hello,
service tax collected on commission received by an individual and remitted to the govt. will that be taken as indirect expenses in his income & expenditure statement?
6 Replies
CA Anand Sarda
(Working)
(1580 Points)
Replied 20 June 2008
it will not be an expenses or income for us.. it will be liability till it is not paid.
hemanth
(student)
(43 Points)
Replied 20 June 2008
service tax paid will come under expenditure and can be claimed under section 40(a).
sudha
(CFO)
(64 Points)
Replied 20 June 2008
Service Tax is to be treated as a liability and will not appear in the income and expenditure account.
The entries shall be as under.
Debtor Dr 100
To sale of service 88
To service Tax 12
Bank Dr 100
To Debtor 100
Service Tax Dr 12
To Bank 12
(Cess is not considered)
subramanya
(Professional)
(907 Points)
Replied 20 June 2008
Service Tax collected will be treated as currently liability (Duties and Taxes)
CA Chirag
(vvvvvvv)
(34 Points)
Replied 25 June 2008
How would u treat the following???
Total sales-500
Billing Tax (Service Tax)-60
Collection tax (Service Tax)-45 (inclusive of input credit)
Input credit taken is-15
So after taking credit,we remit only the net figure i.e. 30 to the govt.
is this 30 be shown as deduction from total sales in p&L
Thanks in advance,
Chirag
CA PRAMOD SARAOGI
(Chartered Accountant)
(1113 Points)
Replied 28 June 2008
Since you have not paid anything out of your own pocket but have reimbursed it from the person from whom commission is received, service tax cannot be charged to Profit and Loss Account. The amount of service tax Charged by yoy shall be credited to Service Tax Payable Account and when you pay it to the Govt account the Service Tax Account get squared up. But if no payment of service Tax is made by the service user the amount of the service tax charged by you in the bill has to be borne by you and in that case you have to debit the amount of service tax paid to Profit & Loss Account.
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