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Accounting entry please

Gangadhar (Internal Audit and Validation) (86 Points)

03 January 2017

Hiring of JCB from Vali constructions 400hours @ 650=260000/- servicetax 14%36400/- SBC.5%=1300/- KKC.5%=1300/- Total is 299000/- I Pass Journal Entry is CWIP Dr-----260000/- CWIP Dr----1300/- KKC receivable Dr--1300/- Servicetax Receivable Dr---36400/- To Vali Constructions 293020/- To TDS on Contractors @ 2% 5980 Can u confirm whether entry is Right or Worng, Bcz construction of civil work service tax cant applicable. tx plz

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Gangadhar (Internal Audit and Validation) (86 Points)
Replied 03 January 2017

Hiring of JCB from Vali constructions 400hours @ 650=260000/-

servicetax 14%36400/-

SBC.5%=1300/-

KKC.5%=1300/-

Total is 299000/-

I Pass Journal Entry is

CWIP Dr-----260000/-

CWIP Dr----1300/-

KKC receivable Dr--1300/-

Servicetax Receivable Dr---36400/-

To Vali Constructions 293020/-

To TDS on Contractors @ 2% 5980

Can u confirm whether entry is Right or Worng, Bcz construction of civil work service tax cant applicable. tx plz

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B Siva (Student) (104 Points)
Replied 03 January 2017

On Capitalization

CWIP		260000
Service tax (Input)		36400
KKC(Input)		1300
SBC (Input)		1300
	To Vali Constructions 299000

On payment

Vali Constructions		299000
	To TDS Payable 5980
	To Bank	293020

Gangadhar (Internal Audit and Validation) (86 Points)
Replied 03 January 2017

Thank you but on Capitalization we will not get service tax input... right

sbc input also will not get

so can pass

CWIP Dr

CWIP Dr Service Tax

To TDS

To Vali Const

Mukesh Kumar (Accounts Manager) (1466 Points)
Replied 04 January 2017

SORRY ,GANGADHAR AND SIVA, ,,,,,I THINKS YOU HAVE DEDUCTE WRONG TDS AMOUNT ,,,, IF S.T. CHARGE (SHOW)SEPRATELLY IN INVOICE ,,,,,,,,,THAN YOU SHOULD TDS DEDUCT ON ONLY JCB HIRE COST ( ON RS 260000),,,,,,,,,,,SO THAT TDS AMT. (2%) IS Rs. 5200,,,,,,,,,,,,,,,,AFTER THAT YOU SHOULD PASS ENTRY

B Siva (Student) (104 Points)
Replied 04 January 2017

No Tanush Sir, first we will pay service tax to the service provider later we will claim it as input tax credit..accordingly payment to service provider includes service tax charged by him. Therefore we should deduct TDS on total amount paid to service provider inclussive of service tax.

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B Siva (Student) (104 Points)
Replied 04 January 2017

Hi Gangadhar Sir,

We can get CENVAT credit on Capital Goods @ 50% of service tax in first year of service received and remaining 50% in later year except for SSI(Small Scale Industries) and incase of SSI we can avail 100% CENVAT credit in the initial year of service received itself.Therefore, Service Tax Input can be availed on capital goods/servies.