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Accounting Service Tax Expenses or Purchases in Payment Voucher @ Tally.ERP9


Is it possible to record service tax expenses or purchases in Payment Voucher? 


In some cases users will be making payment towards expenses on which service tax is applicable and want to record expenses through Payment Voucher. 

Example: Payment of Telephone Bill inclusive of Tax through Payment voucher

In Tally.ERP 9 Release 3.0, service tax expenses or purchases can be accounted in Payment voucher

Example: On 5-1-2011 ABC Company is making payment towards the Telephone Bill of Rs.16,545 (Inclusive of Service Tax)

Step 1: Create Expenses Ledger

To create the Service Expense Ledger

Go to Gateway of Tally > Accounts Info. > Ledgers > Create

  • Enter the Name of the service expense ledger you wish to create, for e.g., Telephone Expenses.
  • Select Indirect Expenses as the group name in the Under field.
  • Set Inventory values are affected to No.
  • Set Is Service Tax Applicable to Yes.
  • In Default Service Category field select Telephone Services from the List of Service Categories.

Note: All the Expenses subject to Service Tax have to be associated with relevant predefined Service Category. The option Any can be selected from the List of Service Categories, where the user doesn\'t want to define the Service Category during Ledger creation. This allows the user to use an Purchase/Expense Ledger (as a common ledger) to account multiple Service Categories.

tally erp 9 help
  • Press Enter to save.

Step 2: Record the transaction in Payment Voucher

To record the Payment Voucher

Go to Gateway of Tally > Accounting Vouchers > F5: Payment

  • Press F2 and change the date to 5-1-2011
  • In Debit field select Telephone Expenses ledger and press enter to view Service Tax Payment Type screen
  • In Service Tax Payment Type screen, select Expenses and press enter to view Service Tax Details screen
Service Tax Payment Type screen in tally erp 9
  • In Service Tax Details screen
    • Type of Ref: Select New Ref from the Method of Adjustment. New Ref is selected for new financial transactions.
    • Name: Tally.ERP 9 displays the reference number, which is a combination of abbreviation of Journal and Voucher Number and Line Number (example: Pymt/5-1) which can be changed by the user. Input service credits are tracked with these Reference Numbers.
    • Party Ledger: In this field mention the name of the party to whom the payment is made.

Note: To select the party ledger, it is must to have a party ledger created. If the ledger is not created use Alt+C from party ledger field to create the ledger.

  • Type of Service: Based on the Type of Classification selected in the Service Provider, Type of Service will be defaulted (displayed). By default Input Credit is displayed and Tally.ERP 9 skips the field.
  • Category: Based on the service Category selected in the Expense Ledger, category will be defaulted (displayed). By default Telephone Services is displayed and Tally.ERP 9 skips the field.
  • Amount (Incl. of Tax): In this field specify the bill amount (inclusive of service tax). After specifying the Inclusive of service tax amount, service tax of 16,545 and tax bifurcation will be displayed automatically.
Service Tax Details for Expeses in Tally erp 9
  • In Amount filed the Service Amount of Rs. 13,971  will be defaulted automatically
  • In Debit field select service tax ledger e.g. Service Tax @ 10.30%. Service Tax amount will be calculated and displayed automatically.

Note: In the above case we have one service tax ledger to account the service tax amount. If you have Tax Head specific Service tax ledgers the same can be selected to account the tax amount.

  • In Credit field select the Bank/Cash Ledger depending on the Nature of Payment. Total amount (Rs. 15,545) of Service Cost plus the Service Tax will be displayed in Amount column.

The completed Payment Voucher is displayed as shown

Accounting Voucher Creation for Service Tax Payment in Tally.ERP 9
  • Press Enter to save and accept

Note: Recording of Service Tax Expenses or Purchases in Payment Voucher is also supported in Single Entry Mode.

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TIPS & TRICKS @ Tally.ERP9 GST for Tally.ERP9
1 > Financial Statement Report 1 > Tips & Tricks @ Tally.ERP 9 1 >Introduction to GST ( IGST . CGST, SGST )
2 > Accounts Book & Register Report 2 > FAQ's @ Tally.ERP 9 2 >Calculation of GST ( IGST, CGST & SGST)
3 > Stock Register / Reports 3 > Short Cut Keys @ Tally.ERP 9 3 > GST on Tally.ERP 9 ( With Practical Assignment )
4 > Job Costing Reports 4 > Tips-Weekly Refresher @ Tally.ERP9 4 > Generate GSTR-1 Returns / Reports under Tally.ERP9
5 > Pay Roll Register Reports   5> Status Reconciliation (GSTR-1)
6 > Point of Sale Register Reports   6 > Challan Reconciliation Report for GST Payments
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