pass a entry

You cannot take Credit of Service Tax on bank charges , being bank Charges neither cover under Input or capital Goods or Input Services. So Full Amount (includind S T on  bank charges) debited under head bank Charges / Financial Charges .........

Service Tax is Charged by Bank....as Bank Services are also covered under service tax act

I disagree with Dharmbeer,

you can take service tax credit on bank charges as it is a kind of input services for the companies who provide services to its customers.  

Hence the company also need to be registered under service tax act.

It should be

Bank Charges A/c     Dr. 134

      To Bank Account                 134

But where if the bank gives you a separate invoice (With invoice number) and your firm is registered under service tax you can avail the service tax credit of Rs. 14... Hence the entry would be

Bank Charges A/c   Dr. 120

ST Receivable A/c Dr.  14

      TO Bank Account               134

pass entry           

Bank charge a/c 134

To bank                                134

In this case 1st u Dr. BANK CHARGES with the amount Rs.134 i.e

              BANK CHARGES A/C ...Dr          134

                                           To BANK                       134

               (BEING BANK CHARGES CHARGED BY BANK)

 and if want to get service tax adjust later ...

SERVICE TAX A/C.....Dr.                  14

                  To BANK CHARGES                  14

(Being service tax input credit adjusted )

It cannot be claimed as input credit for service tax as...

service is not used for manufacturing or business purpose

so whole the amount can be debited as bank charges.

FULL Rs. 134 WILL BE DEBITED TO BANK CHARGES.

The entry can be

Bank Charges a/c Dr 154

  to Bank a/c 154 

The entry can be

Bank Charges a/c Dr 154

  to Bank a/c 154 

The entry is

Bank Charges a/c Dr. 154

to Bank a/c 154