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Journal & payment for entries service tax credit

If we availing service tax credit , what is the journal entry we have to pass when we receives the bill & what is the payment entry we have to pass if we make a payment
Asked by: chandragenie | Member Since Jul-2008 | Asked on: Jul 11th, 2008

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Showing Answers 1 - 2 of 2 Answers

Answered On : Aug 6th, 2008

View all answers by cmasunil

When we are making a payment for services which include service tax, Then entry will be

    1. Paid to Port trust for haulage, tipping, sidding etc charges including Service Tax

                   Party A/c ( Port Services) Dr.   100000
                   Service tax Credit A/c      Dr.      12360
                               To Bank A/c                           12360

    2.When making any payment of service tax after availing Servcie Tax Credit

                   Service Tax  A/c     Dr.        15000
                         To Service tax Credit a/c         12360
                         To Bank A/c                               2640   

    3.When we receive refund

                   Bank A/c     Dr.          12360
                      To Srevice Tax Credit A/c    12360

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Answered On : May 20th, 2009

View all answers by c7831887

If we receives a bill with service tax @ 12.36% on Rs.10000/-, the entry will be:
Purchase A/c Dr.11236
  To Party's A/c10000
  To Service Tax payable A/c  (Contra-1)1236
(Being the Purchases made from ABC, accounted)
When we make payment to Government for Service Tax, 2 entires will be passed
Service Tax payable A/c (Contra-1)1236
  To Service Tax A/c (Contra-2)1236
( Being the Service tax paid, accounted)
Servicce Tax A/c (Contra-2)1236
  To Bank A/c1236
If we receive refund/claim from Service tax department,
Bank A/c1236
  To servicce Tax A/c1236
(being the refund received from Service Tax, accounted) 

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