Service tax
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
05 February 2010
Hi Sir,
Can you please tell me what is the journal entry of service tax passed when the bill is issued to the Service receiver ?
Can you please tell me what is the journal entry of service tax passed when the bill is issued to the Service receiver ?
05 February 2010
Service receiver a/c Dr
To Service charges Recd
To Service tax receivable
TO E.cess receivable
TO SHE.cess receivable
To Service charges Recd
To Service tax receivable
TO E.cess receivable
TO SHE.cess receivable
Message likes :
1 times
07 February 2010
The entry provided by Mr. Ramesh is correct and gives the same net result as mine.
However based on my Experience, I suggest the following entry can be made in order to have a difference between the service liability for the month which arise on the receipt of the amount from the service receiver and the service tax amount for which the receipts have not received till date.
The logic for this is that in Service the liability to pay service tax arise on the receipt of payment from the service receiver. Also, it benefits in making reconciliations of service tax liability during audits.
Debtor Dr
Service Income Cr
Service Tax Suspense Cr
Edu Cess Suspense Cr
H Edu Cess Suspense Cr
When we receive money from the debtor we will pass two entries:
Bank Dr
Debtor Cr
Service Tax Suspense Dr
Edu Cess Suspense Dr
H Edu Cess Suspense Dr
Service Tax Payable Cr
Edu Cess Payable Cr
H Edu Cess Payable Cr
However based on my Experience, I suggest the following entry can be made in order to have a difference between the service liability for the month which arise on the receipt of the amount from the service receiver and the service tax amount for which the receipts have not received till date.
The logic for this is that in Service the liability to pay service tax arise on the receipt of payment from the service receiver. Also, it benefits in making reconciliations of service tax liability during audits.
Debtor Dr
Service Income Cr
Service Tax Suspense Cr
Edu Cess Suspense Cr
H Edu Cess Suspense Cr
When we receive money from the debtor we will pass two entries:
Bank Dr
Debtor Cr
Service Tax Suspense Dr
Edu Cess Suspense Dr
H Edu Cess Suspense Dr
Service Tax Payable Cr
Edu Cess Payable Cr
H Edu Cess Payable Cr
Message likes :
1 times
07 February 2010
Yes.Mr.Rahul is point also should be considered we can maintained suspense account because of Service tax payable based on relisation
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