Service Tax in Tally.ERP9

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How to enable and maintain Service Tax in Tally.ERP9

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Service Tax in Tally.ERP 9 : 

Service Tax in Tally.ERP 9

Service Tax : 

Service Tax Service Tax is an indirect tax levied on certain category of services provided by a person, firm, agency, etc. The Government of India has marked a set of services as taxable under the service tax structure. The seller provides a service and the responsibility of paying the service tax to the government rests with the seller.

Service Tax : 

Service Tax As of date, service tax is applicable on 102 categories of services. A few of the listed services have an abatement facility. Service tax returns are to be filed to the Commissionerate of Service Tax for the fiscal half-year. Information on the registration, rules, list of services, rate of service tax, forms, etc can be found on the official website for service tax - http://www.servicetax.gov.in/.

Service Tax : 

Service Tax A person/firm providing a service that comes under the service tax category has to pay service tax. Service tax is to be shown separately in the invoice and is payable based on the payment realized and not on the total amount shown in the invoice.

Service Tax : 

Service Tax When you buy a service that falls under service tax category, you avail service tax credit based on the payment made. You pay service tax on the services that you sell and get credit on the service tax payable when you buy a service.

Adjusting credit? : 

Adjusting credit? While paying service tax on sale of services that come under the service tax category, you can adjust service tax credit availed on purchase of services (Buyer). This deduction is called adjusting credit against service tax. The difference between the service tax that you have to pay for selling services and the service tax credit on purchases that can be adjusted is the payable service tax.

Input Credit : 

Input Credit Service tax (sales) that is adjustable against service tax credit (purchases) is also called availing input credit.

Service Tax – Flow Chart with Example : 

Service Tax – Flow Chart with Example

Assessable value : 

Assessable value Service tax is calculated on the assessable value. The assessable value?Service charge value minus abatement and expenses.

Abatement : 

Abatement The government has given a deduction on the value to be considered for service tax on a few categories of services. For example, some categories of services include material value. A caterer has to procure materials to prepare food products and sell services. Service tax is charged on the total amount for the service and does not include the rate of the materials procured. Hence a deduction is provided. This deduction from the service charges to be considered for service tax is called abatement. Abatement is either a percentage of the service charges.

Example: : 

Example: Service Charges =>Rs. 10, 000/- If an abatement of 30% is applied, then abatement=> Rs. 3, 000/- The Assessable value=> Rs. 7, 000/- (10,000 – 3,000) Service tax @ 10 % on Rs.7, 000/=>Rs.700/-

Expenses : 

Expenses Expenses can be deducted from the total service charge to get the taxable amount. Expenses are allowed only for those services which are provided by the assessee as a Pure Agent.

Payment of ServiceTax : 

Payment of ServiceTax A seller provides a service to a buyer and bills the buyer for the service. The bill is inclusive of the service tax. The seller does not have to pay service tax on the total bill amount but only on the payment received.

Example: : 

Example: Service Charges =>Rs. 10, 000/- Service tax @ 10% =>Rs.1,000/- Cess on Service Tax @ 2% =>Rs.20/- Secondary higher education cess @ 1% =>Rs.10/- Total bill =>Rs. 11,030/- The total service-tax => Rs. 1,030/-

Service Tax… in case of Part payment received : 

Service Tax… in case of Part payment received Assuming, the buyer pays the seller Rs.5, 000/- as part payment. The service-tax payable for the payment received is calculated as given below: Service Charges (10,000 x 5,000)/11,030 =>Rs. 4533.09 Service tax on Rs.5000/- is (1,000 x 5,000)/11,030=>Rs. 453.31 Cess on service tax is(20 x 5,000)/11,030=>Rs.9.07 Secondary Cess on Service Tax is (10 x 5,000)/11,030=>Rs. 4.53

Service Tax… in case of Part payment received : 

Service Tax… in case of Part payment received Service tax is payable only on the value of payment received by the seller and not on the gross amount charged or billed (invoice value). When advance is received Service Tax to be calculated on such advances and to be paid to the government.

