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Purchase of Service Inclusive of Tax
D-Day Events is an event management company. They render event management services to their clients. They receive advertising service from AtoZ company.
On 18-11-2015, D-Day Events received advertising services worth ₹ 2,00,000 from AtoZ Company on which service tax is charged at @ 14.0% and Swachh Bharat Cess (SBC) is charged @ 0.50%. The invoice number of the bill issued by AtoZ is AZ/04/025 dated 16-11-2015.
To record the transaction
1. Go to Gateway of Tally > Accounting Vouchers > F9: Purchase > Accounting Invoice.
2. Enter AZ/04/025 in the field Supplier Invoice No.
3. Enter 16-11-2015 in the field Date.
4. Select AtoZ Company in the field Party's A/c Name.
5. Select the purchase ledger under Particulars.
6. Enter 200000 in the field Amount.
7. Select duties and taxes ledger. The service tax and SBC rate will get calculated automatically using the details defined at the ledger level.
8. Press Enter to save.
9. Enter Narration, if required.
The Purchase invoice appears as shown below:
10. Press Enter to accept.
On 16-11-2015, Straight Scenes Designs received advertising services from CreativeIn Ad Firm worth ₹ 3,00,000, inclusive of service tax. Let us see how to record a purchase transaction for this scenario.
To record the transaction
1. Go to Gateway of Tally > Accounting Vouchers > F9: Purchase > Accounting Invoice.
2. Click F12: Configure.
3. Set the option Allow Inclusive Tax during entry for Service Tax? to Yes.
4. Press Ctrl + A to accept.
5. Enter the Supplier Invoice No.
6. Enter the Date (supplier invoice date).
7. Select CreativeIn Ad Firm in the Party's A/c Name field.
8. Select the purchase ledger under Particulars.
9. Enter 300000 in the Enter Amount field.
The Inclusive of Service Tax screen appears as shown below:
10. Select duties and taxes ledger. The service tax rate will get calculated automatically using the details defined at the ledger level.
11. Click A: Tax Analysis to view the tax breakup.
12. Enter Narration, if required.
The Purchase invoice appears as shown below:
13. Press Enter to accept.