Service tax accounts

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Querist : Anonymous

Querist : Anonymous (Querist)

25 June 2015 Dear Sir,
Please Help Me, on that Question
What should be under in 'Service Tax Credit Available' In Tally ?

Jayant Bothra

Jayant Bothra (Expert)
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25 June 2015 Dear,

Please be specific in your question.

If required you can email me personally.

Thanks
CA. JAYANT BOTHRA
email: ca.jayantbothra@gmail.com

Querist : Anonymous

Querist : Anonymous (Querist)

14 June 2017 I think his questions about the nature of service tax credit available, on the the of creation account in tally .

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)
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24 July 2025 Great question!

In **Tally ERP** (especially older versions used during the **Service Tax era before GST**), the field **“Service Tax Credit Available”** is part of the **Service Tax Reports or Input Credit reports**. This section helps track how much **CENVAT credit** (input service tax) is available for **set-off against your output service tax liability**.

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### ✅ What Should Be Shown Under **"Service Tax Credit Available"** in Tally?

This should include:

| Type of Entry | Description |
| ----------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------- |
| ✅ **Service Tax paid on input services** | Tax paid on services you’ve used for your business (e.g., telephone bills, security services, professional fees, GTA under reverse charge, etc.) |
| ✅ **Service Tax paid under Reverse Charge Mechanism (RCM)** | If you paid service tax on reverse charge basis (e.g., manpower supply, legal services), and are eligible to claim input credit |
| ✅ **Opening balance of unutilized CENVAT credit** | If there was a balance from the previous period carried forward |
| ❌ **Not included:** | Service tax paid on ineligible services (like for personal consumption, exempt services, or services with abatement conditions that disallow credit) |

---

### 📚 Tally Entry Example:

When you book an expense with service tax (say, telephone expense), your journal entry might be:

```text
Telephone Expenses A/c Dr. ₹10,000
Input Service Tax A/c Dr. ₹1,400
To Creditor/Supplier A/c ₹11,400
```

This **₹1,400** will reflect under **"Service Tax Credit Available"**.

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### 🔎 To View This in Tally:

> Go to:
> **Display > Statutory Reports > Service Tax Reports > Input Credit Summary**

Here, Tally shows:

* **Total Input Credit available**
* **Credit utilized**
* **Balance credit (carried forward)**

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### 📝 Important Notes:

* You can **only use this credit** to offset **output service tax liability**.
* Credit must be backed by **valid input invoices**.
* Credit on services related to **exempt outputs** or **personal use** is **not allowed**.

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### ✅ In Summary:

> “Service Tax Credit Available” in Tally refers to the **eligible CENVAT credit** of **input services** (and sometimes capital goods), which can be set off against your **output service tax liability**.

Let me know if you’d like a **step-by-step guide with screenshots** on how to **enable and manage service tax in Tally ERP**!

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