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title description author ms.author ms.topic ms.custom ms.date ms.reviewer ms.search.region ms.search.validFrom ms.dyn365.ops.version
Manual settlement of an advance payment and invoice that include tax
Learn about the tax entries that are generated in various scenarios when an invoice and a payment that include tax are settled.
epodkolzina
epodkolzina
conceptual
bap-template
07/01/2024
johnmichalak
India
2019-06-01
10.0.4

Manual settlement of an advance payment and invoice that include tax

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Tax is posted on both the advance payment and the sales invoice. When these transactions are settled on the Open transaction editing page, the double tax entry is reversed.

The following table shows the tax entries that are generated in various scenarios when an invoice and a payment that have tax are settled.

Transaction details Example Tax entries that are generated during settlement
Invoice = Payment

Invoice amount: 12,000.00

Payment amount: 12,000.00
  • Tax on the payment is reversed.
  • IGST interim payable account Cr. 2,000.00.
  • IGST payable account Dr. 2,000.00.
Invoice < Payment

Invoice amount: 6,000.00

Payment amount: 12,000.00
  • Tax on the payment is reversed to the extent of the invoice amount.
  • 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
  • Tax on the payment is reversed.
  • IGST interim payable account Cr. 2,000.00.
  • IGST payable account Dr. 2,000.00.

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