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service tax

leela kumar (accountant) (33 Points)

03 January 2011

hai sir we are providing crusher work at diffrent places but recently we are purchases some items also provide the are purchase at A.P. STATE AND M.P SO we are paid vat as well as ST.so please tell me how to take the that entries and how to entred in tally ( vat @ 5% )

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2 Replies

CA P KARTHIKA (Chartered Accountant) (715 Points)
Replied 07 January 2011

If you charge service tax on your clients then the service tax which you paid can be used as credit and you can account service tax as follows:

(Value of purchase of material) Material a/c Dr

Service Taxa/c Dr

To Supplier a/c

Similarly if you charge vat in your bill you can account it like service tax and claim as credit from vat payable...

Can you explain what actual service you do (nature of service and what you charge on the bill amount like service tax or vat)?

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Sabaresh (Credit Manager ) (199 Points)
Replied 08 January 2011

As per the explanation given by you , as u r providing crushing work , u shall be charging service tax to ur customers . And in this case , if the vat purchases made by you directly relate to ur business , you can claim input .

For this , the entry at the time of paying service tax on purchases:-

Purchases A/c Dr. (excluding Service Tax Amount)

Service Tax Input A/c Dr. (can be grouped under Current Assets)

To Creditor/cash/bank

Regarding VAT , if you charge vat on ur bill to customer , then while filing VAT return monthly , u can claim input and the entry shall be same as above .

Purchases A/c Dr. (Exclusive of S.T. and VAT)

Service Tax Input A/c Dr.

VAT Input A/c Dr/

To Creditor/Cash/Bank A/c

Both Service Tax and VAT Input accounts may be classified under Assets.