service tax on provision
This query is : Resolved
17 November 2010
Experts,
If I have availed maintenance services but bill is not received on the last day of the month.
Services 22000
Ser. Tax 2200
EC @ 3% on ST.
1)How to make provision while making monthly P/L and BS?
2) Shld this entry be reversed in the following month?
3) Shld this service tax considered while working the monthly service tax liability to be deposited by 5th of the following month?
thanks
sweta
If I have availed maintenance services but bill is not received on the last day of the month.
Services 22000
Ser. Tax 2200
EC @ 3% on ST.
1)How to make provision while making monthly P/L and BS?
2) Shld this entry be reversed in the following month?
3) Shld this service tax considered while working the monthly service tax liability to be deposited by 5th of the following month?
thanks
sweta
17 November 2010
You may adopt suitable method for preparing internal records but such type of reversals will create unnecessary harrasment. Better you give its effect separately.
In my opinion Service Tax Credit will be available only when you would have made payment to the service provider.
In my opinion Service Tax Credit will be available only when you would have made payment to the service provider.
Message likes :
1 times
17 November 2010
Swetha,
Service tax is destination based tax. The availment of ST is on payment made to the vendor.
1.Genetally in MNC where monthly books are closed & prepare the P&L BS etc., they follow the procedure of passing a provision of known expenses.
2.Yes the entry is reverded in the next month when you book the actual entry. The reversal is to give nulify for the previous provision entry.
3.You cannot take credit based on the provision entry. ACTUALLY SERVICE TAX CREDIT IS AVAILABLE ONLY ON PAYMENT BASIS.
Eg.AMC bills dated 01.10.2010 for Rs.100000+10300=110300 is accounted on 01.10.2010, but the payment is made on 01.01.2011, then credit is available for the month of jan 2011.
I hope you are clear.
Service tax is destination based tax. The availment of ST is on payment made to the vendor.
1.Genetally in MNC where monthly books are closed & prepare the P&L BS etc., they follow the procedure of passing a provision of known expenses.
2.Yes the entry is reverded in the next month when you book the actual entry. The reversal is to give nulify for the previous provision entry.
3.You cannot take credit based on the provision entry. ACTUALLY SERVICE TAX CREDIT IS AVAILABLE ONLY ON PAYMENT BASIS.
Eg.AMC bills dated 01.10.2010 for Rs.100000+10300=110300 is accounted on 01.10.2010, but the payment is made on 01.01.2011, then credit is available for the month of jan 2011.
I hope you are clear.
Message likes :
1 times
18 November 2010
thanks, could you pls mention the provision entry and its reversal in the next month wrt the below issue
If I have availed maintenance services but bill is not received on the last day of the month.
Services 22000
Ser. Tax 2200
EC @ 3% on ST.
thanks
If I have availed maintenance services but bill is not received on the last day of the month.
Services 22000
Ser. Tax 2200
EC @ 3% on ST.
thanks
18 November 2010
Debit Maintenacne Rs 24266
Credit Vendor Rs.24266
Provision entry
When you receive the bill,
First reverse the previous months entry & then only you can pass the actual bill amount So
Debit vendor Rs 24266
Credit maintenceRs24266
Since this is provisional entry the amount may also vary depending upon the actual invoice.
Debit maintenance Rs.22000
Debit Input ST Rs.2266
Credit Vendot Rs.24266
Input ST may be claimed in the month of payment to Vendor.
Credit Vendor Rs.24266
Provision entry
When you receive the bill,
First reverse the previous months entry & then only you can pass the actual bill amount So
Debit vendor Rs 24266
Credit maintenceRs24266
Since this is provisional entry the amount may also vary depending upon the actual invoice.
Debit maintenance Rs.22000
Debit Input ST Rs.2266
Credit Vendot Rs.24266
Input ST may be claimed in the month of payment to Vendor.
Message likes :
1 times
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Off Market debit and credit transaction
- Itr 1 processing
- ITR 2 Short Term gain & Long term gain
- Reporting Income under Section 44ADA
- Showing Gift from relative in ITR for this year
- Form 10E u/s 89(1). Need clarification because experts opinions differ !!!!
- ITR 1: Details for showing Exempt Income
- ITR returnFY25-26
- INCOME TAX ON REDEVELOPEMENT OF FLAT
- ITR selection for salaries and capital gain less than L
- NRE Interest Income applicability
- Opting out" of regime provided under subsection (1A) of Section 115BAC but Form 10IEA is not filed.
- Query regarding TDS on EPFO Higher Pension Arrears*
- Gst invoice numbering and delivery challan numbering
- Sales amount in Gstr1
- E Commerce GSTR1 & 3B how to file
- GST Cancellation without jurisdiction
- Legal Opinion on Registrar's Refusal to Investigate a Society for Non-Renewal and Non-Compliance
- GST Refund_RFD-01
- Form10BD was uploaded successfully without any Error but after 24 hours, Form10BE are not available
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
