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https://help.tallysolutions.com/docs/te9rel49/Service_Tax_New/Account_op_ST_bill.htm

Accounting Opening Service Tax Balances

Tally.ERP 9 gives the flexibility to account the opening balance of Service Input credit and Service Taxat anytime during the Financial Year at your convenience. To account Opening balance of Input Credit and Service tax, in Journal Voucher a flag - Opening Balance has been Provided.

In re-modelled service tax, service tax/input credit opening balances can be brought forward /accounted only for those services which are already realised in the Previous Financial Year (for the transaction recorded till 30-6-2011).

Transactions recorded as per Point of Taxation Rule 2011

For the service bills accounted after 1-7-2011, as per the new Service Taxpoint of Taxation Rule 2011 the Service Taxinput credit/ Service tax liability will arise on raising invoice/advances are received and not on realisation. You can also account service tax/input credit opening balances of those transactions.

Example: On 2-4-2012 ABC Company has

* Input Credit opening balance of Rs. 12,360(Service Tax of Rs. 12000, Education Cess of Rs. 240 and Secondary and Higher Education Cess of Rs. 120) on services purchased from the Service Provider Info. Agency

 

* Service Tax opening balance of Rs. 6,180 (Service Tax of Rs. 6000, Education Cess of Rs. 120 and Secondary and Higher Education Cess of Rs. 60) on services sold to the Service Receiver Kamaal Services.

To account opening balances entries

1. Creating Service Tax Ledger - for Current Year

2. Create Party Ledger

3. Create Service Tax Ledger - of Previous Year

4. Create the Voucher Class in Journal Voucher

5. Record the Transaction in Journal Voucher

1. Creating Service Tax Ledger - for Current Year

To create the Service Tax Ledgers refer the topic - Common Service Tax Ledger

Note: From Rel 4.8 an option to provide Bank Details is provided in the Ledger Master.

Create the Tax ledger as shown below:

Note: Single Ledger can be used account both input and output Service Taxor create 2 ledgers to account input and output separately.

 

If you want to account Service tax , Education Cess and Secondary and Higher Education Cess separately create separate Ledgers.

2. Create Party Ledger

Create the Service Provider/Service Receiver Ledger as shown:

Service Provider

Service Receiver

3. Create Service Tax Ledger - of Previous Year

To account the Input credit and Service Tax of Previous year create the Ledger under Suspense A/c.

1. Input Service Tax Ledger

2. Output Service Tax Ledger

Note: User Can Create One ledger to account both input credit and output tax

 

Here we are creating TWO ledgers- One to account inputs and another account to output tax for the better understanding of the functionality.

Create the Input and Output Service Tax ledgers for previous year.

  • Enter the Name of the Input Service Tax Ledger.

  • Select the Group Suspense A/c from the List of Groups in the field Under.

  • Set Use for Assessable Value Calculation to No

 

Similarly create Output Service Tax Ledger.

Note: You can create the Previous Year Tax ledgers under Current Assets/Current Liabilities  without enabling the Service Tax feature.

4. Create the Voucher Class in Journal Voucher

To create Voucher Class in Journal Voucher

Go to Gateway of Tally > Accounts Info. > Voucher Types > Alter > select Journal from the List of Voucher Types

In Voucher Type Alteration screen

  • Tab down to Name of Class and mention the Class Name as - Service Tax Adjustments and press enter to view Voucher Type Class screen

  • In Voucher Type Class screen

  • Set the option Use Class for Service Tax Adjustments to Yes

  • Press Enter to save Voucher Type Class and Voucher Type Alteration screen

5. Record the Transaction in Journal Voucher To account Previous year's Input Service Tax

Let us now create a Journal Voucher to transfer Input service Tax.

Go to Gateway of Tally > Accounting Vouchers > F7: Journal

  1. Press F2 and change the date as 2-4-2012

  2. In Change Voucher Type screen select Service Tax Adjustments

  3. In Used for field select Opening Balance

  1. 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 Details screen.

  2. In Service Tax Details screen

  3. In Type of Ref field select New Ref

  4. In Name field the Reference Number will be defaulted as Jrnl/1-1

  5. In Type of Service field select Input Credit

  6. In Party Ledger field select Info. Agency

  1. In Category field select the service category for which opening balance of Input Credit is accounted.

  2.  In Service Amount field enter the service amount on which the credit is available. Enter Rs. 1,00,000

  3. Based on the amount specified in Service Amount field Service Tax, Education Cess and Secondary and Higher Education Cess will get calculated and displayed

Note: In a single invoice, Tally.ERP 9 allows to account Opening Balance of Input Credit of Multiple Services purchased from multiple parties.

  • Accept the Service Tax Details screen

  1. In Credit field select the Input Service Tax ledger created under Suspense A/c for previous year. Amount of Rs. 12,360 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:

  1. Press Enter to Accept.

On accounting input service credit opening balance, details will be displayed in Input Credit Summary report.

To view the details,

Go to Gateway of Tally > Display > Statutory Reports > Service Tax Reports > Input Credit Summary > Summary

6. Record the Transaction in Journal Voucher To account Previous year's Service Tax Liability

Go to Gateway of Tally > Accounting Vouchers > F7: Journal

  1. Press F2 and change the date as 2-4-2012

  2. In Change Voucher Type screen select Service Tax Adjustments

  3. In Used for field select Opening Balance

  1. In Debit field select Output Service Tax Ledger from the List of Ledger Accounts created for the current year

  2. In Amount field enter the Service Tax (Liability) amount. Enter Rs. 6,180

  3. In Credit field select Service Tax Ledger created for the current Financial Year and press Enter to view Service Tax Details screen

  4. In Service Tax Details screen

  5. In Type of Ref field select New Ref

  6. In Name field the Reference Number will be defaulted as Jrnl/2-1

  7. In Type of Service field select Taxable

  8. In Party Ledger field select Kamaal Services from the List of Ledgers

  1. In Category field select the service category for which opening balance of service Tax is accounted.

  2.  In Service Amount field enter the service amount on which the credit is available. Enter Rs. 50,000

  3. Based on the amount specified in Service Amount field Service Tax, Education Cess and Secondary and Higher Education Cess will get calculated and displayed.

Note: In a single invoice, Tally.ERP 9 allows to account Opening Balance of Service Taxof Multiple Services provided to multiple parties.

  • 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:

  1. Press Enter to Accept

On Accounting service Tax Opening balance details will be displayed in Service Tax Payables report

To view the details

Go to Gateway of Tally > Display > Statutory Reports > Service Tax Reports > Service Tax Payables > Bill Date Wise

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