input tax credit
This query is : Resolved
15 January 2011
how to do the accounting treating of input tax credit in services?
15 January 2011
Input credit need to take on payment basis( after making payment for the bill)
you can create 2 different account for each credit
1. Cenvat -Service tax (Interim)
2. Cenvat- Education cess (Interim)
3. Cenvat- SHE Cess (Interim)
these 3 accounts can be used while taking credit & create follwoing
1. Cenvat -Service tax (Final)
2. Cenvat- Education cess (Final)
3. Cenvat- SHE Cess (Final)
once the payment made for bills the credit can be transfer thses accounts and utlised for payment of service tax
you can create 2 different account for each credit
1. Cenvat -Service tax (Interim)
2. Cenvat- Education cess (Interim)
3. Cenvat- SHE Cess (Interim)
these 3 accounts can be used while taking credit & create follwoing
1. Cenvat -Service tax (Final)
2. Cenvat- Education cess (Final)
3. Cenvat- SHE Cess (Final)
once the payment made for bills the credit can be transfer thses accounts and utlised for payment of service tax
15 January 2011
Accounting Treatment of Service Tax
At the time of booking of revenue
Debit - Customer (By gross invoice amount)
Credit - Income (By amount net of service tax)
Credit - Service Tax Liability (By service tax amount)
At the time of receipt of payment from customer
Debit - Bank a/c
Credit - Customer a/c
and
Debit - Service tax liability a/c
Credit - Service Tax payable a/c
At the time of payment of service tax
Debit - Service Tax Payable a/c
Credit - Bank a/c or service tax credit a/c
At the time of booking of revenue
Debit - Customer (By gross invoice amount)
Credit - Income (By amount net of service tax)
Credit - Service Tax Liability (By service tax amount)
At the time of receipt of payment from customer
Debit - Bank a/c
Credit - Customer a/c
and
Debit - Service tax liability a/c
Credit - Service Tax payable a/c
At the time of payment of service tax
Debit - Service Tax Payable a/c
Credit - Bank a/c or service tax credit a/c
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