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Dynamics 365 Community / Forums / Small and medium business | Business Central, N... / Query on Booking Other...
Small and medium business | Business Central, N...
Suggested Answer

Query on Booking Other Income via Purchase Credit Memo with GST & TDS

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Posted on by Jainam M. Kothari 16,300 Super User 2026 Season 1
Hello,
 
In Business Central (India localization), can a Purchase Credit Memo be used to post Other Income against a vendor, and how does the system handle GST and TDS implications in this case?
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Dynamics 365 Business Central
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  • Suggested answer
    Pallavi Phade Profile Picture
    Pallavi Phade 5,558 Super User 2026 Season 1 on at
     
    TDS is not considered in Purchase Credit memo as TDS is impacted in GL and it does not get consdired in Payables account . SO when you reverse a purhase invoice using credit memo , To reverse TDS effect you need to pass TDS Journal and get it adjusted against invoice 
     
    For GST , it will reverse accordingly as deducted in invoice . 
     
    If you can share an example then we can think how it can he handled with exact cost implicaiton
     
     
    Warm Regards
    Pallavi Phade
    www.linkedin.com/in/pallaviphade131116
  • Suggested answer
    Jainam M. Kothari Profile Picture
    Jainam M. Kothari 16,300 Super User 2026 Season 1 on at
    Namaste @Pallavi Phade,
     
    Thank you for your prompt response.

    This situation is not related to returning purchased materials.

    In this case, we purchase materials from the vendor, and we also provide lifting services to them. Therefore, the lifting service is considered as our other income.

    Accordingly, we have identified a solution: we will create a new customer for the vendor and generate a sales invoice to account for this other income.

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