Accounting for service tax refund
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
19 June 2013
Dear Expert,
We have created a reserve for service tax refund receivable (refund application is due with the govt.). This is required as per our Company global policy. while creating a reserve we debited the expense.
But we got a refund against the above refund receivable. so from a accoutning point of view, should we credit the expense or treat it as other income.
Kindly guide on the above query
We have created a reserve for service tax refund receivable (refund application is due with the govt.). This is required as per our Company global policy. while creating a reserve we debited the expense.
But we got a refund against the above refund receivable. so from a accoutning point of view, should we credit the expense or treat it as other income.
Kindly guide on the above query
29 June 2013
No. since you are eligible for refund. starting itself you need to debit the service tax receivable, not to expenses
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