Clear Invoices Against Down Payments 

Use

If you withhold tax on a vendor down payment, and the vendor then sends you an invoice, you have to clear the withholding tax when you have entered the invoice (not when you pay the invoice, as is customary in other countries).

Features

This function has been incorporated into the standard function for clearing down payments (see Clearing). When you clear an invoice against a down payment for an Indian company code, the system clears the withholding tax automatically, if the company code is located in India.

Activities

Customizing

In order for the tax to be cleared correctly, you must post the down payments using:

·        A withholding tax type that is marked as Central Inv. Prop. (Central invoice proportionate)

·        A withholding tax code that uses the posting indicator 1 (Standard posting: bank/vendor/customer line item reduced)

If you use either of the other two methods, the adjustment will be made against the offsetting account instead of the vendor account.

Day-to-Day Activities

Make sure that the withholding tax codes you use when you enter the down payment and the invoice are assigned to the same withholding tax key, otherwise the clearing program will not let you clear them.

Once you have posted the vendor invoice, clear the down payment against it. To access the function, on the SAP Easy Access screen, choose Accounting ® Financial Accounting ® Accounts Payable ® Document Entry ® Down Payment ® Clearing.