Reversal of Service Tax in India localisation


I am using NAV IN 4SP3. I am having some problems in reversing Service taxes that is posted into the system.

When an invoice is created, and payment received… the system will record Service Taxes. This indicates Tax that is required by the company to pay to the Indian government. The problem here is that, when the “standard” unapply or reversal function is used, the service tax entries created, are not reversed.

Is there another work around on how Service taxes is reversed? Even by means of journal…? So far, I cannot find anyway this can be done in the system. Maybe some Indian localisation users can point me in the right direction…

I am currently trying to get hold of NAV IN 5 to see if this problem is addressed in later versions.


The payment of the service tax to the government is dependent on the payment of the invoice. At the time of booking of invoice the service tax liability is posted in Interim account and on payment it is transferred to Actual Liability account. If the invoice is unapplied the entry of transfer will automatically reversed. Again on re-application of invoice with payment the transfer entry will be recreated.