Payment of invoices that include tax

Follow these steps to post an invoice that includes sales tax.

1. Go to Accounts receivable > Payments > Payment journal.
2. Create a record.
3. In the Name field, select a value.
4. On the Setup tab, select the Amounts include sales tax check box.
5. Select Lines.
6. Create a customer advance payment journal.
7. Select Functions > Settlement.
8. In the Invoice field, select a value.
9. Close the page.
10. Save the record.
11. Select Post > Post.
12. Close the message that you receive.

Validate financial entries

Validate the financial entries by selecting Inquiries > Voucher.

The following table shows the tax entries that are generated when an invoice payment is made in various scenarios.

Transaction details	Example	Tax entries that are generated during settlement
Invoice = Payment	Invoice amount: 12,000.00 Payment amount: 12,000.00	No tax entries are generated.
Invoice < Payment	Invoice amount: 6,000.00 Payment amount: 12,000.00 Note that if either a Harmonized System of Nomenclature (HSN) code or a Services Accounting Code (SAC) is defined for the journal, tax is calculated and posted on the journal amount.	Tax is calculated and posted on the payment amount. Tax on the payment is reversed to the extent of the invoice amount in the related voucher. IGST interim payable account Dr. 2,000.00. IGST payable account Cr. 2,000.00. Related voucher IGST interim payable account Cr. 1,000.00 IGST payable account Dr. 1,000.00
Invoice > Payment	Invoice amount: 24,000.00 Payment amount: 12,000.00 without tax	No tax entries are generated.

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