Payment of Service Tax : 

Payment of Service Tax The service tax amount is to be paid using Form GAR 7 in any Nationalised Commercial Bank If your company is a corporate company, service tax is payable on a monthly basis by the 5th of the following month.

Payment of Service Tax : 

Payment of Service Tax Non-corporate like individuals, proprietary firms, partnership firms and so on, have to pay service tax for the fiscal quarter. The payment is to be made by the 5th day of the month following the quarter. For the corporate and non-corporate bodies, service tax for the month of March is payable by 31st of March.

Filing Service Tax Returns : 

Filing Service Tax Returns Corporate and non–corporate organizations have to file service tax half-yearly with details in Form ST-3 and Input Credit Form (Form 5) to the Commissionerate of Service Tax. The filing of returns should be within 5 days from the last day of the fiscal half-year. Copies of all GAR – 7 issued during the period must be attached.

Service Tax – Flow Chart : 

Service Tax – Flow Chart

Features of Service Tax in Tally.ERP 9 : 

Features of Service Tax in Tally.ERP 9 Service tax integrated in Tally.ERP 9… Eliminates error-prone information, incorrect remittance, penalties, interests, compliance issues, etc. Needs a one-time configuration for service tax features to be activated. Tracks bill-wise (bill-by-bill) detail and automatically calculates service tax payable and input credit with the flexibility to make adjustments later. Service tax is part of a regular transaction.

Features of Service Tax in Tally.ERP 9 : 

Features of Service Tax in Tally.ERP 9 Information on service tax is maintained and produced category-wise, which is mandatory in service tax returns. Adjusts input credit towards service tax payable. Accounts for abatement and expenses. Provision for exemption notification details. Built-in assessable value feature on which service tax is calculated.

Features of Service Tax in Tally.ERP 9 : 

Features of Service Tax in Tally.ERP 9 Transfer earlier pending service tax payable and available service tax input credit in to Tally.ERP 9 Reports are generated as per government suggested format. Print and file reports: GAR-7 Challans, Input Credit Form, ST 3 Report . Management Information Services (MIS) reports: Service Tax Payable Report and Input Credit Form.

Step:1 Enabling Service Tax : 

Step:1 Enabling Service Tax

Step:1 Enabling Service Tax : 

Step:1 Enabling Service Tax

Tally Displays Service Categories : 

Tally Displays Service Categories

Tally Displays Service Categories : 

Tally Displays Service Categories

Tally Displays Service Categories : 

Tally Displays Service Categories

Tally Displays Service Categories : 

Tally Displays Service Categories

Step:2 Creating Ledgers : 

Step:2 Creating Ledgers Sales Ledgers for Services

Creating Sales Ledger : 

Creating Sales Ledger

Step:2 Creating Ledgers : 

Step:2 Creating Ledgers Sales Ledger for Services Purchase Ledger for Services

Creating Purchase Ledger : 

Creating Purchase Ledger

Step:2 Creating Ledgers : 

Step:2 Creating Ledgers Sales Ledger for Services Purchase Ledger for Services Output Service Tax Ledger

Creating Output Serivce Tax Ledger : 

Creating Output Serivce Tax Ledger

Step:2 Creating Ledgers : 

Step:2 Creating Ledgers Sales Ledger for Services Purchase Ledger for Services Output Service Tax Ledger Input Service Tax Ledger

Creating Input Serivce Tax Ledger : 

Creating Input Serivce Tax Ledger

Step:2 Creating Ledgers : 

Step:2 Creating Ledgers Sales Ledger for Services Purchase Ledger for Services Output Service Tax Ledger Input Service Tax Ledger Customer Ledger

Creating Customer Ledger : 

Creating Customer Ledger

Step:2 Creating Ledgers : 

