fix: better gls for purchases with tax witholding (#42743)

* fix: better gls for purchases with tax witholding

* test: test case for purchase invoice gl entries with tax witholding

* fix: use flag `_skip_merge` instead of skipping merge based on against account

* test: fix test `test_single_threshold_tds` for newer implementation

(cherry picked from commit e3cd653)

erpnext/accounts/doctype/purchase_invoice/purchase_invoice.py

@@ -863,6 +863,7 @@ def get_gl_entries(self, warehouse_account=None):
 
 		self.make_tax_gl_entries(gl_entries)
 		self.make_internal_transfer_gl_entries(gl_entries)
+		self.make_gl_entries_for_tax_withholding(gl_entries)
 
 		gl_entries = make_regional_gl_entries(gl_entries, self)
 
@@ -896,32 +897,37 @@ def make_supplier_gl_entry(self, gl_entries):
 		)
 
 		if grand_total and not self.is_internal_transfer():
-			against_voucher = self.name
-			if self.is_return and self.return_against and not self.update_outstanding_for_self:
-				against_voucher = self.return_against
+			self.add_supplier_gl_entry(gl_entries, base_grand_total, grand_total)
+
+	def add_supplier_gl_entry(
+		self, gl_entries, base_grand_total, grand_total, against_account=None, remarks=None, skip_merge=False
+	):
+		against_voucher = self.name
+		if self.is_return and self.return_against and not self.update_outstanding_for_self:
+			against_voucher = self.return_against
+
+		# Did not use base_grand_total to book rounding loss gle
+		gl = {
+			"account": self.credit_to,
+			"party_type": "Supplier",
+			"party": self.supplier,
+			"due_date": self.due_date,
+			"against": against_account or self.against_expense_account,
+			"credit": base_grand_total,
+			"credit_in_account_currency": base_grand_total
+			if self.party_account_currency == self.company_currency
+			else grand_total,
+			"against_voucher": against_voucher,
+			"against_voucher_type": self.doctype,
+			"project": self.project,
+			"cost_center": self.cost_center,
+			"_skip_merge": skip_merge,
+		}
 
-			# Did not use base_grand_total to book rounding loss gle
-			gl_entries.append(
-				self.get_gl_dict(
-					{
-						"account": self.credit_to,
-						"party_type": "Supplier",
-						"party": self.supplier,
-						"due_date": self.due_date,
-						"against": self.against_expense_account,
-						"credit": base_grand_total,
-						"credit_in_account_currency": base_grand_total
-						if self.party_account_currency == self.company_currency
-						else grand_total,
-						"against_voucher": against_voucher,
-						"against_voucher_type": self.doctype,
-						"project": self.project,
-						"cost_center": self.cost_center,
-					},
-					self.party_account_currency,
-					item=self,
-				)
-			)
+		if remarks:
+			gl["remarks"] = remarks
+
+		gl_entries.append(self.get_gl_dict(gl, self.party_account_currency, item=self))
 
 	def make_item_gl_entries(self, gl_entries):
 		# item gl entries
@@ -1413,6 +1419,31 @@ def make_internal_transfer_gl_entries(self, gl_entries):
 				)
 			)
 
+	def make_gl_entries_for_tax_withholding(self, gl_entries):
+		"""
+		Tax withholding amount is not part of supplier invoice.
+		Separate supplier GL Entry for correct reporting.
+		"""
+		if not self.apply_tds:
+			return
+
+		for row in self.get("taxes"):
+			if not row.is_tax_withholding_account or not row.tax_amount:
+				continue
+
+			base_tds_amount = row.base_tax_amount_after_discount_amount
+			tds_amount = row.tax_amount_after_discount_amount
+
+			self.add_supplier_gl_entry(gl_entries, base_tds_amount, tds_amount)
+			self.add_supplier_gl_entry(
+				gl_entries,
+				-base_tds_amount,
+				-tds_amount,
+				against_account=row.account_head,
+				remarks=_("TDS Deducted"),
+				skip_merge=True,
+			)
+
 	def make_payment_gl_entries(self, gl_entries):
 		# Make Cash GL Entries
 		if cint(self.is_paid) and self.cash_bank_account and self.paid_amount:

erpnext/accounts/doctype/purchase_invoice/test_purchase_invoice.py

@@ -1544,6 +1544,61 @@ def test_purchase_invoice_advance_taxes(self):
 		payment_entry.load_from_db()
 		self.assertEqual(payment_entry.taxes[0].allocated_amount, 0)
 
