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Wrong Amounts Got Transferred To Recovery Account (Doc ID 2236754.1)

Last updated on FEBRUARY 28, 2018

Applies to:

Oracle Financials for India - Version 12.2.5 and later
Information in this document applies to any platform.

Symptoms

On : 12.2.5 version, Service Tax - P2P

ACTUAL BEHAVIOR
---------------

In case of AP invoices having India Localization Taxes attached at Invoice Line Level.

The 100% Recoverable service tax amount which got debited to Interim Recovery Account did not get transferred to Recovery Account.

Also, the Swachh Bharat Cess which is non recoverable tax(debited to expense account) got wrongly transferred to Recovery Account.


EXPECTED BEHAVIOR
-----------------------
Recoverable taxes should be accounted from Interim Recovery to Recovery
NR taxes should be transferred to expense account

STEPS
-----------------------
Invoice Amt - 100
Serv Tax - 14 (100% Recoverable)
SB Cess - 0.5 (Non Recoverable)
KKC - 0.5 (100% Recoverable)

SB Cess which should be expensed but got transferred to Recovery Account post ISP run
and Service Tax which should be transferred to Recovery Account did not get transferred.

Accounting Entry that got generated after AP invoice booking:

Invoice Expense DR-----114.5 (100+14+0.5)
SB Cess (Expense) DR---0.5
  To Supplier Control 100
  To Interim Recovery 14.5


Accounting entry post ISP run for service tax transfer:

Interim Recovery DR----1
  To Recovery 1


BUSINESS IMPACT
-----------------------
The issue has the following business impact:
Accounting issue

Cause

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