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Service tax on telephone bills - journal entry

Merina (Student) (310 Points)

12 June 2013

Hi the company I am auditing has service tax registration. They need to take credit of service tax paid on telephone bills against the service tax payment to Government. Kindly let me know the journal entry for service tax on Telephone bill payment and also during the payment to service tax to Government.

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Devendra (Chartered Accountant) (4775 Points)
Replied 12 June 2013

Following are the Journal Entries to be passed :-

Telephone Exps A/c Dr. 1000

Service Tax Input A/c Dr. 124

To Cash / Bank A/c 1124

( Being telephone exps. paid including Service Tax )

Cash / Bank A/c Dr. 10000

To Professional Service Provided A/c 8900

To Service Tax Collected A/c 1100

( Being Professional service rendered and Service Tax charged and collected )

Service Tax Collected A/c Dr. 1100

To Service Tax Input A/c 124

To Service Tax Payable A/c 976

( Being provision made for service tax payable )

Service Tax Payable A/c Dr. 976

To Cash / Bank A/c 976

( Being Service Tax Liability paid )

Rate of Service tax : 12.36 %

Regards,

Devendra Kulkarni

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Merina (Student) (310 Points)
Replied 12 June 2013

Thanks a lot . This firm has not yet filed the service tax payments for the last two quarters (Oct 2012 to Mar 2013). Now only they came to know that service tax paid on telephone bills can be claimed. Can they claim the service tax paid on the first two quarters ( April - Sep ) on telephone bill against the service tax payment of the last two quarters? What about the telephone bills paid in previous years?

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