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Accounting for Advance Received Towards Services to be Rendered in Future and Deducting the Service Tax for Bill Raised Later

When a customer pays an advance for the services to be rendered, you can adjust the advance amount with the service tax after raising the bill.

  1. Record a receipt entry for the advance payment, as shown below:



    Note: On selecting the Service tax duty ledger, the Service Tax Allocation screen appears. Select the applicable service category and enter the service amount on which the service tax has to be charged.

    The completed screen appears as shown below:

  2. Record the Sales entry against the advance receipt entry recorded, as shown below:

  • Adjust the receipt bill reference under bill wise details screen, as shown below:

On passing the receipt voucher, the tax liability is displayed in the Service Tax Triangulation report.

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