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Private contractor entry in tally

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uday rao

32 Points Posted on 22 February 2023

if we are paying to a private contractors without gst bill like the contractors doesn't have a company and doing work as a freelance something...i do we should record those entries in tally and what amount of percentage should be calculated and please give full details please.

thank u in advance.

Replies (14)

Quick Summary

Discussion on accounting entries in Tally for payments made to private/freelance contractors without GST invoice. Entries include booking under contract expenses, liability to contractor, bank payment, and TDS applicability u/s 194C. Contractor expenses treated as indirect expenses in P&L.

prasad Nilugal

GST Practitioner & Accounts

8998 Points Posted on 22 February 2023

sorry for miss interpretation the query earlier .

Yes , you have record these transitions , in the books of accounts as a part of business .

prasad Nilugal

GST Practitioner & Accounts

8998 Points Posted on 22 February 2023

Also check regarding TDS applicability under section 194 (C) of the Income tax act - ( payment to contractor )

uday rao

32 Points Posted on 22 February 2023

I mean if a person is ABC so the entry will be

By ABC A/c Dr

To contractor expenses Cr

By ABC A/c Dr

To bank A/c cr

And if the second entry is correct then the ABC comes under which head

uday rao

32 Points Posted on 22 February 2023

This ABC preson is an individual

prasad Nilugal

GST Practitioner & Accounts

8998 Points Posted on 22 February 2023

Contract Expenses A/c Dr
To ABC A/c Cr
( Booking of an expense)

ABC A/c Dr
To Bank A/c Cr
( payment entry)

ABC A/c will be under Trade creditor, Current Liability, Balance sheet.

Eswar Reddy S

CFO- at NHTF

15022 Points Posted on 22 February 2023

@ Uday Rao,

Are you payer or recipient of service ?

prasad Nilugal

GST Practitioner & Accounts

8998 Points Posted on 22 February 2023

He is receiving services from ABC .

Eswar Reddy S

CFO- at NHTF

15022 Points Posted on 22 February 2023

@ Uday Rao,

If you are the recipient of service then it is expense and you should correct the first entry and it is wrong

prasad Nilugal

GST Practitioner & Accounts

8998 Points Posted on 22 February 2023

Accordingly I have corrected..........

Eswar Reddy S

CFO- at NHTF

15022 Points Posted on 22 February 2023

👍🏻👍🏻👍🏻

prasad Nilugal

GST Practitioner & Accounts

8998 Points Posted on 22 February 2023

If TDS is applicable for Payment to Contractor then you pass entry.

Contract Expenses A/c Dr
To ABC A/c Cr
To TDS payable. A/c Cr
( Booking of an expense, TDS payable)

uday rao

32 Points Posted on 22 February 2023

Contractor expenses account comes under what head...?

Is it under indirect expenses

prasad Nilugal

GST Practitioner & Accounts

8998 Points Posted on 22 February 2023

Yes , Indirect expenses, Profit and Loss Account.

Eswar Reddy S

CFO- at NHTF

15022 Points Posted on 22 February 2023

How much is the amount?

What is the quantum of turnover/ expected turnover of contractor ?

If it exceeds threshold limit then GST registration is required and GST has to be charged