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How to Adjust Normal Advances towards Service Bill? @ Tally.ERP9

Query

Advance is received from the service receiver towards the services to be provided and advance has been accounted without service tax calculation. After rendering the service, service bill has to be genrated after adjusting the advance received. Is it possible adjust the noraml advances towards the sale of service? will such adjutment is reflected in all the service tax reports?

Solution

Tally.ERP 9 supports to adjust normal advances received (tax not calculated while accounting advances) form the customers towards the sales bill. The adjusted amount will be displayed in all the service tax reports as amount realised towards the service rendered.

Adjustment of Normal Advance received/ paid towards service bill (Sales/Purchase) is supported in Tally.ERP 9 from Release 2.1.

Example: On 28-6-2010 ABC Company received Rs. 70,000 as advance from Innovative Works. On 2-7-2010 ABC Company rendered Event Management Service for Rs. 1,75,000 to Innovative Works and while raising the bill adjusted advance of Rs.50,000

Step 1: Record a Receipt voucher (to account advance from customer)

Go to Gateway of Tally > Accounting Vouchers > F6: Receipt

1. In Credit field select Innovative Works and press enter to view Service Tax Details screen

2. In Service Tax Details screen

  • In Type of Ref select End of List and press Enter to come out of Service Tax Details screen

3. In Credit Amount field enter Rs. 70,000 and press enter to view Bill-wise Details screen

4. In Bill-wise Details screen

  • In Type of Ref field select Advance from Method of Adjustment. In Name field enter the Bill Name- IW/702. Amount will be displayed automatically

Note: The Type of Ref selected should be Advance.

Adjust Normal Advances towards Service Bill? @ Tally.ERP9
  • Press Enter to accept the Bill details

5. In Debit field select Cash or Bank Ledger depending on the nature of payment received. Here ABC Company received payment in cheque hence Bank Ledger - Canara Bank is selected. Amount will be displayed automatically.

6. Enter Narration, if any

Step 2: Record a Sales Voucher (to account the sale of services and adjust advance received towards the service bill)

Go to Gateway of Tally > Accounting Vouchers > F8: Sales

1. In Party A/C Name field select Innovative Works from the List of Ledger Accounts

2. Under Particulars select Sales- Event Mgt Services ledger and press enter to view Service Tax Details screen

3. In Service Tax Details screen

  • In Type of Ref field select New Ref
  • In Name field  Sale/11-1 will be displayed as the Reference Number. Accept the default number.
  • Based on the Type of Classification selected in the Service Receiver, Type of Service will be defaulted (displayed). By default Taxable is displayed and Tally.ERP 9 skips the field.
  • Based on the service Category selected in the Sales Ledger, category will be defaulted (displayed). By default Event Management Service is displayed and Tally.ERP 9 skips the field.
  • In Service Amount field enter the value of service provided Rs. 1,75,000
  • In Amount (Incl. of Tax) field the cumulative (collective) amount of Service amount and Tax will be displayed in this filed
Adjust Normal Advances towards Service Bill? @ Tally.ERP9

4. In Amount field of of Service Amount of Rs. 1,75,000 will be displayed

5. Select service  tax ledger e.g. Service Tax @ 10%. Service Tax amount will be calculated and displayed automatically.

6. Select education cess ledger e.g. Education Cess @ 2%. Education Cess amount will be calculated and displayed automatically.

7. Select secondary education cess ledger e.g. Secondary Education Cess @ 1%. secondary Education Cess amount will be calculated and displayed automatically.

8. In Bill-wise Details screen     

  • In Type of Ref select Agst Ref
  • In Name field select IW/702
  • In Amount field enter Rs. 70,000 (advance received on 28-6-2010)
  • In Type of Ref select New Ref
  • In Name field specify the reference number as ABC/00425
  • In Amount field the balance amount of Rs. 1,23,025 will be displayed automatically.
Adjust Normal Advances towards Service Bill? @ Tally.ERP9
9. On accepting the Bill-wise Details screen Tally.ERP 9 displays Service Tax Realisation for Advance Receipt Amount screen
Service Tax Realisation for Advance Receipt Amount in tally erp 9
  • If you want to consider the Advance Receipt amount as the Realised amount for Service Tax Bill you can select Type of Ref as Agst Ref.

  • In Name field select Sale 11/1 from the Pending Tax bill to adjust the advances towards the service sale. On selection of tax bill the Type of Service, Category and Realised amount will be defaulted automatically

Service Tax Realisation for Advance Receipt Amount in Tally.ERP 9
Service Tax Realisation for Advance Receipt Amount in Tally.ERP9
The completed sales voucher appears as shown
Accounting Voucher for Service Tax Realisation for Advance Receipt Amount in Tally.ERP9

10. Press Enter to Save.

Service Tax Payable Report

The normal advances adjusted towards the service sales will be reflected in Service Tax Payable report and From ST 3 Form

Go to Gateway of Tally > Display > Statutory Reports > Service Tax Reports > Service Tax Payables > Bill Date wise

Service Tax Payable Bill-wise Details in Tally.ERP 9
Note: Tally.ERP 9 will not dispaly the voucher reference for the realised amount. the advance adjusted will be considered as the realised on the date of sale.
 
 
 
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