Step:2 Creating Ledgers Sales Ledger for Services Purchase Ledger for Services Output Service Tax Ledger Input Service Tax Ledger Customer Ledger Supplier Ledger

Creating Supplier Ledger : 

Creating Supplier Ledger

Entry No.1 – Journal entry to adjust opg bal. of service tax : 

Entry No.1 – Journal entry to adjust opg bal. of service tax

Entry No. 2 – Sales entry : 

Entry No. 2 – Sales entry

Entry No. 3 – Receipt entry : 

Entry No. 3 – Receipt entry

Entry No. 4 – Sales entry : 

Entry No. 4 – Sales entry

Entry No. 5 – Receipt entry. : 

Entry No. 5 – Receipt entry.

Entry No. 6 Sales entry – exempted services rendered. : 

Entry No. 6 Sales entry – exempted services rendered.

Entry No. 7 Purchase entry. : 

Entry No. 7 Purchase entry.

Entry No. 8 Payment entry. : 

Entry No. 8 Payment entry.

Entry No. 9 Payment entry – Service Tax Paid : 

Entry No. 9 Payment entry – Service Tax Paid

Slide 51: 

Service Tax for Goods Transport Operators

Service Tax – Goods Transport Operators : 

Service Tax – Goods Transport Operators Transporter bills freight charges to customer. Customer is the service receiver. It is Service receiver’s liability to pay service tax on transporter’s bill. If taxable amount is less then TDS is not applicable, other wise while making payment to transporter, Customer will deduct TDS and balance is paid to transporter.

Create Freight Charges Ledger?Indirect Expenses : 

Create Freight Charges Ledger?Indirect Expenses

Create Services Tax Adj Ledger?Current Assets : 

Create Services Tax Adj Ledger?Current Assets

Create ABC Transporters Ledger? Sundry Creditors : 

Create ABC Transporters Ledger? Sundry Creditors

Create Service Tax Due Ledger under ‘Duties & Taxes’ : 

Create Service Tax Due Ledger under ‘Duties & Taxes’

Create Service Tax on Freight under ‘Duties & Taxes’ : 

Create Service Tax on Freight under ‘Duties & Taxes’

Journal entry : 

Journal entry

Journal entry : 

Journal entry

Journal entry : 

Journal entry

Payment entry : 

Payment entry

Payment entry i.e. tax payment to Government : 

Payment entry i.e. tax payment to Government

Journal Entry - Transfer the amount of service tax paid : 

Journal Entry - Transfer the amount of service tax paid

Slide 64: 

Service Tax & TDS Deduction in Same Entry

Create Supplier Ledger? Sundry Creditors : 

Create Supplier Ledger? Sundry Creditors

Create Service Tax Payable on Freight Charges Ledger? Duties & Taxes. : 

Create Service Tax Payable on Freight Charges Ledger? Duties & Taxes.

Create TDS on Freight Ledger? Duties & Taxes. : 

Create TDS on Freight Ledger? Duties & Taxes.

Journal Entry : 

Journal Entry

Journal Entry : 

Journal Entry

Journal Entry : 

Journal Entry

Journal Entry : 

Journal Entry

Journal Entry : 

Journal Entry

Payment Entry : 

Payment Entry

Payment Entry : 

Payment Entry

Payment Entry : 

Payment Entry

Payment Entry : 

Payment Entry

TDS Challan Reconciliation : 

TDS Challan Reconciliation

Slide 79: 

Service Tax & VAT in Same Entry

Purchase Entry : 

Purchase Entry

Sales Entry : 

Sales Entry

Receipt Entry : 

Receipt Entry

Payment of Service Tax : 

Payment of Service Tax

Payment of Service Tax : 

Payment of Service Tax

Payment of Service Tax in Tally.ERP 9 : 

Payment of Service Tax in Tally.ERP 9

Payment of Service Tax in Tally.ERP 9 : 

Payment of Service Tax in Tally.ERP 9

Payment of Service Tax : 

Payment of Service Tax

Slide 89: 

CENVAT Credit against Service Tax.

