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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
| BLTD | |
| PURCHASE Item A (1000kg@4 ) | 40000 |
| CST 12.5% | 5000 |
| Total | 45000 |
-a-
Entry
Purchase A/c Dr 450000
To B 45000
| C LTD | |
| PURCHASE (1250 kg@ 4) | 50000 |
| EXCISE 12.5% | 6250 |
| 56250 | |
| VAT 5% | 2812.5 |
| TOTAL | 59062.5 |
-a-
Entry
Purchase A/c Dr 52812.5
Input Excise(Cenvat on Inputs) Dr 6250
To C 59062.5
DETAILS OF EXPENSES
| D LTD | |
| PRINTING EXP | 3000 |
| VAT 5% | 150 |
| Total | 3150 |
-a-
Entry
Printing Expense Dr 3150
TO D 3150
| E LTD | |
| OFFICE MAINTENANCE | 4000 |
| VAT 5% | 200 |
| Total | 4200 |
-a-
Entry
Maintenance Expense Dr 4200
TO E 4200
| 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
| 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.
| F LTD | |
| MACHINE | 30000 |
| VAT 5% | 1500 |
| Total | 31500 |
-a-
Entry
Machine Dr 31500
To F 31500
| G LTD | |
| MACHINE | 40000 |
| CST 2% | 800 |
| Total | 40800 |
-a-
Entry
Machine Dr 40800
To G 40800
| 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
| 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
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
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
Note:
We have to show all component of Service tax separately so that it is easier to get data to file challan and return
