GST : Incorrect accounting for debit memo for recovery rate less than 100 %
(Doc ID 2638238.1)
Last updated on FEBRUARY 13, 2020
Applies to:Oracle Financials for India - Version 12.1.1 and later
Information in this document applies to any platform.
Incorrect accounting generated for debit memo for cases where recovery is NOT 100 %. ( claim percentage ).
To narrate with an example , let us consider a case where 50% claim is recoverable found that the non recoverable entry is equally getting posted to Interim recovery (adding to Input tax credit)
instead of expense account.
Steps for replication
1. Create a debit memo ( referring the parent standalone invoice via the tax invoice number reference).
2. Apply GST taxes which contain 50% recoverable as recovery rate.
3. Clam the standard invoice and the debit memo.
4. Account the debit memo.
Entries should be as
Supplier liability Debit
Interim Recovery Credit
On claim the entries for debit memo ( action = Recover)
Interim Recovery Debit
Tax Liability Credit
( above entries are for the recoverable portion )
5. As the tax contain non recoverable portion as well it should hit the expense account.
Where as non recoverable entries are hitting Interim recovery account as well.
Expects that the non recoverable portion should hit to the expense account and not to the interim recovery account.
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