added to products and goods at different stages of production and distribution. The value added is the difference between the sales price and the purchase price. The state defines the tax rate percentage for a product or item. Some items are exempted from VAT.

VAT applies when a product is shipped to a customer whose receiving location is within the same state. When products within a company are transferred to another location that is in a different state, a retention percentage is retained.

See (IND) Understanding VAT.

Sales Tax

This state tax is assessed on the sale of goods and services. The tax rate percentage depends on the goods and their classification and whether the transaction is conducted within the state (intrastate trade) or outside the state (interstate trade).

See (IND) Understanding Sales Tax.

Purchase Tax

This state tax is assessed on the purchase of goods. The buyer pays the tax for goods that are purchased from the dealer, and the dealer remits the collected tax to the tax authorities.

See (IND) Understanding Purchase Tax.

Tax collected at source (TCS)

This federal tax is assessed on goods that are purchased by customers. The supplier charges the tax to the customer and remits the amount to the tax authorities.

See (IND) Understanding TCS.

Tax deducted at source (TDS) and Works contract tax (WCT)

TDS is a tax that is deducted from income that a company in India pays to a recipient or supplier if the income amount exceeds a specific statutory limit in a financial year. Income might include salary, interest and dividends, payments to contractors and subcontractors, and so on.

WCT is a tax that is assessed on contracts for labor, work, or services. Contracts for work include construction, manufacturing, repair, and so on. This tax is not based on the sale of goods.

See (IND) Understanding TDS and WCT.

User-defined codes (UDCs)

Set up base-software UDCs with India-specific values, and set up India-specific UDCs for:

• Legal documents

• Tax processing

See Setting Up UDCs for India.

Next numbers

Set up next numbering schemes for the base software applications that you use, and set up a next numbering scheme to number tax deducted at source (TDS) certificates.

See Setting Up India-Specific Next Numbers.

Automatic accounting instructions (AAIs)

You must set up some base software AAIs before you work with service tax and tax deducted at source (TDS).

See Setting Up AAIs for India.

Legal documents

Before you can print invoices, vouchers, and other legal documents, you must set up your system by setting up:

• Legal document types and relationships.

• Issue places.

• Next numbers.

• Print templates.

See (IND) Setting Up Legal Documents for Tax and Export Invoices.

Landed costs

Some tax regimes use landed costs to calculate Indian taxes.

See (IND) Calculating Taxes for India Based on Landed Costs.

Advanced pricing

Some tax regimes use the Advanced Pricing module in the JD Edwards EnterpriseOne software to calculate the taxes. You define the tax calculations for India using the JD Edwards EnterpriseOne Advanced Pricing system, then use an India-specific program to define price adjustments.

See (IND) Setting Up the System for Advanced Pricing for India Taxes.

See Entering Details for Price Adjustments.

Tax types and tax regimes

Set up relationships between tax types and tax regimes, and then set up price adjustments and level costs for the tax type/tax regime combination.

See Assigning Tax Types to Tax Regimes.

See Setting Up Level Costs for Combinations of Tax Types and Tax Regimes.

Address book records

Set up tax registration details for companies, customers, and suppliers.

See Setting Up Tax Registration Details.

Invoice processing

After you set up legal documents, you can process invoices in India.

See (IND) Processing Tax and Export Invoices.

Excise taxes

Set up your system to process excise tax, including the setup of:

• Excise units

• Excise periods

• Excise accounts

• Opening balances

• Chapter numbers and descriptions

See (IND) Setting Up the System for Excise Tax.

The JD Edwards EnterpriseOne system for India localization provides programs to enable you to process excise taxes including:

• Excise tax for 100 percent export-oriented units.

  See (IND) Working with Excise Tax for 100 Percent Export-Oriented Units.

• Excise-exempt consignments.

  See (IND) Processing Excise-Exempt Consignments.

• Excise registers.

  See (IND) Working with Excise Registers.

• Cenvat credit.

  See (IND) Working with Cenvat Credit.

Service tax

To set up your system to process service tax, map business units to service tax operating units.

See Mapping Business Units to Service Tax Operating Units.

To process with service tax:

• Generate reclassification journal entries for service tax payments.

  See Generating Reclassification Journal Entries for Service Tax Payments.

• Generate reclassification journal entries for service tax receipts.

  See Generating Reclassification Journal Entries for Service Tax Receipts.

• Update service tax balance information.

  See Updating Service Tax Balance Information.

• Generate payments to the Transportation Agency.

  See Paying the Transportation Agency.

Value-added tax (VAT)

Before you process VAT in India:

• Assign VAT category codes to item numbers.

  See Assigning VAT Category Codes to Item Numbers.

• Map business units to states.

  See Mapping Business Units to States.

• Set up general ledger accounts for VAT and CST transactions.

  See Setting Up General Ledger Accounts for VAT and CST Transactions.

• Set up retention percentages and deferred periods.

  See Setting Up Retention Percentage and Deferred Periods for State-Level Constants.

• Enter opening stock adjustment amounts for VAT credit.

  See Entering Opening Stock Adjustment Amounts for VAT Credit.

Sales tax

To work with sales tax in India:

• Enter form details for invoices and vouchers.

• Calculate offset amounts.

• Calculate VAT offset amounts.

• Associate stock transfers to purchase orders.

See (IND) Entering Form Details for Sales Tax and Purchase Tax Concession.

See (IND) Working with Transactions for Sales Tax.

Purchase tax

To work with purchase tax in India:

• Assign form types to vouchers.

• Enter form details for vouchers.

• Print the list of items used for personal consumption.

• Update purchase orders and purchase taxes.

• Enter direct expenses.

See (IND) Working with Transactions for Purchase Tax.

Tax collected at source (TCS)

To work with TCS:

• Calculate TCS for prepayments.

• Enter TCS payment details.

• Update the TCS register.

See (IND) Working with TCS Prepayments and Payments.

TDS and work-contract tax (WCT)

Before you process TDS and WCT:

• Set up suppliers and assign tax types to suppliers.

• Enter TDS and WCT rates and rate concessions.

• Enter TDS document company information.

See (IND) Setting Up the System for TDS and WCT.

To work with TDS and WCT:

• Calculate TDS on prepayments, expense accounts, and receipts.

  See (IND) Calculating TDS.

• Work with vouchers with TDS and WCT.

  See (IND) Working with Vouchers for TDS and WCT.