When a service is received from a non-taxable territory like Jammu and Kashmir, the service receiver will be liable to pay the service tax applicable on the service.
On 26-05-2015, D-Day Events received courier services from GetThere Couriers which is located in Jammu and Kashmir worth ₹ 50,000. D-Day Events will be liable to pay the service tax applicable on this transaction.
To create a purchase transaction
Go to Gateway of Tally > Accounting Vouchers > F9: Purchase > Accounting Invoice
Select GetThere Couriers in the Party's A/c Name field. Ensure that the Jammu & Kashmir is selected in the State field.
Select the purchase ledger under Particulars.
Enter 50000 in the Amount field.
Press Enter.
Enter Narration, if required.
The Purchase invoice appears as shown below:
Press Enter to accept.
Since the entire service tax amount incurred will be the recipient's liability, D-Day Events will have to pay it to the department. They can either raise the liability using a journal voucher or can directly make a payment to the department without raising the liability.
'Recording Service Received from Non-taxable Territory (Service Tax)' has been shared with
