Accounting entry please

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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On Capitalization 

On payment

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

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.

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.

Thanks you for correcting  Mukesh Sir