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Service tax query

Accounting Entries 789 views 5 replies

dear Friends

Please guide me how to pass entry for service tax under reverse charge mechanisim including tds payment e.g. security services receives by us

 

regards

milind deoghare

 

Replies (5)
SP or SR plz mention

In the books of service receiver:-

1. Security Service Exp. A/c   Dr.

    Service Tax ITC A/c           Dr. (total service tax)

              To Service Provider A/c

              To Service Tax Payable A/c (the reverse charge portion of total service tax)

2. Service Provider A/c           Dr.

               To Bank A/c

               To TDS Payable A/c

3.     TDS Payable A/c.               Dr.

                To Bank

4.     Service Tax Payable A/c.     Dr.

                To Service Tax ITC A/c. or/and Bank A/c.

                

In the books of Service Provider:-

1. Service Receiver A/c.          Dr.

                To Sale of Service A/c.

                To  Service Tax Payable A/c. (Total ST minus reverse charge portion of ST)

2. Bank A/c.                           Dr.

    TDS Receivable A/c.           Dr.

                To Service Receiver A/c.

3. Service Tax Payable A/c.     Dr.

                 To Bank A/c.

 

 

                       

 

 

Service Receiver - Security Services

1. office maint. A/c dr

    Cenvat A/c dr

       To Sundry Creditors A/c

            TDS Payable A/c

2. Service Tax Partial Reverse Charge A/c  dr.

       To Service Tax Payable A/c

3. Sundry Creditors A/c dr.

    Service Tax Payable A/c dr.

        To Bank A/c

4. Cenvat A/c dr.

     To Service Tax Partial Reverse Charge A/c

 

The entry is okay, but need to consider the fact that ITC cannot be taken instantly for the entire Service tax charged by Service provider. This means to the extent of reverse charge the credit can be taken only upon payment of Service tax under reverse charge mechanism
would the whole amount be claimed @ 12.% under Cenvat


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