please tell me accounting entry of excise ,service tax and accounting treatment in financial statement
5 Replies
Venkateswara Rao Sapare
(Accountant)
(1500 Points)
Replied 13 June 2010
Dear Friends
Output Excise duty = Excise duty charged on Sales ( Collected by us from our customers on Sales)
Input Excise Duty = Excise duty charged on Purchases ( Paid by us to the vendor on purchases )
We need to setoff “Input Duty “ from “Output Duty”, and balance should be credited into the account of Government.
The Nature of Excise Duty is a LIABILITY.
Excise duty payable = Output Duty – Input Duty
Accounting Entry – Output Excise Duty
Cash / Bank /
To Sales A/c
To Excise Duty (Output)
To Education Cess @ 2% on Excise Duty
To SHE Cess @ 1% on Excise Duty
Accounting Entry – Input Excise Duty
Purchases
Excise Duty ( Input) Dr
Education Cess @ 2% on
SHE Cess @ 1% on Excise Duty Dr.
To Cash / Bank / Vendor A/c
Please note following points:-
-
This is neither an integral element of “Sales” nor “Purchases”.
SERVICE TAX
Service Tax is to be understood on similar lines, cited above. Service Tax is a liability.
Both (1) Excise duty and (2) Service Tax known as INDIRECT TAXES, which you all are aware.
From : Venkateswara Rao Sapare
SIVASIVA
(FCA, Future CA)
(4935 Points)
Replied 13 June 2010
superb venkat
i like your step by step way of explanation.
keep it up.
Prateek
(B.Com(H) PGDBA CA Final)
(436 Points)
Replied 13 June 2010
Purchase A/c Dr
Service Tax Recoverable Dr[CA]
To Cash/Vendor A/c
Cash/Vendor Dr
To Sales A/c
To Service Tax Payable[CL]
plz correct me if it is wrong
Pradeep Kumar N
(ArticleShip)
(28 Points)
Replied 14 June 2010
Can you please let me know how do we account the service tax of insurance agents, since the service tax of insurance agents are paid by insurance provider. Also while raising the invoice for the Commission, should the service tax component should be shown seperately.
Please clarify.
PRATEEK
(ACA)
(102 Points)
Replied 17 June 2010
IF AN ASSESSE IS REGISTERED AND IS HAVING A SERVICE TAX PROVIDER NO. THEN IN THIS SCENARIO THE JOURNAL ENTRY WILL BE
1. IF SERVICES ARE RENDERED BY THE PAYEE THEN
SERVICES RECIEVED A/C DR.
SERVICE TAX @ 10.3% DR.
TO PAYEE A/C
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