Service tax on security service providers

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MANESH WAGHMARE (Querist)
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31 August 2013 Kindly suggest the journal entry of below transactions.

We received the bill of Security charges from the Security Service Provider. They charge us 30,000/- Basic and 25%(3.09) Service tax as per (Notification 45-46 dated 07/08/2012) We have to deduct TDS 1% in Case of INDIVIDUAL Or 2% Other than INDIVIDUAL on Rs 30,000.

CA Suresh Jain

CA Suresh Jain (Expert)
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01 September 2013 The amount on which TDS is to be deducted is amount inclusive of Service Tax charged by service provider. The amount of service tax paid by you under RCM is not to be included.

MANESH WAGHMARE

MANESH WAGHMARE (Querist)
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01 September 2013 But what will the effect of remaining 75% sharing in journal entry.

Dr Security Charges 30,000

Dr ST Receivable@3.09(25%)927

Cr TDS On Contractor 619

Cr Party A/c 30308.

But what about the 75% Contribution of Service Receiver in the said journal Entry.

I just want to know that what is the JV Entry for 75% Contribution of Service Receiver?

CA Suresh Jain

CA Suresh Jain (Expert)
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02 September 2013 You can pass the following entry instead :-

Security Charges Dr. 30,000.00
Service Tax (Input Credit) Dr. 3,708.00

By Service Tax (Reverse Charge)
Payable 2,781.00
By TDS (Contractor) 619.00
By Party 30,308.00

MANESH WAGHMARE

MANESH WAGHMARE (Querist)
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02 September 2013 But can we take the input credit of 75% contribution of Service receiver i.e. Rs 3708/-?

CA Suresh Jain

CA Suresh Jain (Expert)
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02 September 2013 Yes, you can take credit of the ST Rs. 927.00 immediately and balance i.e. belonging to RCM after making the payment in cash

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