30 April 2013
Company is providing online information sharing service by collecting annual Subscription. In this case 1. how to account this income as the amount collected for one year. Can we treat this as sales. 2. When to service tax? 3.How to issue the invoice to customers?(where we have to indicate the service tax portion collected) 4. If company collects the annual subscription in the month of February (feb13 to jan14) will it be considered as income for current financial year (12-13)?
30 April 2013
1.This is not sale as this is a service provider company. This is to be treated as Income. One year subscription collected is to be shown as income, if that period falls with in that financial year. 2.Service tax has to be collected separately on this income, if not collected means, fees collected is to be devided with 112.36*12.36 and the service tax should be paid to gvot. 3.All invoices issued should show a separate indication about service tax collected. 4.Only that much income pertaining to the financial year is to be considered as income for that financial year under accrual basis of accounting. If your company is following cash basis of accounting, treatment will be different.
Thank you for your quick reply. I have few more queries. 1. I need journal entry for - Receipt of Income - Adjustment of Income towards expenses (monthly adjustment) 2. We will be issuing only one invoice when we receive payment by indicating the service tax portion. Can we record a sales to issue invoice. If not what should be the accounting entry in books of accounts. 3. Do we need to Adjust Income towards expenses (monthly adjustment) customer wise or one entry for all the customers is fine.
Thank you for your quick reply. I have few more queries. 1.I need journal entry for - Receipt of Income - Adjustment of Income towards expenses (monthly adjustment) 2.We will be issuing only one invoice when we receive payment by indicating the service tax portion. Can we record a sales to issue invoice. If not what should be the accounting entry in books of accounts. 3.Do we need to Adjust Income towards expenses (monthly adjustment) customer wise or one entry for all the customers is fine.
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