Service Tax accounting Treatement

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anand babu (Querist)
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22 November 2007 Ima CA Student Anand Babu M hereby requesting you to clarify the doubt reg.Service Tax Accounting Treatment.

1.Entry for Service Tax when Invoice raised ?

2. Entry for Receipt when Debtor make Payment ?

3.Under what a/c head Service Tax receivable from debtor when Invoice Raised

4.Entry for Service Tax Payment made
5.how con we recognise the service revenue in respect of service rendered ? and does service Tax include in Service Revenue ?

anand babu

anand babu (Querist)
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22 November 2007 I am hereby requesting you to reply as early as possible

S.RAVICHANDRAN

S.RAVICHANDRAN (Expert)
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22 November 2007 When Service Tax is invoiced, the account to credit is " Service Tax Payable ". ie., Debtor account debited with the whole value of the transaction and Sales and Service Tax parts are credited respectively.

The account is classified as Current Liability for grouping of accounts.

When the tax is paid, the payable is accounted is debited and thus squarred off.

There is no separate entry for receipt of service tax because the debtor account is totally debited at the time of invoicing and totally credited when the payment is received.

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