19 June 2008
I HAVE A DOUBT ON TREATMENT OF ACCCOUNTS. THIS IS IN VIEW OF THE NEW CONCEPT OF SERVICE TAX COLLECTION (COMPANIES ARE ACTING AS COLLECTING AGENTS). WHEN I COME ACROSS THE ACCOUNTS OF CO. THIR OUTPUT BILL (112360) OF WHICH I LAHK IS TREATED AS THEIR INCOME, BALANCE (12360) AS THEIR LIABILITY TOWARDS ST.HENCE THEIR TURNOVER/INCOME DOEST NOT REFLECT THE GROSS BILLING. AS AND WHEN THEY ARE CLAIMING INPUT TAX CLAIM ( FOR EXAMPLE TEL. BILLS RS.1123) TELEPHONE CHARGES ARE ACCOUNTED FOR RS.1000 ONLY AND RS. 123 ARE ACCOUNTED IN INPUT TAX CLAIM ACCOUNT. IS IT THE RIGHT APPROACH.
19 June 2008
Yes..it is absolutely right. Service tax collected cannot be construed as Income to the Company as it is statutory due to remitted to Government..
And regarding Input Tax...If it is not accounted seperately, how do claim input credit as it will be difficult to know Input tax amount if it is merged with the bill amount...
CAclubindia
