(IND) Understanding Purchase Tax

This chapter provides overviews of:

Purchase tax.
Process flow for purchase tax.
Software solution for purchase tax.
Setup requirements for purchase tax.

Overview of Purchase Tax

Purchase tax is the tax levied by the state government on the purchase of goods. The buyer pays the tax for the goods that are procured from the dealer. The dealer remits the collected tax to the tax authorities.

The purchase tax is applied to a wide range of goods. A voucher is created and includes the details about the goods sold, as well as the price and tax. The vouchers are posted for the tax calculation.

To claim a purchase tax exemption, vouchers are attached with concession forms. The forms show the voucher details for claiming the tax exemption. The landed cost component enables the calculation of the purchase tax for the voucher. The purchase tax is updated when the appropriate landed cost rule is associated with the voucher.

Process Flow for Purchase Tax

This process flow shows the steps in the purchase tax process:

Purchase tax process flow

Software Solution for Purchase Tax

To meet the purchase tax requirements specified by the tax authorities, the JD Edwards EnterpriseOne programs enable you to:

Update the purchase tax details in the voucher for a supplier.
Enter and revise voucher and purchase tax details in the forms used to claim tax exemptions.
Generate purchase tax reports for the vouchers submitted.
Print a list of vouchers with pending forms.
Generate a list of vouchers reversed.

Setup Requirements for Purchase Tax

This table lists the purchase tax requirements for India:

Setup Requirements	Cross-Reference
Assign tax types to tax regimes.	See Assigning Tax Types to Tax Regimes.
Define tax registration details.	See Setting Up Tax Registration Details.