hi sirs,
Please explain the following …
| Basic Value | 100,000 |
| VAT 70% of Basic value Rs: 70,000/- @ 14.5% | 10,150 |
| Service Tax 70% of Basic value Rs:70,000/- @ 12.36% Rs:8,652/-and Share 35%Party & 35%Bill Receiver. | |
| for this Rs:8,652 @ 50% (Input Service Tax) | 4,326 |
| Total Bill Value Rs: | 114,476 |
| based on above transction not matched 100% it comes 105%.. Is correct means how to made entry & please update related amendment. |
Dear Suresh,
Please clarify with regard to 105%. I could not understand your query.
thanks for your action, like VAT 70% and Service Tax 35%. = 105%
The aforesaid calculation seems correct from Service tax perspective.
The vendor seems to have considered 70% of the net amount (may differ from State to State) as value of goods. Thus, charged VAT on 70% value.
Further, under Service Tax Law, it seems that the contract is considered as works contract. It further seems that the vendor is a non-body corporate i.e., individual, firm, etc. and you are a body corporate. Thus, the vendor would charge Service tax @ 12.36% on 70% of the value, 50% of which is payable by you.
Please refer to the following calculation –
|
Sr. No. |
Particulars |
Amount (Rs.) |
|
I |
Net Invoice Value |
100,000 |
|
II = I x 14.5% |
VAT @ 14.5% x 70% |
10,150 |
|
III = I x 70% x 12.36% |
Service tax @ 8.652% (i.e., 12.36% on 70% value) |
8,652 |
|
|
|
|
|
|
Note : Please note that if service provider is a non-body corporate i.e., Individual, HUF, Firms, etc. and service recipient is a body corporate, then 50% of the Service tax is required to be paid by the service recipient under reverse charge mechanism. |
|
|
|
|
|
|
IV = III x 50% |
Service tax payable by service provider |
4,326 |
|
|
|
|
|
V = I + II + IV |
Total amount charged in the invoice |
114,476 |
|
|
|
|
Dear Suresh,
The percentages of 70% for VAT and 70% for Service Tax are fixed to ascertain the component of Service and Supply in the transaction and as such, we cannot derive the converse by stating that the base value is increased to that extent. If that would be the case, as you said, the base should be 70+70 = 140.
But that is not what is intended. It only means that for the purpose of VAT, 70% of the value represents supply and for the purpose of Service Tax, 70% of the value represents service. These provisions are framed considering that the assessee is unable to ascertain the individual components of supply and service and thus, composition scheme is chosen. If the assessee is able to separate them, then this method is not applicable.
Entries for the same would be as follows:
Descripttion Amount Rs. Amount Rs.
Debit Expense A/c (Value of Service) 100,000
Debit Expense (VAT Portion - Input Credit 10,150
is not available in composition)
Debit Service Tax Input Credit account (Total
Service Tax) 8,652
Credit Supplier/Service provider 1,14,476
Credit Service Tax payable A/c (Reverse charge) 4,326
Please refer to Notification No. 24/2012 - ST and 30/2012 - ST, for information on the amendment.
Dear sirs.. thanks for your attention.. how can made entry in Tally.. details given below.
| Basic Value Rs | 823,315 | |
| 70%of Basic Value Rs:576,321/-. | VAT 14.5% | 83,566 |
| 35%of Basic Value Rs:288,160/-. | ST 12.36% | 35,616 |
| Transport | 5,000 | |
| 947,497 |
| DR | CR | |
| Total Bill Rs | 947,498 | |
| VAT Basic Value 70% | 576,321 | |
| Input Tax 14.5% | 83,566 | |
| ST Basic Value 35% | 288,160 | |
| Input ST 12.36% | 35,617 | |
| Freight | 5,000 | |
| 988,664 | 947,498 |
not tally above entry... so please tell me again...
My friend,
The difference is because you are artificially breaking one transaction into two. Pass consolidated entry, wherein the net value would remain the same i.e., 823315, create a new VAT head namely, VAT @ 14.5% on 70% - add 83,566/- to it and create a new Service tax head namely, Service tax @ 8.652% on 50%- add Rs.35,617/- and at the end charge Rs.5000 to transportation.
This is the only way to pass the entry. If you break Rs.823315 artificially into 70% and 35%, then there would always be an excess of 5%, (i.e., 41167, exactly the same difference in your table) which is incorrect.
I hope this clarifies the doubt.
CAclubindia
