Procurement of services without Purchase order(related to GST)

This process is related to passing of invoices in the Finance module where the Material Management department is not involved. Invoices that will be routed through FI include insurance and other miscellaneous services.

·         These invoices will be passed through the T-code F-43 or FB60.

·         The Finance department will verify the document and update the Payables a/c that is, creating a liability. Finance will process the payment through the automatic payment program.

·         In GST regime, while booking such expenses where PO is not created, depending on the type of expenses, SAC / HSN code should be given in the input screen. For every transaction business place has to be captured, apart from business place below objects should also be captured in input screen.

Ø  GST Partner: Vendor code with whom purchase transaction is made. This is required to capture the vendor GSTIN.

Ø  Place of Supply: This is the place where actual supply of service is taken place.

Ø  Tax Code: This is required to calculate tax automatically and post into relevant GL accounts.

Ø  All the above fields will be made mandatory in FB 60 transaction code.

 

Flow of Entries:

 

Accounting entry in case of Intrastate:

 

CGST Input A/c   Dr

Expense A/c           Dr

SGST Input A/c                  Cr

 Vendor A/C                                      Cr 

  

Accounting entry in case of Interstate:

 

IGST Input Credit                              Dr

Expense A/c                                       Dr

Vendor A/c                                        Cr