Accouting Entry

I think the entry should be.......

Bank A/c   Dr                     10674.20

           To sales a/c                               9500.00

          {10000 - (10000*5/100)}

           To service tax                             1174.20

         (9500*12.36/100)

Because service tax should be recovered at the value of sales and the value of sales is 9500 (after deducting trade discount)

Exps a/c                                         Dr   10000

Service tax                                     Dr   1200

Cess on Service tax                    Dr    24

Secondry & Higher Edu Cess   Dr   12

Rebate & disrount                                                         Cr    560

Party A/c                                                                           Cr   10676

Hi Amit,
 

I thk the Voucher u had encounted is  expense Voucher

So entry will be

1. Professional Charges A/c DR    10000
2.   DR     1236
3.             To Party                                         10676
4.              To Disc Earned A/c                     560

• Party A/c  DR                                   10676
•             To Bank                                10676 

1.  Service Tax Payable (Liability) DR          1236
2.                  To  Service Tax (input tax) A/c   1236

 Professional Charges will be debited to P & L A/c &  Disc Earned will be Credited to P & L A/c

Hope ur satified wih the Solution

Revert back

Hv a nice Day

i think Renuka is right

entry will be

*professional charges a\c dr 10000

*cenvat on service tax a\c dr 1200

*education cess(cenvat on service tax) dr 36

To partyname a\c cr 10676

To discount earned a\c cr 560

* manufacturing company can take cenvat credit on service tax paid

Thanx..

I THINK RENUKA IS RIGHT

 Friends,

         i accept  nikita said  because what ever the  tax is liable only after deducting the discount only.

for eg: if yor giving sample stock do you charge the tax for the customer or you will pay behalf of customer ?  Think logic.......... this is my opinion may be wrong?

but the most imp thing is whether the disc is cash disc or trade disc. as the voucher is for services provided its a cash discount.now the total amount of bill will be rs.11236ie after adding the service tax @ 12.36% on 10000/-. from 11236 disc will be allowed i.e 5%ie 560/-.

the entry will be

1)

professional fees  Dr    10000/-

service tax         Dr              1236/-

   To Party's A/c                         11236/-

2)

party's Account        Dr   560/-

  To Discount Account          560/-

3)

Party's Account        Dr        10676/-

    To Cash/Bank                         10676/-

Hi Guys

I think nikita is write. As per the ST rule, we have to pay the services tax on the receipt amount. If we have received the less amount compare to bill amount then we to pay tax on receipt amount by revevse calculation.

but as per amit gupta it is amt on servicesa 10000/- and amt on sales.please consider the diff between sales and services

Mam we are talking about services not goods.......

and for your logic read this :)

Under Section 67 of the Finance Act, 1994, Service Tax is levied on the gross or aggregate amount charged by the service provider on the receiver

Cash entries shuold be entered through purchase,sale,payment or receipt.

but if you entered through journal there is not any problem........

the only difference is that while in case of entering through specific route(payment or reciept)

you will get a prompt message that there must me bank or cash.