Journal entry under 100% reverse charge mechanism

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

11 May 2014 Journal entry under reverse charge mechanism when service receiver receive service.

Bill amount is 10 (lacs)
Thanks in advance

Kalam

Kalam (Expert)
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12 May 2014 When you receive the Service from Foreign Vendor.

Expense Account………………………………..Dr
To Party
To TDS Payable

ST will be due on making payment or 6 months from the invoice.

When you make payment to vendor

Party Account………………………………..Dr
Service Tax Input but Not Due…………….Dr
To Bank
To Service Tax Payable

When you make Service Tax Payment
Service Tax Payable Account …………………….Dr
To Bank

For Cenvat
Service Tax Input Account………………………..Dr
To Service Tax Input but not due

Please note that you can not utilise the input credit for payment of service tax arising out of RCM. Further you can take the credit of ST paid only after making the payment.

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