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Reverse charge accounting

Queries 654 views 1 replies

Heyy all,

ABC co ltd. who trades in Goods received Works Contract Service worth 498000

so the co. accounts this transaction as follows:

Expense A/c.........................528776

    To Creditor A/c.......................................498000

    To Service tax (Reverse Charge)A/c..........30776

Is the above JE right?

Why cant the company debit a "Service Tax Recoverable A/c" of 30776 and then after paying the Reverse charge liability, claim the ST Recoverable as refund?

Please reply

Thanks in advance ;)

Replies (1)
Hi siddarth you are registered company? If yes what u are putting in expenditure account is correct company paid reverse charge mechanism under wct not eligible to take service tax credit for this u have to deduct TDs as well vat amount anything charge u have to deduct 2% under wct under Tamil Nadu vat .if more need clarification kindly contact undersigned pavazh. 9842542400


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