Entry for service tax and tds on consultancy fees

This query is : Resolved

Pankti (Querist)
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15 May 2013 Would like to have an opinion on the following transaction.

lets say company A receives a consultancy services and the invoice for the same is as follows:
Consultancy services 100000
Service tax @12.36% ( rounding off for convenience) to 12000
tds on 112000@ 11.33% rounding off to 13000

So what would be entries in books of A

as per my opinion it should be as follows in books of A

1)first entry:

Consultancy fees Dr. 100000 -
ServiceTax payable A/c Dr. 12000 -
Tds A/c Dr. 13000 -

To A A/c Cr - 112000
To Tds payable A/c Cr - 13000

2) second entry:

Tds payable A/c Dr. 13000 -
To Bank A/c Cr. - 13000

3) Third entry :

A A/c Dr. 112000 -
To Tds A/c Cr. - 13000
To BankA/c Cr. - 99000

Ankit

Ankit (Expert)
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15 May 2013 Dear Pankti,

According to me, the following entries should come:

1. consultancy fees Dr. 1,00,000
Service Tax Credit Dr 12,000
To A A/c 1,12,000

2. A A/c Dr 1,12,000
To Bank 99,000
To TDS A/c 13,000

3. TDS A/c Dr 13,000
To Bank A/c 13,000

Now, the Service Tax Credit a/c in the first entry can be used for adjusting the ST payment required to be made by the company to the Govt.
the following entry will come:

service tax payable Dr XXX
to Service Tax Credit XXX

- Ankit

Pankti

Pankti (Querist)
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15 May 2013 Thanks a lot Ankit for your immediate response

Regards,
Pankti

Ankit

Ankit (Expert)
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15 May 2013 you are welcome...if you have any more doubts..feel free to ask

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