Example 1 Only Service Tax, No TDS

Suppose Bill Received on 10 June

Max Ltd

Consultancy Charges            1000000

Add

Service Tax @14%                     14000

Swachh Bharat Cess @ 0.5%        500

Krishi Kalyan Cess                          500

Total                                          115000

 

Payment made on 19 August

What is the entry assuming no TDS

-a-There can be 2 Cases Our Company is taking Input of Service tax(We are Service Providers registered in Service tax or Factory Registered in Excise)
Our Company is not taking Input of Service tax (We are a Vat Dealer or a NGO)

Entry is different in both cases as shown below

Not Taking Input

Taking Input

Consultancy Exp Dr 115000

          To Max                      115000

Consultancy Exp Dr 100500

Input Service Tax        14000

Input KKC                       500

          To Max                      115000

Entry for Payment

 

Max Dr      115000

          To Bank     115000

 

Entry for Payment

 

Max Dr      115000

          To Bank     115000

 


Example 2 Service Tax with TDS
Suppose in Example 1 ,TDS @ 10% is also applicable under 194J

Pass entry

-a-In both cases,TDS will be deducted @ 10% on 100000=10000


Entry is different in both cases as shown below

Not Taking Input

Taking Input

Consultancy Exp Dr 115000

          To Max                      105000

           To TDS u/s 194J        10000

          

Consultancy Exp Dr 100500

Input Service Tax        14000

Input KKC                       500

          To Max                     105000

          To TDS u/s 194J      10000

Entry for Payment

Max Dr      105000

          To Bank     105000

 

Entry for Payment

Max Dr      105000

          To Bank     105000

 (115000-10000)


  1. Accounts and Finance
  2. Accounts with Taxes
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About the Author

CA Maninder Singh's photo - Expert in Practical Accounts, Taxation and Efiling
CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 8 years. He provides courses for Practical Accounts, Taxation and Efiling at teachoo.com .