Reverse charge mechanism

This query is : Resolved

A.JAGADEEP (Querist)
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10 August 2013 Dear Sir,

There is one doubt regarding RCM Treatment( Accounting Issue)

A Company has taken a car on hire basis from service provider(i.e; XYZ Travels, An Individual)

For this Invoice is raised for Rs10000/- and service tax portion amounts to 741/-(60%*12.36).
then how the entry will reflect in Service Receiver books .

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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12 August 2013 Firstly abatement is 60% and taxable portion is only 40%.

So service tax liability amounts to Rs. 494.

Entry will be as under:

Car Hire Charges A/c Dr 10,494
To Cab Operator 10,000
To Service Tax Liability 494

A.JAGADEEP

A.JAGADEEP (Querist)
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13 August 2013 Sir, first ofall thanks for u r reply.

what is the entry, if customer takes Service tax input credit?

Reply me as early as possible sir.

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CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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14 August 2013 Car Hire Charges Dr 10,000
CENVAT Receivable-Input Service Dr 494
To Cab Operator 10,000
To Service Tax Liability 494