just reply to this if u knw
telephone exp. of march 08 is 1123.6(including service tax) which is paid in april 08 how entry has to be passed while booking the bill and when bill is paid.i.e for the financial year 07-08 & 08-09.
Ritesh Jain
(CA, CS in Job)
(675 Points)
Replied 06 January 2009
In March:-
Telephone exp dr 1123.6
To Outstanding exp 1123.6
(Assuming no CENVAT credit of Input service is to be taken)
In 2008-09. When payment is made
outstanding exp dr 1123.6
To Bank/Cash 1123.6
aasita
(ACA)
(387 Points)
Replied 06 January 2009
no we have to take credit of cenvat.n bill is paid in april 08whre as booking is in March 08
CA CS Akashdeep Singh
(Practicing CA)
(1394 Points)
Replied 06 January 2009
| Originally posted by :RJ | ||
| " | In March:- Telephone exp dr 1123.6 To Outstanding exp 1123.6 (Assuming no CENVAT credit of Input service is to be taken) In 2008-09. When payment is made outstanding exp dr 1123.6 To Bank/Cash 1123.6 |
"
|
Hello Mr. RJ where is CENVAT cedit.
Correct entries are:
|
In March:-
Service tax recoverable.............................................Dr 120 Education Cess recoverable.....................................Dr. 2.4 Secondary and Higher Education Cess recoverable...........Dr. 1.2
|
"
|
Ritesh Jain
(CA, CS in Job)
(675 Points)
Replied 07 January 2009
I assumed that there was nrequirement of CENVAT credit ....but when CEN cr is to be taken than ....
Mr. AKS entries will work.
CA Surajit Kashyapi
(Chartered Accountant)
(112 Points)
Replied 07 January 2009
The entries given by Mr Akashdeep will always work... That is only the correct entry.
Ritesh Jain
(CA, CS in Job)
(675 Points)
Replied 07 January 2009
I would like to add one thing that:-
Charging exp 1000 in earlier year is OK but What about Provision of 123.60 which should also be provided as O/S liability in earlier year.
Though CENVAT cr can only be taken on payment but liability recognition should not be affected by that.
So, Entries Should b:-
Telephone exp.............................................................. Dr 1000
Service tax recoverable.............................................Dr 120
Education Cess recoverable.....................................Dr. 2.4
Secondary and Higher Education Cess recoverable...........Dr. 1.2
TO o/s exp 1123.6
NEXT YEAR
O/S Exp................................Dr 1123.6
TO Bank/Cash........1123.6
&
CENVAT credit availed A/c(Under diff head) .....................Dr 123.6
To Service tax recoverable.. 120
To Education Cess recoverable.. 2.4
To Secondary and Higher Education Cess recoverable 1.2
Note:- Only by debiting amount to SERVICE TAX Recoverable doesnot mean that we have taken credit of that amount.
CA CS Akashdeep Singh
(Practicing CA)
(1394 Points)
Replied 09 January 2009
| Originally posted by :RJ | ||
| " | I would like to add one thing that:- Charging exp 1000 in earlier year is OK but What about Provision of 123.60 which should also be provided as O/S liability in earlier year. Though CENVAT cr can only be taken on payment but liability recognition should not be affected by that. So, Entries Should b:- Telephone exp.............................................................. Dr 1000 Service tax recoverable.............................................Dr 120 Education Cess recoverable.....................................Dr. 2.4 Secondary and Higher Education Cess recoverable...........Dr. 1.2 TO o/s exp 1123.6 NEXT YEAR O/S Exp................................Dr 1123.6 TO Bank/Cash........1123.6 & CENVAT credit availed A/c(Under diff head) .....................Dr 123.6 To Service tax recoverable.. 120 To Education Cess recoverable.. 2.4 To Secondary and Higher Education Cess recoverable 1.2 Note:- Only by debiting amount to SERVICE TAX Recoverable doesnot mean that we have taken credit of that amount. |
" |
Hello Mr. Rj
Liability of service tax arise in the next year i.e., 2008-09. So, we don't recognise 123.6/- in 2007-08
Ameet
(L)
(1678 Points)
Replied 10 January 2009
i didn't understand , Pls explain me ?
why we don't recongnise in 2007-08 since it relates to march i.e, for the accounting year only ?
CA CS Akashdeep Singh
(Practicing CA)
(1394 Points)
Replied 10 January 2009
| Originally posted by :Ameet | ||
| " | i didn't understand , Pls explain me ? why we don't recongnise in 2007-08 since it relates to march i.e, for the accounting year only ? |
" |
Service tax is a concept of cash basis, liability of service tax arises on payment i.e., in 2008-09
Ritesh Jain
(CA, CS in Job)
(675 Points)
Replied 12 January 2009
Hi,
Mr. AKS Yes u r correct that the liability of ST arises in next f.y BUT.
THE LIABILITY FOR PAYMENT(To BSNL) OF 123.6 has to be booked in the year when it relates to.
Making provision of Only thousand Rs (in 2007-08) will show that your liabilty is only Rs 1000(toward telephone exp) for the month of march.whereas actually it is 1123.6.
Its violation of accrual concept
MAking provision for exp as per accounting concept is not related to payment of ST liabiliy.
It is other part of the case that you will be taking credit of the ST part in the next year....
CA CS Akashdeep Singh
(Practicing CA)
(1394 Points)
Replied 12 January 2009
Sorry, i was wrong, correct enteries are; (now i m 100% sure, its true, i was little confused)
In March:-
Telephone exp .................................dr 1000
Cenvat Credit Suspense A/c..........dr 123.6
To Outstanding exp 1123.6
(No CENVAT credit of Input service is to be taken in march because there is no payment)
In 2008-09. When payment is made
outstanding exp.........................................................Dr. 1123.36
To Bank/Cash 1123.6
AND
Service tax recoverable.............................................Dr 120
Education Cess recoverable.....................................Dr. 2.4
Secondary and Higher Education Cess recoverable...........Dr. 1.2
To cenvat credit suspense A/c 123.6
Ritesh Jain
(CA, CS in Job)
(675 Points)
Replied 12 January 2009
Yes,
In alternate to recoverable a/c one can also debit suspense a/c of CENVAT.
A/C head differs from organization to organization.
Analysis of 20 GST Notices (including 2 Appeals) and Practise on Drafting(with recording)
GSTR 9 and 9C for FY 23-24 as amended by Notification 12/2024 dated 10th July 2024(with recording)
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