Accounting for service tax

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Hello everybody..

I want tot know how the service tax input is to be accounted ie. whether the educational cess is to be accounted seperately?

Replies (3)

Service Tax is to be paid on services used by the company eg: Transportation Charges paid by company first we have to calculate the Service Tax.....

Ex:
Transportation Charges= 50 000/-
As per Service Tax Act 1994 liability to pay service tax on freight charges is on the person paying freight charges.. we have to take 25 of the actual paid.

25 on actual paid (50000*25 )=12 500=00 on this amount we have to calculate

12 Service Tax= 1500/-
Education Cess=45/-
Total Service Tax amount= 1545/- (This amount we have to pay to Govt)

1. Create Liability 
against Service Tax:

Service Tax A/c Dr 1545
Service Tax Liability A/c Cr 1545

2. After payment of Service Tax:
Bank/Cash A/c Dr 1545
Service Tax Liability A/c Cr 1545 

Service Tax Liability Account may be 
nullified.

u say : After payment of Service Tax :

Bank/Cash A/c DR. - 1545/-

Service Tax Liability A/c Cr. 1545/-

is it Correct ????????

I think at the time of pymnt liability is dr

 

you are right payment of tax will be debit and bank account will be credit...........


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