TDS & Service Tax
This query is : Resolved
20 November 2008
Query:-If I am purchasing some Machinery & pay freight for that machinery Rs.50000/- Is their any liability to deduct TDS from freight payment,& pay service tax, if I capatilize this Expenses?????
Hiral Raja
(Expert)
20 November 2008
TDS will have to be deducted on the freight payment.
Also service tax under GTA will have to be paid.
Also service tax under GTA will have to be paid.
20 November 2008
Pl. tell me proper accounting entry to capatilize expenses????????????
Ram Avtar Singh
(Expert)
20 November 2008
Cartage exps Dr 50000
Transporter cr 50000
Transporter Dr 1030
TDS @ 2.06% cr 1030
Dr serice tax on 25%cartage 1500
Dr cess 30
Dr cess s&H 15
CR Bank 1545
Transporter cr 50000
Transporter Dr 1030
TDS @ 2.06% cr 1030
Dr serice tax on 25%cartage 1500
Dr cess 30
Dr cess s&H 15
CR Bank 1545
20 November 2008
Thankx RamG!!!
But I want to know how to Capatilize Expenses on purchase of Machinery???????
But I want to know how to Capatilize Expenses on purchase of Machinery???????
20 November 2008
you have two options prashant:
1. directly debit the machinery account by the amount of freight and service tax thereon if you are not claimint the cenvat thereof. entry will be:
Machinery a/c dr. (value+freight+s.tax)
To supplier a/c Value
To transporter a/c Freight
To s.tax payable a/c S.tax
(this is a combine entry you can pass separate entry also)
2. another option is to transfer the freight expenses account opened by mr. ram avtar to machinery a/c. entry will be:
Machinery a/c dr. Freight
to cartage exp. a/c
further you should also transfer the service tax exp. to the machinery a/c by same entry if you are not taking the cenvat credit of the same.
1. directly debit the machinery account by the amount of freight and service tax thereon if you are not claimint the cenvat thereof. entry will be:
Machinery a/c dr. (value+freight+s.tax)
To supplier a/c Value
To transporter a/c Freight
To s.tax payable a/c S.tax
(this is a combine entry you can pass separate entry also)
2. another option is to transfer the freight expenses account opened by mr. ram avtar to machinery a/c. entry will be:
Machinery a/c dr. Freight
to cartage exp. a/c
further you should also transfer the service tax exp. to the machinery a/c by same entry if you are not taking the cenvat credit of the same.
20 November 2008
1. Can I Capatalize Service Tax Paid on Freight?
2. If I Capatalize Installation Charges,should I CApatalize Installation Charges + Service Tax on Installation Charged by Vendor in Separate bill for Installation??????
2. If I Capatalize Installation Charges,should I CApatalize Installation Charges + Service Tax on Installation Charged by Vendor in Separate bill for Installation??????
K V Subba Rao
(Expert)
20 November 2008
I concur with the view expressed by Sri Zeeshan. If there is no scope for claiming Cenvat credit, then you have to capitalise Service Tax component also.
Whether a combined bill is obtained or two seperate bills for Installation Charges and Service TAx are obtained makes no difference.
Decision is based not on number of documents but on principle
Whether a combined bill is obtained or two seperate bills for Installation Charges and Service TAx are obtained makes no difference.
Decision is based not on number of documents but on principle
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