Journel entry

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This query is : Resolved

rahul singh (Querist)

07 August 2014 manpower contractor raised a invoice to us rs.112360 inclusive service tax rs. ?12360@12.36%. so what should I pass journel entry under reverse charge by Ganeshbabu K on07 August 2014 Dr.Manpower Charges A/c 100000 Dr.Service tax input A/c 12360 Cr.Manpower Contractor name (balance fig) Cr.TDS Payable Contactor 194C 2%/1% on 1lakh but under reverse charge we have to pay 75% service tax to directly govt. in this case how can we pass above entry

Ganeshbabu K

Ganeshbabu K (Expert)

07 August 2014 Under reversecharge mechanism service provider will charge 12.36% of service tax only by company or LLP
.
.
If other service provider charged complete 12.36% of service tax means you are not company or LLP
.
.
Okay..if you are a company or llp but receied manpower charges bil including complet 12.36% of service tax from individual,firm
.
.
As per reversecharge mechanism your legal liability is to pay 75% of service tax directly to dept.
.
So
1)Pay only 25% of service tax i.e, 3.09% of service tax to service provider
2)pay balance 75% of service tax directly to dept
.
3)pass reverse entry for 75% of service tax which is in bill
Dr.Service provider
Cr.manpower charges

Ganeshbabu K

Ganeshbabu K (Expert)

07 August 2014 Entries if bills are under RCM...
.
TDS IGNORED
.
Dr.manpower charges
Dr.Service tax input(3.09% of service tax)
Cr.service provider
.
.(as per invoice on date of invoice)
Dr.Service tax defered input
Cr.RCM Service tax payable
(service tax payable as per RCM on date of invoice)
.
.
Dr.RCM Service tax payable
Cr.bankA/c
(on payment of RCM Payable)

Dr.Service tax input
Cr.Service tax defered input
(Availed input on payment of RCM Service tax)

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