A pure agent is a service provider who is a liaison between another service provider and a client. An expense incurred by the pure agent is exempt from Service Tax.
Tally.ERP 9 provides the facility to exclude the costs and expenses incurred by a service provider acting as a Pure Agent from total service charges to get taxable amount.
On 28-4-2015, D-Day Events acted as a pure agent in getting event management services to Expecto Magic. The service cost amounted to ₹ 1,50,000, including the pure agent expenses of ₹ 25,000.
To record the transaction
Go to Gateway of Tally > Accounting Vouchers > F8: Sales > Accounting Invoice
Select Expecto Magic in the Party's A/c Name field.
Ensure that the Type of service for this party is Pure Agent.
To do that
Enable Set/alter service tax details, in the ledger creation screen.
Select Pure Agent as the Type of service.
Press Ctrl + A to accept.
Select the sales ledger under Particulars.
Enter the pure agent expenses, 25000, in the Allowable Expenses field.
The Service Tax Details screen appears as shown below:
Enter 150000 in the Amount field.
Select duties and taxes ledger. The service tax rate will be calculated automatically one the difference amount.
Press Enter.
Click A: Tax Analysis. Click F1: Detailed to view the tax breakup of the two service category.
Enter Narration, if required.
The Sales invoice appears as shown below:
Press Enter to accept.
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