Tally.ERP 9 gives the flexibility to account the opening balance of Service Input credit and service tax at anytime during the Financial Year at your convenience.
In re-modelled service tax, service tax/input credit opening balances can be brought forward /accounted only for those services which are already realized in the Previous Financial Year that is, Sales and its relevant realization has completed in previous Financial Year and service tax liability need to be shown in the current year data/split data.
In case the realization has happened in the current year, the service tax reference for adjusting is not displaying since the details tracking are lost during splitting the data or in new financial year with opening balance. Pass a normal Receipt voucher adjusting against party bill reference and service tax details as “End of List” and then follow below process to bring in the liability to your service tax payable report.
We will understand how to book the transaction with an example.
On 01-04-2016, ABC Company has Input Credit opening balance of Rs. 11200 (Service Tax of Rs.11, 200) on services purchased from the Service Provider Akash Enterprises.
Note: If you have education cess and secondary cess input credit, you can mention the same while passing the transaction.
Service Tax opening balance of Rs. 7500 (Service Tax of Rs.7000, Swach Bharat Cess of Rs.500) on services sold to the Service Receiver Raj Ad Agency.
To account the Service Tax opening balance
Create Service Tax Ledger for Current Year
Create Output Swachh Bharat Cess ledger
Create Service Tax Ledger - of Previous Year
Record the Transaction in Journal Voucher to account Previous year's Input Service Tax
Record the Transaction in Journal Voucher to account Previous years’ Service Tax Liability
To create Service Tax ledger for current year
1. Go to Gateway of Tally > Accounts Info. > Ledgers and create the ledger as shown below.
Here we have created a common service tax ledger which can be used to account service tax and cess amount.
Note: If you want to account the service tax amount based on the tax head, you can create the Tax Head based ledgers.
To create output Swachh Bharat Cess ledger
Create Service Tax Ledger for Previous Year
To account the Input credit and Service Tax of Previous year create the Ledger under Suspense A/c.
Note: You can create the Previous Year Tax ledgers under Current Assets/Current Liabilities without enabling the Service Tax feature.
2. Input Service Tax – Suspense A/c Ledger
3. Output Service Tax – Suspense A/c Ledger
Note: User Can Create One ledger to account both input credit and output tax. Here we have created TWO ledgers- One to account inputs and another account to output tax for the better understanding of the functionality.
Record the Transaction in Journal Voucher to account previous year's Input Service Tax
1. Go to Gateway of Tally > Accounting Vouchers > F7: Journal .
2. Enter the Date as 1-4-2016.
3. Press Alt + J:Stat adjustment.
4. In type of duty select Service tax.
Note: By default, only the basic adjustment flags are displayed. Enable the option Allow All Adjustments Types? Using F12: Configure in Stat Adjustment Details screen to display the entire set of service tax adjustment flags.
4. In Nature of adjustment select Opening balance.
5. In Debit field select Service Tax Ledger from the List of Ledger Accounts created for the current year and press enter to view Service Tax Ledger.
6. In Credit field select the Input Service Tax Ledger created under Suspense A/c for previous year. Amount of Rs. 11200 will be defaulted automatically.
This journal will transfer the pending Input Service Credit of the previous Financial Year current Financial Years Service Tax ledger. The completed Opening balance entry is displayed as shown below.
On Accounting Input service credit Opening balance details will be displayed in Service Tax Computation report.
1. Go to Gateway of Tally > Display > Statutory Reports > Service Tax Reports > Form ST3 > Input Credit Summary
Record the Transaction in Journal Voucher To account Previous years’ Service Tax Liability
1. Go to Gateway of Tally > Accounting Vouchers > F7: Journal
2. Enter the Date as 1-4-2016
3. Press Alt + J:Stat adjustment
4. In type of duty select Service tax
Note: By default, only the basic adjustment flags are displayed. Enable the option Allow All Adjustments Types? Using F12: Configure in Stat Adjustment Details screen to display the entire set of service tax adjustment flags.
5. In Nature of adjustment select Opening balance
6. In Debit field select Output Service Tax Ledger from the List of Ledger Accounts created for the current year.
7. In Amount field enter the Service Tax (Liability) amount Rs. 7500
8. In Credit field select Service Tax Ledger created for the current Financial Year.
9. In amount field enter the Output Service tax (Liability) amount Rs 70000
10. In Credit field select Output Swachh Bharath Cess Tax ledger from the List of Ledger Accounts created for the current year.
11. In Amount field enter the Swachh Bharat Service Tax (Liability) amount Rs. 500.
12. Accept the Service Tax Details screen.
This journal will transfer the pending Service Tax of the Previous Financial Year to current Financial Years’ Service Tax ledger. The completed Opening balance entry is displayed as shown.
13. Press enter to accept.
On accounting service Tax Opening balance details will be displayed in Service Tax Computation report.
To view the details Go to Gateway of Tally > Display > Statutory Reports > Service Tax Reports > Form ST3 > Service Tax Computation.
Note: Swachh Bharat Cess details will not appear in Triangulation report currently. This is because the format of presenting this information in returns has not been prescribed by the Department. Once the details are given, we shall incorporate it in Tally.ERP 9.
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