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06 - 04 - Tax Related Interview Discussions - mp4-1

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Ashraf Ashh
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11 views

06 - 04 - Tax Related Interview Discussions - mp4-1

Uploaded by

Ashraf Ashh
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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As-is – Current Business Process

To Be- How the business process will be in SAP

Subcontracting:
We give components to vendor
Vendor will send the finished goods which are
prepared with those components
Asset ------ Expense

2 Crores – 2015-16
1.5 Crore as Expenses
0.5 Crore as Assets

Input Taxes – We pay during buying the materials


Excise Duty: It will be paid by the manufacturing
companies (excise registered) for the excisable
materials to the government.
CIN handles this area. This will be in only India and also
mainly in Manufacturing/Process Industries
Valu Added Tax (VAT): We pay VAT for maximum
materials which we buy. The percentage of the VAT
depends on the type of materials. It will be taken by
the State Government
Central Sales Tax (CST): Whenever we buy the
materials from other states, we have to pay the CST on
those materials to the Government. It will be taken by
the Central Government
Ex: 2% VAT+ 5% CST
Service Tax: Service tax will be paid whenver we take
services from the vendor or any other partner.

Dedutable or Refundable Tax:


Ex: Material Cost 100 INR
Deductable Tax 20 INR
During Accounting entries:
Material Account 100+
Input Tax account 20+
Non Deductable or Non Refundable Tax:
Ex: Material Cost 100 INR
Non-Deductable Tax 20 INR
During Accounting entries:
Material Account 120+
Direct Tax: The tax which is directly paid to the
Government by the Tax Payer.
Ex: Income Tax, Corporation Tax, Wealth Tax etc
Indirect Tax: It will be applied on the manufacture or
sale of goods and services.
Ex: Sales Tax, Service Tax, Excise Duty
Import Procurement:
1. Create Purchase Order to the Foreign Vendor
2. Pay the Customs duty to the Custom vendor
3. Receive the Goods from the Foreign vendor
4. Pay the Goods amount to Foreign vendor and any
local transportation charges to Transportation
vendor

Foreign Vendor – Who provides materials?


Custom Vendor – Who takes custom duty?
Local transport Vendor: Who takes the goods from
Port to company

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