Rate of applicability of service tax

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

18 April 2012 Dear Members good morning to all,
I have a query regarding the service tax rate applicability in case of making a provision for the F.Y 2011-12 in respect of audit fees payable. Generally provision is to be made at the end of F.Y 2011-12 for the Audit fees payable. There is a change in service tax rate w.e.f 1st April 2012. Generally the statutory auditor will raise bill in the month of say June 2012. So then service tax is payable @ 12.36%. Then for making provision what rate of service tax to be taken whether at 10% or 12%. What should be the journal entry for making the provision for audit fees.

Ravi Jhamb

Ravi Jhamb (Expert)
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18 April 2012 You will make the provision for 12.36% Statutory auditing. The Journal Entries are:-

Audit Fees A/c Dr.
To Audit Fees Payable A/c

Audit Fees Payable A/c
To Bank A/c

CA Kishore Tallam

CA Kishore Tallam (Expert)
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18 April 2012 First of all, you should not assume service tax for making provision.
You need to provide only for audit fees and not for service tax because u dont know whether he will give u backdated invoice (10%) or current invoice (12%).
Hence, make a provision only for audit fee and deduct TDS accordingly on that.

CA Nikhil Jhanwar

CA Nikhil Jhanwar (Expert)
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18 April 2012 Agreed there is no need to make provision for service tax in this case

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