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How to pass entries in accounts

Deepak Tapse (Accounts Manager - Taxation) (1771 Points)

16 December 2015

in case of builder construction of res. complex. service tax liability is to be paid based on demand note raised. In this case advance against flat booking is received from time to time. How to pass entries in accounts and how to show service tax liability based on demand note

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3 Replies

Ajay Chandramouli (Article Assistant ) (334 Points)
Replied 16 December 2015

Dear Deepak

It is suggested that every time you recive advance till the final Instalment claculate the service tax laibilty on advance on cum tax basis and pay it

For clear understanding if the total amount to be received for a Flat is Rs 50,00,000 + ST ( @ 14% 700000) it is Rs recviable in 2 installments then

At the time of First instalment

Bank A/c Dr 25,00,000/-

To Customer A/c 2192982 (2500000*100/114)

To ST payable A/c 307018

At the time of Second instalment - Same entry as above

At the time of recipt of servive tax Amount

Bank A/c Dr 7,00,000

To Customer A/c 7,00,000

At last

Customer A/c 50,00,000

To Sale of Flats A/c 50,00,000/-\

Hope it is clear

Deepak Tapse (Accounts Manager - Taxation) (1771 Points)
Replied 16 December 2015

Thanks Mr. Ajay In this regards, suppose demand raised Rs.30 L and customer given us 25 Lakhs, ST To be paid on demand i.e. 30 L . In this case how to pass entries