CA Final
256 Points
Joined February 2009
Well the entry in books of Service receiver should be like this :
Professional Charges -Dr. 10000
Input Sevice Tax A/c -Dr. 1236
To Party A/c 11236
Party A/c -Dr. 11236
To Discount Rec. 562
To Bank 10674
In the Books of Sevice Provider :
Party A/c -Dr. 11236
To Professional Receipt 10000
To Service Tax Payable 1236
Bank A/c -Dr. 10674
Discount Allowed -Dr. 562
To Party A/c 11236
1.In Sevice Tax Act the tax will be charged the bill amount regarded as your Gross Tax Liability therefore by no means you directly increase/decrease your Party A/c or the ST liability on it
2.As per ST Act even if you have received less payment on a bill and you regard it as final settlement then you will be liable to pay your full tax liability as discount is your private affair and not revenue authorities headache