journal entry

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subhash (Querist)
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20 March 2009 I m a service provider to a wharehouse where i reimbursed my expenses which i incurred on behalf of my client. my Que is that what JV i pass in my books of accounts.
(1. i had pais salary Rs 250000/- in which Rs. 180000/- should be reimbursed from my client, same repair expenses 145000/- from which 85000/- belongs to client.

2. i raise the bill of my services regarding the above expenses which i have incurred.by charging ser. tax with my service tax.

i m registered in ser tax.

Manmohan ACA, CS

Manmohan ACA, CS (Expert)
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20 March 2009 Pass following entry
Salaries A/c Dr. 70000
Repairs A/c Dr. 60000
Client A/c dr. 265000
To bank A/c 395000

Often, a service provider incurs some expenditure on behalf of service receiver and then recovers the amount from him. Such expenditure is not part of service provided by him to service receiver, but is incurred by him as per business practice or convenience.
Rule 5(2) provides that the expenditure or costs that a service provider incurs, as a pure agent of the client, shall be excluded from the value if such service provider fulfils prescribed conditions.

CA Tilak Raj Sharma

CA Tilak Raj Sharma (Expert)
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20 March 2009 The journal entry will be as below:

ABC (Your client account) Dr. 265000
To Salaries Account 180000
To Repair Account 85000

Or

Sales Account Dr. 265000
To Salaries 180000
To Repair 85000

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