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Question Base [F.A.Q.]- Service TAX @ Tally.ERP 9

1. Basic of Service Tax

Let us understand the following definitions and terminologies used in Service Tax :

 

Features of service tax

       Service tax is payable on gross amount charged for service provided or to be provided, excluding material cost. Tax is also payable on reimbursement of expenses which form part of service. However, payments made by service provider as 'pure agent' of service receiver is kept outside the purview of Service Tax. More....

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2. Configuring and Setup Tally.ERP 9 for Service Tax

Central Sales Tax integrated in Tally.ERP 9 takes care of your inter-state transactions. It elimi- nates error-prone information and comments on appropriate forms to be issued/ received at the end of the month or a financial year or at any point of time. It takes a one-time configuration in Tally.ERP 9 for Central Sales Tax features to be activated
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3. Creating [Sundry Creditor] Masters for Service Tax

Let us create the following ledger masters related to Service Tax :

 

‡       Sundry Creditors

       Sundry Debtors

       Duties and Taxes

       Sales Accounts

                    Purchase Accounts

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4. Creating [Sundry Debtor] Masters for Service Tax

Let us create the following ledger masters related to Service Tax :

 

‡       Sundry Creditors

‡       Sundry Debtors

       Duties and Taxes

       Sales Accounts

                    Purchase Accounts

 
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5. Creating [Service Tax] Masters for Service Tax

Let us create the following ledger masters related to Service Tax :

 

‡       Sundry Creditors

‡       Sundry Debtors

‡       Duties and Taxes

       Sales Accounts

                    Purchase Accounts

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6. Creating [Sales Ledger] Masters for Service Tax

Let us create the following ledger masters related to Service Tax :

 

‡       Sundry Creditors

‡       Sundry Debtors

‡       Duties and Taxes

‡       Sales Accounts

                    Purchase Accounts

 
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7. Creating [Purchase Ledger] Masters for Service Tax

Let us create the following ledger masters related to Service Tax :

 

‡       Sundry Creditors

‡       Sundry Debtors

‡       Duties and Taxes

‡       Sales Accounts

                    Purchase Accounts

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8. Entering Transactions [ Creating Purchase Invoice]

On 15-4-09, FirstC Services received Professional Services from KrazyCool Agencies worth Rs. 1,75,000. The payment for the services was made on 16-4-2009.
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9. Entering Transactions [ Creating Payment Voucher]

Go to Gateway of Tally > Accounting Vouchers > F5: Payment
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10. Entering Transactions [ Creating Sales Invoice]

On 20-4-2009,  Consultancy  Services  worth  Rs.  7,00,000  was  provided  to  Computech

Systems and the amount was received on 25-4-2009.
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11. Entering Transactions [ Creating Receipt Voucher]

Go to Gateway of Tally > Accounting Vouchers > F6: Receipt
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12. Accounting for ADVANCE Receipts for a Services until the Invoice is raised

As mentioned earlier, Service tax is not applicable on the receipt of advance for a service until the invoice is raised. Service tax is to be paid on the amount received on the invoice value including the advance received.

 

 On 27-4-09, FirstC Services receives an advance of Rs. 70,000 for a service rendered by it from Global Business House as on 29-4-2009.

On 29-4-2009, FirstC Services, completed the contract and raised an invoice on Global Business   House  towards  Advertising  Agency  Services  with  10%  Service  Tax,  2% Education Cess and 1% Secondary Education Cess for a total amount of Rs 1,70,000 of which Rs 70,000 was received as an advance. Service tax, Education Cess and Secondary Cess is calculated on the total assessable value of Rs. 1,70,000.

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13. Accounting for Opening Service Tax Credit

The pending Service Tax payables and available Input Credit on Service Tax can be transfered from the previous financial year to the current financial year in Tally.ERP 9.

 

 On 30-4-09, FirstC Services decided to pay Service Tax to the government.  Information pertaining to the Previous year is given below:

        Input Service Tax Credit for Rs. 1,030 on 10,000 bill value

                    Service Tax payable of Rs. 2,060 on 20,000 bill value

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14. Payment of Service Tax AND Printing GAR-7 Challan

On 05-5-2009, FirstC Services, paid Service Tax of Rs. 5506.72 towards Advertising Agency Services, vide cheque no. 551899 after adjusting Input Service Tax Credit on Telephone Services.
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15. Service Tax Reports

Service Tax reports are the reports which is used to view all the Service Tax related details at one place. The reports available in the menu are:

 

       Service Tax Payables

       Input Credit Form

       ST3 Report

 

 Go to Gateway of Tally > Display > Statutory Reports

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16. Practice Exercise

1. ProC Advertising Agency, earns its major income from advertising service, which comes under the category Advertisement under Service Tax.

 

                     Create the following ledgers in the masters and select/enter the fields as given in the table.

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Question Base [F.A.Q.]- Centreal Sales Tax (CST) @ Tally.ERP 9
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Question Base [F.A.Q.]- Service TAX @ Tally.ERP 9
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