17 March 2009
sir I am an CHA. I purchase clearance with servicetax & sale with service tax.Some time the purchaser charges excess agency charges.agency charges are charged service tax.some time we deduct the excess agency charges and its service tax.
Eg: agency charges 1000 service tax 10.36% 104 total payable 1104 paid (800+83) 883.00
can i reverse the remaining charges with service tax (200+21) 221.00 same like purchase return and say the duration for reversing the entry entry:(agency purchase )dt1/10/09 party ac cr 1104.00 agency dr 1000.00 st 10.36% dr 104.00
reverse entry (deduction)dt 31/3/09 party dr 221 agency cr 200.00 st 10.36 21.00
21 March 2009
you will need to issue credit note to the service provider to enable him to recredit his account for the excess service tax, which if paid by him can be adjusted subsequently.
Mere reversal in your books of accounts will not give substantial rights to the service provider for the excess service tax charged.
You need to take proportionate credit, however avoid changes on the invoice, if at all you have to show corrections they can be done at the end of the invoice, to avoid disallowance if original value on the invoice are tempered.
However if you have inadvertantly carried out the corrections then you will need to seek signature of the service provider on the invoice (the same person who had signed the invoice)
CAclubindia
