TREATMENT IN BOOK OF ACCOUNTS

This query is : Open

CHANDRAJEET KUMAR JHA (Querist)
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15 February 2011
WE HAVE PAY RS. 5 LAC AS SERVICE TAX OUT OF WHICH RS 2 LAC IS INTEREST PERTAINING TO FY-2005-06 &2008-09.

WHAT ENTRY SHOULD I MADE & WILL I GET EXPENSE ALLOWABLE?

PLEASE ADVICE..

Gopal Suthar

Gopal Suthar (Expert)
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15 February 2011 Interest on service tax payable is allowable expense if it is compensatory in nature and if it is penal in nature it will be disallowed.
eg. Late fees for delayed payment =allowed
Penalty for not filinf return=disallowed.

as regarding entry its depend on your method of accounting i.e. whether u doing on gross basis or net basis.

hope this will help.