Accounting treatment of service tax on gta

1) Entry for recognizing the liability

  Type of service provided A/c ................. Dr    1000

           To Sundry Creditor (service provider)  ........... Cr.       975

           To Service Tax Payable                .........              Cr.        25

2) entry at time payment or adjustment against Excise duty

       Service Tax Payable A/C  ............... Dr      25

                  To Bank / Cash A/c     ................. Cr          25

                              or

                    To Excise Duty Receivable ............... Cr              25

your client is making juggling

Thanks Mr. Khadloya for your reply. But, in the entry number 1 of your reply, service tax receivable account will be debited with Rs. 25 as credit of service tax on GTA is an input service. 

I want to know, whether a separate account head should be opened for accounting for GTA liability?

Hi,

If service tax payable account shows debit balance , It implies that you have unutilised credit which can adjusted towards your payable.  The first entry passed by your client is avoidable.

it is not neccesary to show GTA liability seperately.

Regards

Gaya3

Thanks Miss Gayathri for your valuable reply.

I received Transport charges bill of Rs. 10000/- not including service tax. so please clarify me what entry i should pass in tally to show ST Liability on GTA.  Because Receiver get 75% Abatement and remaining 25% paid.

Dear All,

please correct me if i am wrong:

1. Transport charges A/c_______Dr.      10000

    Service Tax A/c_____________Dr.           309

              To S. Creditors A/c                                           10000

              To Service Tax Payable                                        309

2. Service Tax Payable A/c______Dr.           309

              To Bank A/c                                                             309

3. Excise Duty A/c_____________Dr.          309

              To Service Tax A/c                                                  309

   ( Being ST Credit pass on to Excise after making payment of ST )

Waiting for your valuable response.

Thanx & Regards,

Deepak

CA Shriniwas Sir,

I have one doubt in your entry, how the Excise Duty Receivable A/c will be closed if we consider two entries  suggested by you.

Dear Deepak

How have you calculated Rs. 309.

Can you please provide calcualtions?

Thanks

Shivani

shivaniadream @ gmail.com

Hi Members

In case of GTA, does the liability of service tax is on service receiver.

does this mean that transporter always submits his bill without charging service tax?

Can anyone please clear the concept with example and journal entries.

thanks

shivani

Calculation part as you required:

10000*12.36/100                 = Rs.1236/-

Less: 75 % abatement        = Rs.927/-

____________________________

ST Payable (25% Payable) =  Rs. 309/-

Dear Deepak

In my view your entries are absolutely correct.

but I have one question.

what if the service receiver is not a manufacturer nor does he provide any services of his own.

say a trader has seeked services of GTA.

now how can a trader claim the Rs. 309.

whom will he go to for refund !!

regards

shivani

hi sir

outword fright is not allowed credit input so entry in tally.

total Service tax credit avaible = Rs 100/-

inword credit avaible = 70/-

Outword credit avaible = 30/- (disallowed credit amount so in tally and rs.30 income tax Expenses is allowed is yes/ no)