12 August 2011
Dear Experts, I have entered a service tax invoice as below for claiming input credit-
Dr Telephone Exps. Dr Input Serice Tax Cr Bharti Airtel Ltd.
after this entry i founded in PL account that expense show only telephone exps. amount, not including with service tax. But i pay total bill amount including service tax (telephone exps.+input service tax).
Plz suggest that I am doing something wrong. I am claiming only input service tax and not raised any Tax invoices. What will be the nature of that input service tax amount i.e. expenses or current assets...
12 August 2011
1. Are u a Service provider and do you have any service tax liability? If Yes, Input service tax paid can be set off against the output service tax liability. If after set off, any balance remains in input service tax a/c, show it as Current Assets under Advances.
2. If u are not service provider and u do not have any liability for service tax payment, do not pass separate entry for input service tax, debit Telephone exp with the gross amount (Telephone exp+ input service tax)
CAclubindia
