FAQ-1 ( Service Tax):

How to Account for GTA transactions when an advance payment has been made to the transporter and TDS has been deducted

How to account for GTA transactions when an advance payment has been made to the transporter and TDS has been deducted.

Scenario- ABC Company made an advance payment of Rs. 90,000 to transporter Sai Goods Transporter and has deducted TDS while making the payment. TDS has been deducted as the transporter does not have a PAN number. Later, they record the purchase voucher and make the balance payment to Sai Goods Transporter. How can they account for these transactions?

Step 1: On 1-4-2014, ABC Company made an advance payment to Sai Goods Transporter for Rs. 90,000 and deducted TDS while making the payment.

a.     Go to Gateway of Tally>Accounting vouchers> F5: Payment.

b.    In Account field, select the cash/bank account.

c.     Under Particulars, select the service provider ledger (Here, Sai Goods Transporter) and specify the amount of Rs. 90,000. In bill details, select Type of Ref as Advance.

d.    Under Particulars, select the TDS duty ledger. In the TDS Details screen, select Type of Ref as New Ref.Ensure that the nature of payment is Payment to Transporters. The TDS amount gets filled automatically.

Accept the payment voucher. The payment voucher appears as shown below-

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Step 2: On 5-4-2014, ABC Company purchased transportation services from Sai Goods Transporter for Rs. 1,00,000. 

a.      Go to Gateway Of Tally>Accounting vouchers>F9:Purchase

b.    In Party’s A/c name field, select the party ledger ‘Sai Goods Transporter’.

c.     Under Particulars, select the transportation expense ledger (here, transportation charges) and specify the amount as Rs. 1,00,000.

d.    Service tax is applicable on the transportation service received. Select the type of service as Reverse Charge. Specify the service amount as Rs. 1,00,000. Record the service tax details as below-

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e.     In the taxable percentage screen, specify the details.

f.    In TDS nature of payment details screen, the nature of payment and assessable value are automatically filled. The screen appears as below-

 

 

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g.     Under Particulars, select the TDS duty ledger. In the TDS details screen, specify the first Type of Ref as Agst Ref and select the bill reference of the advance TDS deducted. Specify the second Type of Ref as New Ref for the balance amount. The TDS to be deducted is automatically filled. The TDS details screen appears as below-

 

 

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  h.     In bill wise details screen, specify the first Type of Ref as Agst Ref and select the bill reference of the advance payment to transporter. Select the second Type of Ref as New Ref. Specify a new reference (Eg. 2) for the balance amount. The bill wise details screen appears as follows-

 

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i.     In the service tax realization screen, select the Type of Ref as Agst Ref. Select the reference specified in the service tax details screen. The other details are filled automatically. The service tax realization screen appears as shown below-

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  j.     Accept the purchase voucher. The completed purchase voucher appears as shown below-

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Step 3:  On 6-4-2014, ABC Company made the balance payment of Rs. 8,000 to Sai Goods Transporter.

a.     Go to Gateway of Tally>Accounting vouchers>F5:Payment.

b.    In Account field, select the cash/bank account.

c.     Under Particulars, select the party ledger ‘Sai Goods Transporter’.

d.    In the service tax details screen, select the Type of Ref as Agst Ref and select the bill reference which was specified in the purchase voucher. The service tax details screen appears as shown below-

 

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e.     In the bill wise details screen, select the Type of Ref as Agst Ref and select the bill reference of the purchase voucher.

f.    Accept the payment voucher. The payment voucher appears as shown below-

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Step 4: On 6-4-2014, ABC Company raised the tax liability of service tax.

a.     Go to Gateway Of Tally>Accounting vouchers>F7: Journal. Select the voucher class created for service tax adjustments.

b.    In Used for field, select Tax on Reverse Charge.

c.     In the Service Tax liability screen, specify the details required.

d.    The completed journal voucher appears as shown below-

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Step 5: On 5-5-2014, ABC company paid the service tax liability to the Government.

a.     Go to Gateway of Tally>Accounting vouchers>F5:Payment.

b.    Select Alt S: Stat payment and select the Type of duty as Service tax and fill the details.

 The completed service tax payment voucher appears as shown below-

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