+	def test_purchase_gl_with_tax_withholding_tax(self):
+		company = "_Test Company"
+
+		tds_account_args = {
+			"doctype": "Account",
+			"account_name": "TDS Payable",
+			"account_type": "Tax",
+			"parent_account": frappe.db.get_value(
+				"Account", {"account_name": "Duties and Taxes", "company": company}
+			),
+			"company": company,
+		}
+
+		tds_account = create_account(**tds_account_args)
+		tax_withholding_category = "Test TDS - 194 - Dividends - Individual"
+
+		# Update tax withholding category with current fiscal year and rate details
+		create_tax_witholding_category(tax_withholding_category, company, tds_account)
+
+		# create a new supplier to test
+		supplier = create_supplier(
+			supplier_name="_Test TDS Advance Supplier",
+			tax_withholding_category=tax_withholding_category,
+		)
+
+		pi = make_purchase_invoice(
+			supplier=supplier.name,
+			rate=3000,
+			qty=1,
+			item="_Test Non Stock Item",
+			do_not_submit=1,
+		)
+		pi.apply_tds = 1
+		pi.tax_withholding_category = tax_withholding_category
+		pi.save()
+		pi.submit()
+
+		self.assertEqual(pi.taxes[0].tax_amount, 300)
+		self.assertEqual(pi.taxes[0].account_head, tds_account)
+
+		gl_entries = frappe.get_all(
+			"GL Entry",
+			filters={"voucher_no": pi.name, "voucher_type": "Purchase Invoice", "account": "Creditors - _TC"},
+			fields=["account", "against", "debit", "credit"],
+		)
+
+		for gle in gl_entries:
+			if gle.debit:
+				# GL Entry with TDS Amount
+				self.assertEqual(gle.against, tds_account)
+				self.assertEqual(gle.debit, 300)
+			else:
+				# GL Entry with Purchase Invoice Amount
+				self.assertEqual(gle.credit, 3000)
+
 	def test_provisional_accounting_entry(self):
 		setup_provisional_accounting()
 

erpnext/accounts/doctype/tax_withholding_category/test_tax_withholding_category.py

@@ -74,11 +74,17 @@ def test_single_threshold_tds(self):
 		self.assertEqual(pi.grand_total, 18000)
 
 		# check gl entry for the purchase invoice
-		gl_entries = frappe.db.get_all("GL Entry", filters={"voucher_no": pi.name}, fields=["*"])
+		gl_entries = frappe.db.get_all(
+			"GL Entry",
+			filters={"voucher_no": pi.name},
+			fields=["account", "sum(debit) as debit", "sum(credit) as credit"],
+			group_by="account",
+		)
 		self.assertEqual(len(gl_entries), 3)
 		for d in gl_entries:
 			if d.account == pi.credit_to:
-				self.assertEqual(d.credit, 18000)
+				self.assertEqual(d.credit, 20000)
+				self.assertEqual(d.debit, 2000)
 			elif d.account == pi.items[0].get("expense_account"):
 				self.assertEqual(d.debit, 20000)
 			elif d.account == pi.taxes[0].get("account_head"):

erpnext/accounts/general_ledger.py

@@ -234,6 +234,10 @@ def merge_similar_entries(gl_map, precision=None):
 	merge_properties = get_merge_properties(accounting_dimensions)
 
 	for entry in gl_map:
+		if entry._skip_merge:
+			merged_gl_map.append(entry)
+			continue
+
 		entry.merge_key = get_merge_key(entry, merge_properties)
 		# if there is already an entry in this account then just add it
 		# to that entry