Classification of expense

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

15 May 2012 In case of Service provider whether Service tax amount passes through the profit & loss a/c or not

If it is a P & L Item under which head it will be shown i.e.,under operating or administrative or other expenses

Amol S Joglekar

Amol S Joglekar (Expert)

15 May 2012 For a service provider it is TRUSTEE function. Better if it is shown under liability. (Few people book the service at gross value [nclusive of service tax]. In that case they debit service tax paid a/c

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)

15 May 2012 Dear Author,

If you are eligible for Cenvat Credit of Service tax paid then the amount of Service tax paid will be debited to "Cenvat Credit Receivable A/c" under Loans & Advances".

If you are not eligible for Credit then expense shall be booked at gross amount inclusive of Service tax under respective head of expense.

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