LIVE GST Certification Course by CA Arun Chhajer begins 27th April. Register Now!!

Provided service with service tax,received payment-tds dedu

M R Singhal (Consultant) (24 Points)

27 September 2011

We have provided our Manpower Recruitment Services to XYZ Company and raised invoice as below :

Placement Cosnultancy charges :35217.00

Service Tax @ 10% : 3522.00

Education Cess @ 2% : 70.00

Sec. Education Cess @ 1% : 35.00

Total Amount : 38844.00

We received payment of34960.00 after deduction of TDS of 3884 by the party i. e. XYZ Company. How to show this Payment receipt entires in Tally.ERP 9, please explain so that all entries related to Sales, Bank, Service Tax, Education Cess, Sec. Edcuation Cess, TDS etc. are taken care of. Please guide me.

Reply
Follow
Share

4 Replies

ashish gupta ( student) (1922 Points)
Replied 28 September 2011

1. At the time of raising invoice

XYZ Co. A/c Dr. 38844

To Consultancy Charges 35217

To Service Tax Payable 3522

To Education Cess payable 70

To SHE Cess Payable 35

2. At the time of receipt

Bank A/c Dr. 34960

TDS Receivable A/c Dr. 3884

To XYZ Co, 38844

ACCOUNTANT (Student) (559 Points)
Replied 28 September 2011

The issue of TDS on service tax is getting hotter by the day. This issue got fuel with the issuance of a circular by the CBDT. In this circular, board has clarified that tax deduction at source (TDS) under sections 194-I of Income Tax Act would be required to be made on the amount of rent paid/payable without including the service tax. [Circular no. 4 dated 28-4-2008]

After this clarification, every body was of the view that the principle enunciated by this circular is applicable to all the payments made by the assessee and accordingly no TDS is deductible from on the part of service tax whether it is professional's bill or contractor's bill.

1 Like

Ateeq (CA - Final) (213 Points)
Replied 10 October 2011

Originally posted by : ashish gupta
	1. At the time of raising invoice XYZ Co. A/c Dr. 38844 To Consultancy Charges 35217 To Service Tax Payable 3522 To Education Cess payable 70 To SHE Cess Payable 35 2. At the time of receipt Bank A/c Dr. 34960 TDS Receivable A/c Dr. 3884 To XYZ Co, 38844