FAQ-4 ( VAT / CST ):

How to book transaction in Tally.ERP 9 for service tax with VAT, wherein Service Tax is to be calculated at 33% (67% is claimed as abatement). The remaining amount being, the total of assessable value and VAT as the calculation is inclusive of tax

Solution

Consider the scenario where Excel Company bills service charges to Disha Traders, for Rs. 1,00,000. Service Tax is charged on Rs.33,000 (after claiming abatement of Rs. 67,000 on Erection, commission and installation charges). The balance amount (assessable value + VAT) of Rs. 67,000 is inclusive of VAT.

 

Step 1: Creating Ledgers

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

 

Sales Ledger

Name: Works Contract @ 12.5%.

Under: Sales Accounts.

Is Service Tax Applicable: Yes.

Default Service Category: Erection Commissioning and Installation.

Used in VAT Returns: Yes with VAT/Tax class - Works Contract @ 12.5%.

Use for Assessable Value Calculation: No.

 

Output VAT Ledger

Name: Output VAT WC @ 12.5%.

Under: Duties & Taxes.

Type of Duty/Tax: VAT.

VAT Sub Type: Output VAT.

VAT/Tax Class: Output VAT @ 12.5% on Works Contract

 

Service Tax Ledger

Name: Service Tax.

Under: Duties & Taxes.

Type of Duty/Tax: Service Tax.

Tax Head: Any.

Use for Assessable Value Calculation: No.

 

Step 2: Creating Voucher Class

Go to Gateway of Tally > Accounts Info. > Voucher Types > Alter > Select Sales

Name of Class: Service Tax + VAT

 

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In the Voucher Type Class screen go to the section - Default Accounting Allocations for each Item in Invoice.

Select Works Contract @ 12.5% ledger and enter the percentage as 56.50.

Select Output VAT WC @ 12.5% ledger and enter the percentage as 10.50.

Select Service Tax ledger and enter the percentage as 33.

NOTE: The percentage given under respective ledgers are to be entered only here for auto calculation of tax amount in the invoice.

Service Tax duty ledger has been defined as 33% as service Tax is applicable on 33% and balance is claimed as abatement.

The balance of 67% is considered as 100%. Hence Assessable value + VAT is 67% + 12.5% = 79.50%

Sale or Assessable value is 67/79.50*67 = 56.4649 rounded off to 56.50%

Output VAT is 12.5/79.50*67 = 10.50%

In Additional Accounting Entries, select Service Tax ledger to display the same separately in invoice.

 

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Accept the voucher type class screen.

 

Accept the voucher type alteration screen.

 

Step 3:

 

Recording Sales Invoice using Voucher Class

 

Go to Gateway of Tally > Accounting Vouchers > F8: Sales > Select the Voucher Class  Service Tax + VAT

 

 

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In the sales invoice select the party ledger enabled for service tax.

Select the stock item, enter the quantity and rate for the amount to get displayed. In Service Tax Details screen, enter or accept the service amount. All the values will get auto-calculated and displayed. Based on this calculation the Service tax amount appears in invoice.

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The sales invoice appears as shown:

 

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Accept the sales invoice, press page up key and click P: Print button (Alt+P) to print the invoice. Press F12: Configure and set Print VAT/CST Analysis of Items to Yes in Invoice Print Configuration.

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Generate the print preview of sales invoice. The print-preview appears with complete breakup of VAT and service Tax as shown:

 

 

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Step 4: Generating Reports

VAT Computation

Go to Gateway of Tally > Display > Statutory Reports > VAT > VAT Computation

The tax amount appears as per the calculation defined in voucher class of sales voucher type.

 

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Service Tax Payable Report

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

Press F12: Configure and set the following options to Yes:

  • Show Tax Break-up
  • Show Tax Break-up for Bill Amount
  • Show Tax Break-up for Realised Amount

The Service Tax Payable (Bill Date-wise) report appears as shown:

 

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Company Information @ Tally.ERP9
 
 
 
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