ayesha (mcom) (1185 Points)
17 July 2013i) A company has a contract under section 194 c of rs 35000 with a party.Half of this amount is paid in advance that is rs 17500 paid by company in advance.No bill is issued for that payment. At the end of the year bill is issued for full rs 35000.Rest of the payment is made.What will be journal entries.
ii) What will be journal entries if this case was for service tax and not tds
CA Kumar Mukesh
(CA CMA FINAL and Advance Excel Trainer)
(6881 Points)
Replied 17 July 2013
(i) Required Entries to booked by contractee i.e. Company
At the time of first payment
Contractor Dr. 17500
to Bank/Cash 15750
to TDS payable 1750
at the time of bill received
Expenses Dr. 35000
party Dr 1750
to party 35000
to tds 1750
at the time of final payment
party dr. 15750
to bank 15750
(ii) if contractor coverved under Service Tax Entries
At tthe time of first payment
Samer as above
at the time of Bill Received
Expenses Dr 35000
party Dr. 3932
Service Tax Receivable 4326
to party 39326
to Tds 3932
At the time of final payment
Contractor Dr. 17894
to Bank 17894
.
ayesha
(mcom)
(1185 Points)
Replied 17 July 2013
why have u calculated tds at 5% when under 194 c tds is 2 % only.in the second case i wanted entries for service tax (no tds there)
Bhaavna
(Queen )
(1933 Points)
Replied 17 July 2013
ayesha
(mcom)
(1185 Points)
Replied 17 July 2013
plz give journal entries for both cases
where service tax is inclusive in 35000
where service tax is exclusive in 35000
Piyush Agrawal
(Accounts Manager)
(46 Points)
Replied 17 July 2013
where service tax is inclusive in 35000
Contractor A/c Dr. 17500 -
To Bank/Cash A/c - 17150
To TDS payable - 350
Exp. A/c Dr. 31150 -
Service Tax Input A/c Dr. 3850 -
To Contractor A/c - 34650
To TDS payable - 350
Contractor A/c Dr. 17150 -
To Bank/Cash A/c - 17150
where service tax is exclusive in 35000
Contractor A/c Dr. 17500 -
To Bank/Cash A/c - 17150
To TDS payable - 350
Exp. A/c Dr. 35000 -
Service Tax Input A/c Dr. 4326 -
To Contractor A/c - 38889
To TDS payable - 437
Contractor A/c Dr. 38889 -
To Bank/Cash A/c - 38889
Nitin
(Audit and Accounts Executive)
(64 Points)
Replied 17 July 2013
1. at the time of advance paid:
Party A/c Dr. 17500.00
BankA/c Cr. 17500.00
2. at the time of full and final
Party A/c Dr. 17500.00
Bank A/c Cr. 17500.00
Piyush Agrawal
(Accounts Manager)
(46 Points)
Replied 17 July 2013
Sorry,
where service tax is exclusive in 35000
Contractor A/c Dr. 21389 -
To Bank/Cash A/c - 21389
CA Kumar Mukesh
(CA CMA FINAL and Advance Excel Trainer)
(6881 Points)
Replied 17 July 2013
| Originally posted by : KumarMukesh (Work in Progress) | ||
 |
(i) Required Entries to booked by contractee i.e. Company At the time of first payment Contractor Dr. 17500 to Bank/Cash 15750 to TDS payable 1750 at the time of bill received Expenses Dr. 35000 party Dr 1750 to party 35000 to tds 1750 at the time of final payment party dr. 15750 to bank 15750 (ii) if contractor coverved under Service Tax Entries At tthe time of first payment Samer as above at the time of Bill Received Expenses Dr 35000 party Dr. 3932 Service Tax Receivable 4326 to party 39326 to Tds 3932 At the time of final payment Contractor Dr. 17894 to Bank 17894 . |
 |
Ayesha You are correct TDS should be 2%/1% under section 194C depending upon status of contractor.
Assumptions: contractor is other than Individual & HUF. And liable to charge service tax @ 12.36%
Case 1 where service Tax Included into Rs 35000
At the time of first payment
Contractor Dr. 17500
to Bank/Cash 17150
to TDS payable 350
At the time of bill received
Expenses Dr. 31166/35000 Subject to elibility to take Service Tax input
Party Dr 350
Service Tax Receivable Dr. 3833/0 Subject to elibility to take Service Tax input
to party 35000
to tds 350 (35000*2%-350)
at the time of final payment
party dr. 17150 (35000-17150-350-350)
to bank 17150
Case 2 where service Tax excluded from Rs 35000
At the time of first payment
Contractor Dr. 17500
to Bank/Cash 17150
to TDS payable 350
At the time of bill received
Expenses Dr. 35000/39326 Subject to elibility to take Service Tax input
Party Dr 436
Service Tax Receivable Dr. 4326/0 Subject to elibility to take Service Tax input
to party 39326
to tds 436 (39326*2%-350)
at the time of final payment
party dr. 21390 (39326-17150-350-486)
to bank 21390
Saurabh Gupta
(MBA)
(26 Points)
Replied 17 July 2013
| Originally posted by : Nitin | ||
|
|
1. at the time of advance paid: Party A/c Dr. 17500.00 BankA/c Cr. 17500.00 2. at the time of full and final Party A/c Dr. 17500.00 Bank A/c Cr. 17500.00 3. there is not to deduct TDS because it is not cross the limit of Sec. 194 C i.e. 30000/- where the amount paid/cr edit in single 75000/- where the agreeget payment was made during the year...... |
|
The single bill was raised of Rs.35000/- at last so TDS will be deducted.
P ASHOK KUMAR
(Accountnat)
(21 Points)
Replied 11 November 2014
Dear sir,
I kindly requsted you to please rectify my problem details are given here undser
There is a Service Bill of Rs.50,000 & Service Tax added 10.30% & We have to deduct TDS @ 2%. Assume that Service Tax Input Credit available to Ur Co. What is the Journal Entry for this?
P ASHOK KUMAR
ACCOUNTNAT
CAclubindia
