Tax credit . . . urgent . . .!!!!

This query is : Resolved

saurin (Querist)
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30 December 2011 If suppose the bill given by a labour contractor does not specify 10 % 1 % and 2% that is the contractor has written directly 10.3%....

Can we debit service tax recevable account by 10.3% amount .... ?

ex: bill given is
100
10.3
TOTAL : 110.3
(.3 is not at all BIFURCATED)

can i pass entry like :
Expense A/c Dr. 100
Service tax receivable A/c Dr 10.3
to Party (Labour Contractor) A/c 110.3.
?

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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30 December 2011 The entry will be as under:

Expense A/c Dr. 100
Sevice Tax Receivable Dr 10
Service Tax-EC Receivable Dr 0.2
Servie Tax-SHEC Receivable Dr 0.1
To Contractor 110.3

saurin

saurin (Querist)
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30 December 2011 I KNOW THE CORRECT ENTRY WHICH IS AS PER YOU REPLY BUT I WANT TO KNOW THAT IF I PASS ENTRY WHICH IS SPECIFIED IN MY EXAMPLE WHAT WILL BE ITS IMPLICATIONS ?

Pragnesh

Pragnesh (Expert)
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30 December 2011 Education cess and SAHE cess should be shown separately in invoice because it should be paid under separate accounting head.

saurin

saurin (Querist)
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30 December 2011 but the wromg entry is already made. . . so what to do now?

Pragnesh

Pragnesh (Expert)
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30 December 2011 It seem that you are not maintaining separate accounting code for Edu. Cess and Hig. cess. As per circular accounting should be separate to avoid mistake in calculation of cenvat credit and deposit of service tax. However if entry is already passed, then you should be very careful at the time of calculation of service tax and filing of Service tax return in case of Edu.cess and High. ed. cess.

saurin

saurin (Querist)
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30 December 2011 Thanks a lot . . . :)

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