Service provider gets input of Excise and Service Tax on Expense Bills
This Input is called Cenvat

It is normally of 3 types

TYPES OF CENVAT MEANING
Cenvat on Input Services SERVICE TAX ON EXPENSES
Cenvat on Inputs EXCISE ON PURCHASES
Cenvat on Capital Goods EXCISE ON MACHINES 1/2

 

Note:-

No Input is available of
1. Vat on Purchases and Expenses
2. CST on Purchases and Expenses
3. Swachh Bharat Cess on Expense Bills

Since no Input is available of these 3,we do not make their Input accounts

SERVICE TAX ENTRIES ASSIGNMENT 

Following are Expense and Incomes Bills of a Service Provider.

Questions:-

Pass Entries

DETAILS OF PURCHASES

                                     A LTD
PURCHASE Item A  (1000kg@3 ) 30000
VAT 5% 1500
 Total 31500

-a-

Entry

Purchase A/c Dr 31500
               To A 31500

-ea-

                                   BLTD
PURCHASE Item A  (1000kg@4 ) 40000
CST 12.5% 5000
Total 45000

-a-

Entry

Purchase A/c Dr 450000
                To B 45000

-ea-

                                  C LTD
PURCHASE (1250 kg@ 4) 50000
EXCISE 12.5% 6250
  56250
VAT 5% 2812.5
TOTAL 59062.5

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Entry

Purchase A/c Dr 52812.5
Input Excise(Cenvat on Inputs) Dr 6250
                                To C 59062.5

-ea-

DETAILS OF EXPENSES

                                D LTD
PRINTING EXP 3000
VAT 5% 150
Total 3150

-a-

Entry 

Printing Expense Dr 3150
                  TO D 3150

-ea-

                                 E LTD
OFFICE MAINTENANCE 4000
VAT 5% 200
Total 4200

-a-

Entry

Maintenance Expense Dr 4200
                   TO E                4200

-ea-

                                 AIRTEL
INTERNET CHARGES 3000
Service Tax @ 14% 420
Swachh Bharat Cess @ 0.5% 15
Krishi Kalyan Cess @ 0.5% 15
Total 3450

-a-

Entry

Internet Expense Dr 3015
Input Service Tax (Cenvat on Input Services) Dr 420
Input KKC (Cenvat ion Input Services KKC) Dr 15
                           To Airtel 3450

For Swachh Bharat Input,we do not make account as we do not get any cenvat.However for KKC,we get Input,hence we make its account

-ea-

                                 Max and Co
PROFESSIONAL CHARGES 10000
SERVICE TAX 15% 1500
Total 11500

-a-

Entry

Professional Expense Dr 10050
Input Service Tax (Cenvat ion Input Services) Dr 1400
Input KKC (Cenvat ion Input Services KKC) Dr 50
                                       To Max and Co 11500

For Swachh Bharat Input,we do not make account as we do not get any cenvat.However for KKC,we get Input,hence we make its account,we need to show KKC separately in return,so we show it separately in entry also.

-ea-

                                   F LTD
MACHINE 30000
VAT 5% 1500
Total 31500

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Entry

Machine Dr 31500
             To F 31500

-ea-

                                  G LTD
MACHINE 40000
CST 2% 800
 Total 40800

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Entry

Machine Dr 40800
               To G 40800

-ea-

                                   H LTD
MACHINE 80000
EXCISE 12.5% 10000
  90000
VAT 5% 4500
TOTAL 94500

-a-

Entry

Machine Dr 84500
Input Excise on Machines 1/2(Cenvat on Capital Goods Current Year) 5000
Input Excise on Machines 1/2 Deffered (Cenvat on Capital Goods Deferred) 5000
                                  To H 94500

 

Entry in Next Year

Input Excise on Machines 1/2(Cenvat on Capital Goods Current Year) Dr 5000

    To Input Excise on Machines 1/2 Deffered (Cenvat on Capital Goods Deferred) 5000

-ea-

 H LTD
Repair and Maintainance 2000
EXCISE 12.5% 250
  2250
VAT 5% 112.5
TOTAL 2362.5

-a-

Entry

Repair and Maintenace A/c Dr 2112.5
Input Excise on Machines 1/2(Cenvat on Capital Goods Current Year) 125
Input Excise on Machines 1/2 Deffered (Cenvat on Capital Goods Deferred) 125
                                   To H 2362.5

 

Entry in Next Year

Input Excise on Machines 1/2(Cenvat on Capital Goods Current Year) Dr 125

    To Input Excise on Machines 1/2 Deffered (Cenvat on Capital Goods Deferred) 125

-ea-

SALES BILLS

                                  X LTD
Professional Services 140000
Add  
Service Tax @ 14% 19600
Swachh Bharat Cess @ 0.5% 700
Krishi Kalyan Cess @ 0.5% 700
Total 161000

-a-

Entry

X Dr 161000
           To Professional Services Income140000
           To Output Service Tax 19600
          To Output Swachh Bharat Cess 700
          To Output Krishi Kalyan Cess 700

-ea-

Note:
For Swachh Bharat Input,we do not make account as we do not get any cenvat.However for Output,we have to make account as we have to pay it

                             YLTD
Consultancy Service 100000
Add  
Service Tax @ 15% 15000
Total 115000

-a-

Entry

X Dr 115000
       To Consultancy Services Income100000
       To Output Service Tax 14000
       To Output Swachh Bharat Cess 500
       To Output Krishi Kalyan Cess 500

-ea-

Note:
We have to show all component of Service tax separately so that it is easier to get data to file challan and return

  1. Accounts and Finance
  2. Accounts with Taxes
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CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 6 years. He provides courses for Practical Accounts, Taxation and Efiling at teachoo.com .
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