SOP: Booking Vehicle Repair and Service Expenses in Finsys ERP

1. Purpose

This SOP explains the recommended method for recording vehicle-related repair and maintenance services—such as truck tyre alignment, wheel balancing, puncture repair, or similar garage services—in the Finsys ERP system.

Use this procedure when the bill is for a service only and no stock is received. Example Service of your Car, your Truck, your tempo.

2. Scope

This procedure applies to vehicle repair and maintenance services where:

– The expense relates to a company-owned, leased, or operational vehicle.
– No material or stock item is being received into the stores.
– Price history and inventory tracking are not required.
– The transaction does not require a Purchase Order, Material Receipt Report, or Quality Control inspection.
– GST is not charged or is not applicable, based on the supporting bill and the applicable tax position.

Examples include:

– Truck tyre alignment.
– Wheel balancing.
– Vehicle servicing.
– Minor vehicle repairs.
– Puncture repair.
– Emergency breakdown services.
– Garage inspection or adjustment services.

3. Important GST Clarification

A vehicle repair activity should be treated as a **service transaction**, not as a stock purchase.

The absence of GST should not be determined merely by looking for a “0% HSN code.” HSN codes generally relate to goods, while services are classified using the appropriate service classification. The GST treatment should be based on the nature of the service, the supplier’s invoice, the supplier’s registration status, and the applicable tax provisions.

Before booking the transaction, the user should verify:

– Whether GST has been charged on the supplier’s bill.
– Whether the supplier is registered under GST.
– Whether the service is taxable, exempt, non-taxable, or otherwise not liable to GST.
– Whether the transaction requires any reverse-charge or other tax treatment.

The Finsys entry should reflect the actual tax position supported by the bill and the client’s approved accounting policy.

4. Recommended Finsys ERP Transaction

Where there is no requirement for purchase, stores, or quality control processing, the transaction should be entered directly through a **Service Voucher**.

The transaction should not normally be entered through:

– Purchase Order.
– Material Receipt Report.
– Stock receipt.
– Quality Control process.
– Inventory inward entry.

This approach ensures that a service expense is recorded directly in the appropriate expense ledger without affecting stock balances or material price history.

5. Suggested Accounting Entry

The normal accounting entry may be recorded as follows:

“`text
Vehicle Repair and Maintenance Expense A/c Dr.
To Vendor A/c / Staff Imprest A/c
“`

For a direct payment from an approved imprest or petty cash account:

“`text
Vehicle Repair and Maintenance Expense A/c Dr.
To Imprest Account A/c
“`

The exact ledger used should depend on how the payment was made and how the client maintains its vendor and imprest accounting system.

Recommended Expense Ledger

A suitable ledger may be created as:

– Vehicle Repair and Maintenance Expense.
– Repair and Maintenance—Vehicles.
– Truck Repair and Service Charges.
– Vehicle Operating Expenses.

or you can use any other expense ledger that you and your company have been using for such expenditure in the past

The client should use a consistent ledger structure across all vehicle-related service expenses.

Recommended Voucher Type

If there is no PO ( usually, not required in such cases.. then use 5A type voucher ) in Finsys.

6. Payment and Imprest Control

Where the expense exceeds the permissible cash-payment limit under applicable tax law or the client’s internal financial policy, it should not be settled directly through cash.

The transaction should instead be routed through one of the following:

– The registered or approved vendor account.
– An employee’s approved imprest account.
– A bank payment.
– An approved company payment process.

If an employee has paid the amount personally or through an imprest account, the Service Voucher should be posted to the relevant employee’s account or imprest account. The supporting bill should be attached to the voucher and the reimbursement or settlement should be processed separately.

> The cash-payment limit and related tax implications should be reviewed with reference to the applicable law and the client’s accounting policy. Any statutory exceptions should also be considered where relevant.

7. Information Required for the Service Voucher

The following information should be entered in the Service Voucher:

– Voucher date.
– Vendor or employee/imprest account.
– Vehicle number or asset number.
– Nature of service, such as “Truck tyre alignment.”
– Client, project, plant, branch, , where applicable.
– Expense ledger.
– Amount as per the supplier’s bill.
– GST amount, if charged.
– TDS treatment, where applicable.
– Payment mode or settlement reference.
– Supporting invoice or cash memo.
– Approval of the responsible department or manager.

