Treatment ????

This query is : Resolved

Archana Das (Querist)
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27 October 2012 hey,

During my audit i came across 4 A/c in my client's Tally system i.e

1. Service tax (paid/credit) A/c

2.Service tax payable Expense A/c

3.Service tax payable A/c

4.Service tax A/c

Can any1 plz explain to me what is recorded in each of these accounts,

also mention the way of accounting the same.

And when (which cases) should service tax be reversed ?

Thank you

@VaibhavJ

@VaibhavJ (Expert)
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28 October 2012 Hey Hi,

1. Service Tax paid / Cr A/c is for Service Tax paid by client why receiving services.

2. Service Tax Payable is Exp A/c which need to be debited agst Income A/c in same proportion.

3. Service Tax Payable is Liability A/c. Ser Tax liability or Payable amount is recorded here while raising invoices for Services Provided.

4. Service Tax A/c is Income A/c which is hit side by side while booking ST Exp.

When Booking for Invoice agst Services Received Service Tax paid A/c is credited entry is..

Expenses Dr. 100
Service Tax Cr A/c 12.36
....To Creditors....112.36

You can utilise credit in this A/c for Payment of ST.

2. When Invoice is Raised for services provided..

Dr A/c Dr. 112.36
...To Income A/c...100
...To Service Tax Payable A/c...12.36

Also JV to be recorded for Inome & Exp A/c as per AS

Service Tax EXP A/c 12.36
...To Service Tax A/c 12.36

While making Payment of Service Tax...

Service Tax Payable A/c 12.36
.. To Bank A/c 12.36

or when adjusted from Credit A/c

Service Tax Payable A/c 12.36
.. To Service Tax paid / Cr A/c 12.36

Rgds//Vaibhav
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