Rate of applicability of service tax

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

18 April 2012 Dear Members good morning to all,
I have a query regarding the service tax rate applicability in case of making a provision for the F.Y 2011-12 in respect of audit fees payable. Generally provision is to be made at the end of F.Y 2011-12 for the Audit fees payable. There is a change in service tax rate w.e.f 1st April 2012. Generally the statutory auditor will raise bill in the month of say June 2012. So then service tax is payable @ 12.36%. Then for making provision what rate of service tax to be taken whether at 10% or 12%. What should be the journal entry for making the provision for audit fees.

Ravi Jhamb

Ravi Jhamb (Expert)
Follow

18 April 2012 You will make the provision for 12.36% Statutory auditing. The Journal Entries are:-

Audit Fees A/c Dr.
To Audit Fees Payable A/c

Audit Fees Payable A/c
To Bank A/c

CA Kishore Tallam

CA Kishore Tallam (Expert)
Follow

18 April 2012 First of all, you should not assume service tax for making provision.
You need to provide only for audit fees and not for service tax because u dont know whether he will give u backdated invoice (10%) or current invoice (12%).
Hence, make a provision only for audit fee and deduct TDS accordingly on that.

Upgrade to CAclubindia Pro. Subscribe Now!