Suggested Narration

“`text
Being charges for truck tyre alignment service for vehicle number __________,
as per garage bill number __________ dated __________.
“`

8. Purchase and Inventory Requirements

For a pure service transaction of this nature:

| Requirement | Normally required? |
|—|—:|
| Purchase Order | No |
| Material Receipt Report | No |
| Quality Control inspection | No |
| Stock receipt | No |
| Stock-in-hand update | No |
| Material price history | No |
| Service Voucher | Yes |
| Supporting bill | Yes |
| Approval | Yes |

If the garage supplies separate physical goods—such as tyres, batteries, spare parts, or other identifiable materials—the transaction should be reviewed separately. In such cases, the goods portion may require a purchase or inventory transaction, while the labour or service portion may continue to be recorded through a Service Voucher.

9. GST Treatment in Finsys

The GST section of the Service Voucher should be completed based on the actual supplier bill and the applicable tax treatment.

Where GST is charged

– Record the taxable value and GST separately.
– Use the appropriate service classification.
– Record eligible input tax credit only after verifying the relevant conditions.
– Maintain the supplier’s GST details and tax invoice, where required.

and Pass the voucher, via the supplier account

 

Where GST is not charged

– Do not artificially apply a 0% HSN merely to complete the transaction.
– Record the transaction as a service without GST only where such treatment is supported by the supplier’s bill and applicable tax position.
– Mention the reason in the voucher narration or remarks, where appropriate.
– Retain the supplier’s bill as supporting documentation.

10. TDS Review / TDS Action points

TDS should not be marked as automatically applicable or automatically exempt merely because the transaction is entered as a Service Voucher.

The user should consider:

– Whether the garage is a regular supplier.
– Whether the arrangement is contractual or recurring.
– The nature of the service.
– The applicable TDS section and threshold.
– The aggregate value of payments during the relevant period.
– Whether the supplier has provided the required tax details.
– Whether any specific exemption or exception applies.

For an isolated, small-value repair service, TDS may not be required in many cases. However, repeated payments to the same supplier should be reviewed periodically, as the tax treatment may differ depending on the nature and volume of the transactions.

11. Approval and Documentation Controls

The following controls should be followed:

1. Verify that the service was actually received.
2. Check the vehicle number and service description.
3. Confirm that the bill is genuine and legible.
4. Ensure that the bill is not duplicated.
5. Confirm the GST treatment from the bill.
6. Review TDS applicability where relevant.
7. Obtain approval from the responsible manager or department.
8. Attach the bill to the Service Voucher.
9. Select the correct vendor, employee, or imprest account.
10. Ensure that the expense is allocated to the correct branch, project, cost centre, or client.

12. Finsys ERP Configuration Recommendation

as above

13. Practical Example

A garage provides a bill for truck tyre alignment for ₹12,500. No material is received, no GST is charged on the bill, and payment is made through the driver’s approved imprest account.

The transaction may be recorded as:

“`text
Vehicle Repair and Maintenance Expense A/c Dr. ₹12,500
To Driver/Employee Imprest A/c ₹12,500
“`

The Service Voucher should include the vehicle number, garage bill details, service description, approval, and a scanned copy of the bill.

14. Summary   / Plan for future

For vehicle repair and maintenance services where there is no stock movement and no requirement for purchase, receipt, or quality control processing:

> **Record the transaction directly through a Service Voucher, debit the appropriate vehicle repair expense ledger, and credit the vendor or approved imprest account.**

GST and TDS should be reviewed separately based on the actual transaction, supplier details, supporting bill, applicable law, and the client’s approved accounting policy.

Prepared by: Finsys ERP Product and Implementation Team
Reviewed by: Sangeet Kr Gupta, CA, Co Founder
Applicable to: Finsys ERP service-expense booking
Version: 1.0
Last reviewed: 09 August 2026