Service tax

This query is : Resolved

tejaswi (Querist)
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23 March 2016 A ltd consultancy company raises the bill on b ltd rs, 100000 @14.5 % sevice tax what will be the journal entry in books of A ltd and also in B ltd

Suresh Ramaswamy

Suresh Ramaswamy (Expert)
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24 March 2016 In the books of A Ltd:

(1) On rendering of Service
B Ltd Dr 1,14,500
To Service (specify) 1,00,000
To Service Tax Payable 14,000
To SB Cess 500

(2) On payment of Service Tax
Service Tax Payable Dr 14,000
S.B.Cess Dr. 500
to Bank 14,500

In the Books of B Ltd
(1) On receipt of services
Services Received Dr 1,00,000
Service Tax Input Dr 14,000
SB Cess Dr 500
To A Ltd 1,14,500

(2) On payment to A Ltd.
A Ltd. Dr. 1,14,500
To bank 1,14,500

(3) Adjustment of Input
Service Tax Input Receivable Dr 14,000
To Service Tax Input 14,000

(4) Adjustment of SB Cess
Profit & Loss Account Dr. 500
To S.B.Cess 500