Journal entry under 100% reverse charge mechanism
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
11 May 2014
Journal entry under reverse charge mechanism when service receiver receive service.
Bill amount is 10 (lacs)
Thanks in advance
Bill amount is 10 (lacs)
Thanks in advance
12 May 2014
When you receive the Service from Foreign Vendor.
Expense Account………………………………..Dr
To Party
To TDS Payable
ST will be due on making payment or 6 months from the invoice.
When you make payment to vendor
Party Account………………………………..Dr
Service Tax Input but Not Due…………….Dr
To Bank
To Service Tax Payable
When you make Service Tax Payment
Service Tax Payable Account …………………….Dr
To Bank
For Cenvat
Service Tax Input Account………………………..Dr
To Service Tax Input but not due
Please note that you can not utilise the input credit for payment of service tax arising out of RCM. Further you can take the credit of ST paid only after making the payment.
Expense Account………………………………..Dr
To Party
To TDS Payable
ST will be due on making payment or 6 months from the invoice.
When you make payment to vendor
Party Account………………………………..Dr
Service Tax Input but Not Due…………….Dr
To Bank
To Service Tax Payable
When you make Service Tax Payment
Service Tax Payable Account …………………….Dr
To Bank
For Cenvat
Service Tax Input Account………………………..Dr
To Service Tax Input but not due
Please note that you can not utilise the input credit for payment of service tax arising out of RCM. Further you can take the credit of ST paid only after making the payment.
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