Service tax on advance received.

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

27 June 2014 How to calculate service tax on advance received and pay to Government , and journal entry of advance received .
suppose total advance received =50,00,000
service tax payable amount=50,00,000*12.36/112.36 =5,50,018

Journal entry in the books of service provider

Bank A/c DR. 50,00,000
To Party A/ cr 44,49,982
To service tax payable 5,50,018
this procedure is correct or incorrect.please reply this question.

CA PRAMOD SARAOGI

CA PRAMOD SARAOGI (Expert)
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28 June 2014 Bank Account DR 50 Lacs
To Party Account CR 50 Lacs
Party Account DR 550518
To Service Tax payable Account 550518

This method is absolutely correct