Incorrect Tax Accounting When the Conversion Rate Is Different at Base and India Tax Details in Case of Domestic Tariff Area (DTA) Exports Case
(Doc ID 3075599.1)
Last updated on MARCH 11, 2025
Applies to:
Oracle Financials for India - Version 12.2 and laterInformation in this document applies to any platform.
Symptoms
When the base conversion rate and tax conversion rate are different for a Account Receivables (AR) transaction (Manual AR, Projects AR, Sales Order AR) then tax accounting is getting generated based on base conversion rate where as it is expected to be accounted based on tax conversion rate.
Note : when a SEZ supplies goods or services or both to a Domestic Tariff Area (DTA), this will be considered as an export to DTA (which is exempt for the SEZ) and customs duties and other Import duties will be payable by the person receiving these supplies in DTA.
For example, When goods manufactured in India and bill to party is in other countries and ship to third party site within India.
The issue can be reproduced at will with the following steps :
1. Navigate to India Local Receivables --> Transactions --> Transactions.
2. Create a transaction in USD currency. Make sure Bill to customer site is in US and Ship to customer site is in India.
3. Go to tools --> Exchange rate. Provide conversion rate A at the base transaction workbench.
4. Now go to tools --> India Tax Details --> Apply GST taxes manually or via GST defaulting mechanism.
5. Once Taxes are applied, go to Tax lines and provide conversion rate B at the Tax conversion rate field, click apply and save.
5. Complete the transaction and run create accounting.
6. Observe that tax accounting and distributions are getting generated based on base conversion rate A instead of tax conversion rate B.
Cause
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In this Document
| Symptoms |
| Cause |
| Solution |
| References |