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
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
CAclubindia
