Cenvet Credit rule

This query is : Resolved

Sunil Kumar Jha (Querist)
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10 February 2010 We have been paying service tax amounting Rs 100000 monthly basis and also we provide service on which we are collecting service tax amounting Rs 60000
pls advice rgarding input credit if there is any formula for calculation pls illustrae with example if any.houever we are not keeping accounts regading the above

Selvakumar Selvaraj

Selvakumar Selvaraj (Expert)
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10 February 2010 To avail input credit of service tax first we should have used that input service to provide taxable output service. Besidets you should have paid the input service tax before you caim.

Regarding payment part.For example we take April'2010.

If April'10 income received in May'10 then the input pertains to that service could be adjusted with the output service tax collected in May'10.

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CA Amit Kumar Hallen

CA Amit Kumar Hallen (Expert)
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10 February 2010 Mr Jha

whenever you are selling your service make entry

Party Dr 110
to S T receivable Dr 10
to Sale 100

Whenever u are getting payment than pass the entry

Bank Dr 110
S T Receivable Dr 10
To S T Received 10
to Party 110

In case of purchase

Purchase Dr 100
S T Payable Dr 10
To Party 110

Whenever u are making payment than pass the entry

party Dr 110
S T Paid Dr 10
To S T Payable 10
To Bank 110

Keep all the account of S T Paid, Payable, Received & receivable under current liabilities.

At the end of the month transfer the S T Received to S T Paid account or vice versa u will get the amount payable/ receivable.

The balance lying in S T Payable or Receivable shows the amount due.

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