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Accouting Entry

Amit Gupta (Loosening Myself) (1508 Points)

09 April 2009

Hi Guys

I ve encountered an Voucher described as follows:

Amt of Service= 10000/-

Service Tax=1236/-

Discount @ 5% at Rs11236/-=560

How the entry sud be passed in books??

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19 Replies

CS Asmita Mehta (CS) (308 Points)
Replied 10 April 2009

I think the entry should be.......

Bank A/c Dr 10674.20

To sales a/c 9500.00

{10000 - (10000*5/100)}

To service tax 1174.20

(9500*12.36/100)

Because service tax should be recovered at the value of sales and the value of sales is 9500 (after deducting trade discount)

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Ram Avtar Singh (Nagari Sultanpur U.P.Delhi) (14487 Points)
Replied 10 April 2009

Exps a/c Dr 10000

Service tax Dr 1200

Cess on Service tax Dr 24

Secondry & Higher Edu Cess Dr 12

Rebate & disrount Cr 560

Party A/c Cr 10676

renuka kadge (CA Final Student) (148 Points)
Replied 10 April 2009

Originally posted by :Amit Gupta
"	Hi Guys I ve encountered an Voucher described as follows: Amt of Service= 10000/- Service Tax=1236/- Discount @ 5% at Rs11236/-=560 How the entry sud be passed in books??	"

Hi Amit,

I thk the Voucher u had encounted is expense Voucher

So entry will be

Professional Charges A/c DR 10000
DR 1236
To Party 10676
To Disc Earned A/c 560

Party A/c DR 10676
To Bank 10676

Service Tax Payable (Liability) DR 1236
To Service Tax (input tax) A/c 1236

Professional Charges will be debited to P & L A/c & Disc Earned will be Credited to P & L A/c

Hope ur satified wih the Solution

Revert back

Hv a nice Day

Sanjay Singh Rana (CA) (208 Points)
Replied 10 April 2009

i think Renuka is right

entry will be

*professional charges a\c dr 10000

*cenvat on service tax a\c dr 1200

*education cess(cenvat on service tax) dr 36

To partyname a\c cr 10676

To discount earned a\c cr 560

* manufacturing company can take cenvat credit on service tax paid

Amit Gupta (Loosening Myself) (1508 Points)
Replied 10 April 2009

Originally posted by :renuka kadge
"	Originally posted by :Amit Gupta " Hi Guys I ve encountered an Voucher described as follows: Amt of Service= 10000/- Service Tax=1236/- Discount @ 5% at Rs11236/-=560 How the entry sud be passed in books?? " Hi Amit, I thk the Voucher u had encounted is expense Voucher So entry will be Professional Charges A/c DR 10000 DR 1236 To Party 10676 To Disc Earned A/c 560 Party A/c DR 10676 To Bank 10676 Service Tax Payable (Liability) DR 1236 To Service Tax (input tax) A/c 1236 Professional Charges will be debited to P & L A/c & Disc Earned will be Credited to P & L A/c Hope ur satified wih the Solution Revert back Hv a nice Day	"

Thanx..

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Sumit Jain (CA) (4760 Points)
Replied 10 April 2009

I THINK RENUKA IS RIGHT

Boomi (COMMERCIAL) (22 Points)
Replied 10 April 2009

Friends,

i accept nikita said because what ever the tax is liable only after deducting the discount only.

for eg: if yor giving sample stock do you charge the tax for the customer or you will pay behalf of customer ? Think logic.......... this is my opinion may be wrong?

suhasini (Accountant) (32 Points)
Replied 10 April 2009

but the most imp thing is whether the disc is cash disc or trade disc. as the voucher is for services provided its a cash discount.now the total amount of bill will be rs.11236ie after adding the service tax @ 12.36% on 10000/-. from 11236 disc will be allowed i.e 5%ie 560/-.

the entry will be

professional fees Dr 10000/-

service tax Dr 1236/-

To Party's A/c 11236/-

party's Account Dr 560/-

To Discount Account 560/-

Party's Account Dr 10676/-

To Cash/Bank 10676/-

Dharmendra (Services) (26 Points)
Replied 10 April 2009

Originally posted by :Amit Gupta
"	Hi Guys I ve encountered an Voucher described as follows: Amt of Service= 10000/- Service Tax=1236/- Discount @ 5% at Rs11236/-=560 How the entry sud be passed in books??	"

Hi Guys

I think nikita is write. As per the ST rule, we have to pay the services tax on the receipt amount. If we have received the less amount compare to bill amount then we to pay tax on receipt amount by revevse calculation.

suhasini (Accountant) (32 Points)
Replied 10 April 2009

but as per amit gupta it is amt on servicesa 10000/- and amt on sales.please consider the diff between sales and services

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sandip bhogayta (manager - taxation) (65 Points)
Replied 10 April 2009

Dear All

we are a leading manufacturer of pig iron, now we want to go for producing a cast iron articles & this cast iron articles is aslo used in our plant & machinery for the production. now sir plz suggest me for

which document prepare for the issue of pig iron for producing C.I.Casting. & also C.I. casting issue for used as a plant & machinery. & its a mandatory to issue EXCISABLE INVOICE for the issue of goods for captive consumption.

thanks in advance.

a waiting for your reply.

regards

sandip bhogayta

Sanjay Singh Rana (CA) (208 Points)
Replied 10 April 2009

Originally posted by :Boomi
"	Friends, i accept nikita said because what ever the tax is liable only after deducting the discount only. for eg: if yor giving sample stock do you charge the tax for the customer or you will pay behalf of customer ? Think logic.......... this is my opinion may be wrong?	"