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Accounting Entry for deferment of sales tax

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This query is : Resolved

CA. C.N.PATIL (Querist)
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12 September 2009 dear sirs ,
Plz suggest me the accounting treatment of defferment of sales tax , since there is a opening balance of DFT SALES TAX IN Balance sheet & in current year , concern has paid the tax out of it , how to adjust the balance ? if expensed in P&L , WHAT IS THE ENTRY ?

vinod kumar lalwani

vinod kumar lalwani (Expert)
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30 September 2009 if company has opted composition scheme then it will be an expenses in profit and loss account otherwise it would be only a discharge of liability and after payment only that laibility willl be removed from balance sheet.

the entry would be in first case:-

sales tax Dr.
to cash

Profit and loss a/c Dr.
to sales tax

as sales tax has been paid then defferd sales tax will get reduced.

in second case the entry would be:-

deffered sales tax a/c Dr.
to cash

as above again deffered sales tax will get reduced.

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