India Localization Service Tax/VAT Settlement

Hello,  

We have recently upgraded from 11i to R12.1.3.Our client operates from different places within India.

In 11i, At some of the location the users used india localization functionality to enter taxes such as VAT and Service Tax.Where else at some location they calculated Tax outside the system and preffered adding the tax lines in AP distribution lines manually in case of Payables and AR transaction distribution lines in case of Receivables.

Settlement functionality was not used in 11i then.  Settlement was done outside the system.  

Now, as we have upgraded the instance to R12 and we are implementing Settlement functionality we are facing major problem as it populates the old transactions as they still exist in the repository for settlement.   As Some location used India Localization fuctionality to calculate Taxes in both AP and AR but carried their settlement outside the system; while performing Settlement the credit and debit includes the old transaction as well.Kindly suggest us option to delete those transactions settlement balance from settlement screen. What are the tables that are affected in Settlement screen.Can we perform delete operation on it ?