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Sale of Exempt Services (Service Tax)

The concept of Negative list of Services was introduced in the Finance Act, 2012; according to which all services except the  those specified in Negative list, or been exempted specifically from Service Tax, are liable for Service Tax.

Sale of Exempt Services

On 15-4-2015, AtoZ Company rendered advertising services to UNDP  (India)  worth ? 1,00,000. Being an agency of the UN, the sales rendered to UNDP (India) is exempt of service tax. Let us see how to record a sales transaction in this scenario.

To create the party master

1. Create a party master under Sundry Debtors, as shown below:
   
   
2. Enter details in the Service Tax Details screen as shown below:
   
   
3. Press Enter to save.

To record exempt sales

1. 1. Gateway of Tally > Vouchers > press F8 (Sales).

2. Alternatively, press Alt+G (Go To) > Create Voucher > press F8 (Sales).

3. Press Ctrl+H (Change Mode) to select the required voucher mode (Accounting Invoice, in this case)
4. Enter the reference number in the field Ref.
5. Select UNDP (India) in the field Party’s A/c Name.
6. Select the sales ledger under Particulars.
7. Enter 1,00,000 in the field Enter Amount.
8. Press Enter to save.

The sales invoice appears as shown below:

      7.Press Enter to save.