| # Overview of entry tax This functionality is specific for India. Entry tax is levied on transportation of goods from one state to another. Entry tax is applicable only when goods are brought into the state for the purpose of consumption. Entry tax rates for the goods notified in the States Entry tax Act are maintained for each state. The person who purchases the goods or who owns the goods at the time of entry into the state is liable to pay the entry tax, periodically. Entry tax is determined by the tax authorities at the time of entry of goods into the state. The tax is calculated as the specified percentage of the purchase value of goods (total invoice amount inclusive of all the taxes) minus the Central Sales Tax amount paid. Entry tax is not levied when the Central Sales Tax paid is higher than the entry tax. You can avail an input credit on the entry tax paid. Note Entry tax is not applicable for the goods brought into the state for re-sale. To set up and process entry tax For transactions on which the entry tax applies, you must define a singular tax code for the entry tax. The purchase order or sales invoice does not contain the entry tax details. Therefore, a cost invoice is created for the entry tax paid. Define the Commercial Taxes Department as a business partner in the Buy-from Business Partners (tccom4120s000) session. The Commercial Taxes Department is not defined as a Collection Office. Create a tax code for the entry tax in the Tax Codes by Country (tcmcs0136s000) session and set the Tax Type to Shifted. Approve the tax code in the Tax Codes by Country (tcmcs0136s000) session. Create a cost invoice in the Purchase Invoices (tfacp1110s000) session, with value in the Amount field set to 0 for the actual tax base amount. In the Tax Country/Code field, select the entry tax code. In the Tax Amount in Payment Currency field, enter the entry tax amount. The claimable entry tax amount is added to the VAT (purchase) pool. |