Dear Mohit,
With Due respect I would say that the entry passed earlier for receipt of Rs. 90,000/- was incorrect.
Since the Party has made payment of Rs. 1,00,000/-, giving credit to Party of Rs.89,000/- is not right.
Entry should have been
Bank Dr...............90,000/-
TDS ....................10,000/-
. To Party..................100,000/-
(For recipt)
Service Tax Exp Dr............11,000/-
To Service Tax Payable........10,680/-
To Ed Cess payable....................213/-
To SHE Cess Payable................107/-
(For providing for ST as per grossing up method. Since Revenue is not booked yet, service tax is paid out of own pocket hence treated as expense till Bill is Booked).
Service Tax Payable.Dr.......10,680/-
Ed Cess payable..Dr..................213/-
SHE Cess Payable..Dr...............107/-
To Bank A/c. ............................11,000/-
(Payment of ST)
Party Dr ..............229000
To Revenue............................... 200000
To ST payable. ..........................28000
To SB Cess payable....................1000
(For booking Bill)
ST payable Dr .....................11,000/-
To Service Tax Exp A/c..............11,000/-
(Reversal of ST already booked and paid).
Bank A/c Dr.....................1,16,100/-
TDS Dr.................................12,900/-
To Party .............. ...................1,29,000/-.
(For receipt of balance amount).
ST payable Dr......................17000
SB Cess Payable....................1000
To Bank .................................18000
(For payment of balance ST and SB Cess)
Now since entries have been passed in previous Year,
You can pass rectification entries in current year for making Changes. Such entry would be as follows
Service Tax Exp Dr .......11,000/-
To Party......,...................11,000/-
(For bringing Party account up to 1,00,000 and booking ST exp)
Now Further pass above mentioned series of entries and all accounts would ge closed simultaneously.
Please feel free for any further clarification on above.
Thanks & Regards,
CA Mohit Salvankar
CAclubindia
