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Tally ERP 9 - Voucher Entry

BASNAIR (Manager-Accounts & IT Systems) (138 Points)

25 January 2011

Dear All,

I am using tally ERP 9 LATEST VERSION. Please check the entry is correct or not. We are issuing bills for payment (our is Engineering Consultancy firm) the bill with service tax ....

Dr. Party A/c 110300/- (Sundry Debtor)

New Ref. 1101 (Bill No)

Cr. Professional Fee (Sales A/c)100000/-

(Method of adjustment New Ref. Jrnl/5-1 type of service : Taxable ; category : consulting engineer ; Service Amnt100000/- Amount incl of tax110300/-

Cr. Service Tax 10,300/-

the entry is over. now i have rcd the payment

RECEIPT

Cr. Party a//c 110300/-

Dr. TDS11030/-

Dr. Bank A/c99270/-

THIS ENTRY IS OK IF NOT PL EXPLAIN.

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11 Replies

Pankaj Arora (Learner) (3134 Points)
Replied 25 January 2011

You should select ref. no. 1101 same ref. no. of 1^st entry. And it should be same in Receipt entry too

praveen (Chartered Accountant) (6971 Points)
Replied 25 January 2011

yes if you give the correct referfence no in tally when you have the receipt it must be correct

s (-) (216 Points)
Replied 25 January 2011

Eg.: Prof. fees recd: 100/-, ST=10.30%

1) When you raise Bills,

Party A/c Dr. 110.30

To Prof. fees (Sales) 100

To ST Receivable 10.30

Note: Though Service tax is leived at the time of supply of services, the same is to be paid ONLY ON RECEIPT Basis.

2) When the Payment from party is received,

Bank A/c Dr. 108.09

Adv Tax & TDS (A.Y. 20XX) Dr. 2.21

ST Receivable A/c Dr. 10.30

To Party A/c 110.30

To ST Payable A/c 10.30

Note: The "ST Receivable A/c" will be settled, and balance in "ST Payable" will be outstanding amount to be paid as ST.

If you wish to take CENVAT Credit in case of Input Services,

If expenses are 50/-, ST = 10.30%

3) At the time of Booking Expenditure

Expenditure A/c Dr. 44.85

ST Receivable A/c Dr. 5.15

To Party A/c (Creditor) 49

To TDS (2%) 1

Note: You cannot take CENVAT Credit unless you actually pay for the Expenditure

4) At the time of Payment to Creditor

Party A/c (Creditor) Dr. 49

ST Payable A/c Dr. 5.15

To Bank A/c 49

To ST Receivable A/c 5.15

Note: As you have now paid for the Service including ST, you are eligible to avail CENVAT Credit.

5) At the time of making payment of Service tax to bank

ST Payable A/c Dr. 5.15

To Bank / Cash 5.15

Note: At the end of year, your ST Receivable A/c will be squared off, and ST Payable A/c shows your actual ST liability after availing CENVAT Credit.

2 Like

BASNAIR (Manager-Accounts & IT Systems) (138 Points)
Replied 25 January 2011

thank you thank you very much for the detailed reply.

pl explain these also :

1) there is no need the ref. no.

2) service tax payable (in current liabilities)

3) service tax receivable (service tax )

s (-) (216 Points)
Replied 25 January 2011

1) You will need Ref. No. in the case you are first passing a JV to recognise Sale or Exp, etc and then at the time of Receipt/Payment, you pass Receipt / Payment Entry.

When you use Ref. No., you can keep detailed Bill-wise track of all the monies received and payments made to each party and for each bill. This is more useful in the cases where cash / trade discount is involved and Vatav / kasar is to be written off.

2) Service Tax Payable in current liabilities shows your actual Service Tax Liability after Utilising CENVAT Credit.

3) Service Tax Receivable Account serves as control account, so that you dont miss out calculation of Service Tax or Cenvat Credit.

Eg. If you don't recognise ST Receivable account at the time of booking JV for expenditure, it is possible that you may miss out to take CENVAT Credit.

Also, not all expenses involve CENVAT Credit. In such cases, it will be difficult to keep track of CENVAT Credit. Hence, this CONTROL Account is involved, as it helps to keep tract of (1) ST on Services Rendered because we recognise it as income when bill is raised, but the liability occurs when payment is received. It is possibile that these two events viz. Recognition of income and receipt thereof may take place in Two different reporting periods. Now, if you don't Credit the Service Tax Receivable Account, you will be increasing the amount of sales, and will have to pay income tax more.

(2) CENVAT Credit is to be taken only when you make actual payment of expense. When you book expense on, say March 29, but actually you pay on 2nd April, you cannot claim the CENVAT Credit in the period ended March 31, Hence, also you will be claiming higher expenditure, on which you are claiming CENVAT Credit in future. Hence, (i) That portion of CENVAT Credit will be disallowed by ITO and (ii) CENVAT Credit will be disallowed for the Period ended March 31. Hence, to overcome these difficulties, the CONTROL Account is Debited and Credited, the net effect being, the ST Receivable account will square off. If it does not square off, it means you have made some error.

1 Like

BASNAIR (Manager-Accounts & IT Systems) (138 Points)
Replied 25 January 2011

Dear (S) Gentleman,

Thanks your great valuable information, yet i am not using the Service Tax Receivable, i fully agree with you with the Service Tax Receivable. Can I get your give your email id pl. send to asbnair @ gmail.com

Bye

Babu Nair

s (-) (216 Points)
Replied 27 January 2011

I also request you to consult your CA regarding the Entries you plan to pass.

You CA might have some suggestions to make. In that case, it is better to follow his advice at early time than changing all the entries at the time of finalisation & audit time.

1 Like