Reverse charge of service tax on manpower supply
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
04 August 2015
I have received an Invoice from Manpower Supply Agency where Service Provider is an Individual and Service Receiver is a Corporate. Accordingly as per Reverse Charge Mechanism Company will pay Service Tax at 14% on behalf of Service Provider. Which one of the following is the correct accounting Treatment for the same.
Say For Eg. Invoice Amount is Rs. 30000
TDS at 1% Rs. 300
Service Tax 14% Rs.4200
1) Wages A/c Dr 30000
Input S.T. Deferred Dr. 4200
Manpower Supply agency Dr 300
To S.T. Deferred Payable 4200
To Manpower supply Agency 30000
To TDS payable 300
OR
2) Wages A/c Dr 25800
Input S.T. Deferred Dr 4200
Manpower Supply agency Dr 300
To Manpower supply Agency 30000
To TDS payable 300
So in short at what amount we will book the expense in Books of Accounts. At Invoice Value of at Invoice Value- S.T. amount.??????
Say For Eg. Invoice Amount is Rs. 30000
TDS at 1% Rs. 300
Service Tax 14% Rs.4200
1) Wages A/c Dr 30000
Input S.T. Deferred Dr. 4200
Manpower Supply agency Dr 300
To S.T. Deferred Payable 4200
To Manpower supply Agency 30000
To TDS payable 300
OR
2) Wages A/c Dr 25800
Input S.T. Deferred Dr 4200
Manpower Supply agency Dr 300
To Manpower supply Agency 30000
To TDS payable 300
So in short at what amount we will book the expense in Books of Accounts. At Invoice Value of at Invoice Value- S.T. amount.??????
04 August 2015
Book the expense at invoice value. The first entry is the right one.
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