Accounting policies

This query is : Resolved

Amit Nandy (Querist)
Follow

26 September 2016 please let me know the following

If advertisement exp Rs-100000/- & service tax Rs-15000/-when we make the payment after deduction of TDS,we pass the entry

Adv.... .Dr100000
Service Tax...Dr15000/-
TDS @2% 2000/-( TDS deducted Gross Value- Service Tax *2%)
To Party 113000/-

Is the above entry correct.There is any violation of AS1

Regards
Amit Nandy

Sandeep Dharar

Sandeep Dharar (Expert)
Follow

27 September 2016 No the entry is not correct. The entry should be:-

Adv. 100500
ST 14000
KKC 500
To TDS 2000
To Party 113000.

Explanation:- U can claim Cenvat of Service Tax and Krishi Kalyan Cess, hence both should be debited(or transferred to ST/KKC Input tax credit). Swcch Bharat Cess Cenvat is not available to claim as ITC by the assessee so I added it to value of advertisement, U can also transfer to SWC ITC account if u want, but remember we cant' claim credit of it. TDS is ur liability to pay, so it should be credited, instead of debit.