Amount in interim account is remains unmoved when making payment to vendor

(0) Share

Report

Posted on by Chetan Dedhia

An invoice received from a vendor for services obtained from the vendor. The amount of Tax was posted in an interim payable account. When the payment is done to vendor, the tax amount is still in interim account.

All responses (3)

Answers (0)

Chetan Dedhia 71 on at

Like (0)

Report

RE: Amount in interim account is remains unmoved when making payment to vendor

1. India

2. Yes

4. No, but it moves from interim to payable/receivable account.
Ludwig Reinhard Microsoft Employee on at

Like (0)

Report

RE: Amount in interim account is remains unmoved when making payment to vendor

Hi Chetan Dedhia,

Can you let us know a couple of additional things, such as

* for which country/region did you setup the tax?

* why is it that the interim tax payable and recoverable accounts are posted here? Is this a kind of reverse charge transaction?

* how is the sales tax code setup? Can you share a screenprint of that?

* why is it that the tax should be changed/posted again with the payment made? Is this a kind of prepayment tax scenario?

Best regards,

Ludwig
Chetan Dedhia 71 on at

Like (0)

Report

RE: Amount in interim account is remains unmoved when making payment to vendor

When the Vendor Invoice is booked, entries look like

Services a/c - 10000 Dr

Interim Tax Payable a/c - 1200 Cr

Interim Tax Recoverable a/c - 1200 Dr

Withhold tax - 200 Cr

Vendor A/c - 9800 Cr

When the payment is made to vendor, entries look like

Vendor a/c 9800 Dr

Bank a/c 9800 Cr

Interim account continues to show 1200 balance instead of zero