CENVAT Credit against Service Tax. : 

CENVAT Credit against Service Tax. To adjust Service Tax payment using Excise Credit. To adjust a Service Tax payment against Excise credit, create a voucher class and make an entry in journal voucher using the class.

Creating a Service Tax voucher class in Journal Voucher : 

Creating a Service Tax voucher class in Journal Voucher

Creating a Service Tax voucher class in Journal Voucher : 

Creating a Service Tax voucher class in Journal Voucher

Entry of Journal Voucher using Voucher Class : 

Entry of Journal Voucher using Voucher Class

Entry of Journal Voucher using Voucher Class : 

Entry of Journal Voucher using Voucher Class

Notes on CENVAT Credit : 

Notes on CENVAT Credit The adjusted values of CENVAT Credit is displayed under section 4A(l)(a)(ii) of ST3 Report. The amount refunded for non providing of the service for which service tax was paid on receipt of such money can be adjusted against the liability of the subsequent period U/S 6(3). This adjustment entry can be recorded in Journal using the voucher class by selecting Service tax Adjustment U/S 6(3). Any amount paid in excess of the liability in any month or quarter can be adjusted against subsequent month or quarter subject to conditions U/S 6(4A). This adjustment entry can be recorded in Journal using the voucher class by selecting Service tax Adjustment U/S 6(4A).

Notes on CENVAT Credit : 

Notes on CENVAT Credit Assessee needs to produce the source documents to claim the benefit of credit adjustment U/S 6(3) and U/S 6(4A). The source document details can be viewed in ST3 Report under section 4B. The adjusted values U/S 6(3) and U/S 6(4A) are displayed in section 4A(l)(a)(iii) and 4A(l)(a)(iv) respectively in ST3 Report. Credit adjusted is divided into Service tax, Education Cess and Secondary and Higher Education Cess paid.

Slide 97: 

Payment of Arrears, Penalty & Interest…

Creating Vouchers for Arrears : 

Creating Vouchers for Arrears

Creating Vouchers for Arrears : 

Creating Vouchers for Arrears

Slide 100: 

Service Tax Statutory Reports

Service Tax Payable : 

Service Tax Payable

Input Credit Form : 

Input Credit Form The Input Credit Form report displays the details of Service Tax Input Credit available with the company as on a specified date. The same can be set off against Output service tax liability as per the requirement.

Slide 104: 

Date of the purchase invoice

Slide 105: 

The reference number of the purchase invoice

Slide 106: 

Name and Service Tax Registration number of the service provider.

Slide 107: 

Address of the service provider.

Slide 108: 

Name of the category of service purchased.

Slide 109: 

This column displays Assessable value, Service Tax and Cess amount (Education Cess and Secondary Education Cess) as per the invoice.

Slide 110: 

The net assessable value for the service purchased.

Slide 111: 

Service tax payable as per the purchase invoice.

Slide 112: 

Cess (Education Cess + Secondary Education Cess) on the service tax as per the purchase invoice.

Slide 113: 

This column displays the Assessable value, Service Tax and total Cess (Education Cess and Secondary Education Cess) calculated on the payment made against the invoice value.

Slide 114: 

The realised assessable value based on the payment made.

Slide 115: 

The realised amount of service tax credit based on the payment made.

Slide 116: 

Realised cess (Education Cess and Secondary Education Cess) on the Service Tax credit based on the payment made.

Slide 117: 

Available Service Tax Credit inclusive of Educational Cess and Secondary Educational Cess.

ST3 Report : 

ST3 Report The ST3 Report is a statutory report. This report displays the ST3 Form in the government prescribed format that is used to file Half – Yearly Service Tax returns to the Commissionerate of Service Tax.

ST3 Report : 

ST3 Report

Slide 126: 

Plz forward your queries\feedback\suggestions to info@baseenterprise.com

Slide 127: 

Thank you…