Professional Documents
Culture Documents
Lesson Objectives
On completion of this lesson, you will be able to
Enable Service Tax in Tally.ERP 9
Create the masters neccesary for Service Tax transactions
Record Service Tax transactions
Generate Service Tax reports and challans in Tally.ERP 9
Service Tax is a tax on services rendered. The person, one who renders the service, is liable to
pay service tax. Service tax was imposed for first time in 1994 and its scope is increasing every
year.
Service Tax
Taxable Service
Service tax is payable on 'taxable service'. The definition of taxable service is different for each
class of services, e.g. in case of advertising agency, any service provided to a client, by an advertising agency in relation to advertisement, in any manner will be 'taxable service'.
Value of Taxable Service
Service tax is payable on 'value of services'. Value of Service shall be the gross amount charged
by the service provider for such service rendered by him.
Service Provider
As defined u/s 65(105) a service provider is one who provides taxable service.
Person liable to pay service tax
Every person providing taxable service to any person has to pay service tax at the prescribed
rates. In few cases, tax is payable by service receiver, under reverse charge method.
Exemption from service tax
Small service providers whose total value of services provided (including exempt and nontaxable services) is less than Rs 10 lakhs in previous year are not required to pay service
tax in current financial year till they reach turnover of Rs 10 lakhs.
Services provided to SEZ units or developer for consumption within SEZ are exempt.
Refund is eligible for specified services utilised for export.
Services provided by RBI are exempt but service provided to RBI are not exempt.
Rate of Service Tax
According to Section 66 of Finance Act, 1994 there shall be levied a tax at the rate of 10% of
value of taxable services referred in section 65(105) of Finance Act, 1994. In addition, education
cess @ 2% and Secondary Higher Education cess @ 1% is payable. Thus, total service tax is
10.3%.
Let us consider the following example to understand how Service Tax is calculated :
Particulars
a.
b.
10,000
c.
20
d.
10
1,000
Rs.
11,030
Service Tax
Assuming the buyer pays the seller only Rs. 5,000 the Service Tax payable is calculated as
below:
Particulars
Rs.
a.
(10,000 x 5,000)/11,030
b.
(1,000 x 5,000)/11,030
c.
(20 x 5,000)/11,030
d.
4,533
453
9
(10 x 5,000)/11,030
Total Payment Received
5
5,000.00
Abatements
Abatement refers to the percentage of tax exemption provided by the government on the value to
be considered for calculation of Service Tax. It is either a percentage of the service charges or a
lump sum amount.
Particulars
Rs.
a.
Charge on Service
10,000
b.
3,000
c.
7,000
Service Tax
Service Tax
Service Tax
Press Enter to view the Company Service Tax Details screen and enter the details as
shown below:
The fields that appears in the Company Service Tax Details screen are briefed below:
1. Service Tax Registration No.: Enter the registration number allotted to you by the Service Tax
Department.
Service Tax
2. Date of Registration: Enter the date of registration of Service Tax for your service.
3. Assessee Code: Enter the code given to your company by the Service Tax Department.
4. Premises Code No. Enter the Premises code/Location code. It is the identification number
provided to the service tax payers.
5. Type of Organisation: Select the type of your organisation from the List of Organisations
menu.
6. Is Large Tax Payer This field is set to Yes/No base on the amount of tax paid by the assessee.
Large Tax payers are those assesses who pay large amount of Tax. They
are the eligible taxpayer for the purposes of being served by the LTU. For
e.g.: Rs.5,00,00,000.
7. Large Tax payer Unit : Enter the name of the unit where the large tax payers pay tax.
8. Division: Enter the code and name of the division your company falls under.
9. Range: Enter the code and name of the range your company falls under.
10.Commissionerate: Enter the code and name of the Commissionerate of Service Tax Department, under which the address of your Companys registered office is located.
Service Tax
The Service Category screen has a Name field showing the category, followed by the
Country Code, Accounting Code, Category Code and Sub-Clause No. fields.
The Applicable From column displays the date from which the Abatement (%), Service
Tax Rate (%), Cess Rate (%) and Secondary Cess Rate (%) are applicable.
Each service category has a predefined master in Tally.ERP 9 which can also be updated for
statutory changes from the Tally website (www.Tallysolutions.com). You can view the values for
each of these categories in Tally.ERP 9.
Service Tax
8. Under Mailing Details enter the Address, State and PIN Code details
9. Under Tax Information enter the PAN/IT No.
10.Enable the field Set/Alter Service Tax Details to Yes
11.In Service Tax Details screen enter the Service Tax Registration details
9
Service Tax
In the Service Tax No. field enter the service tax registration number of the party
In the Service Tax Reg. Date field enter the service tax registration date
10
Service Tax
7. Under Mailing Details enter the Address, State and PIN Code details
11
Service Tax
12
Service Tax
13
Service Tax
Under
Type of
Category
Duty/Tax
Name
Service Tax
Advertising
Agency
Nil
Service Tax
Telephone
Service
Nil
HSBC
Bank Accounts
5,00,000
14
Opening
Balance
Service Tax
15
Service Tax
16
Service Tax
Tally.ERP 9 allows you to make the necessary changes in the Service Tax
Details screen.
6. In The Bill-wise Details screen, select New Ref and type the Name as KC-1.
Select INPUT Service Tax from the List of Service Tax Ledgers.
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Service Tax
18
Service Tax
1.
2.
3.
4.
5.
19
Service Tax
Select KC-1 from the List of Pending Bills and accept the Bill-wise Details screen.
6. Enter Narration, if any.
The completed Payment Voucher appears as shown below:
20
Service Tax
21
Service Tax
7. The Bill-wise Details screen, select New Ref from the Method of Adj.
22
Service Tax
8.Enter the Name as 1 and select the Service Tax ledger as Output Service Tax.
The completed Sales Invoice appears as shown below:
23
Service Tax
24
Service Tax
4. Select the Sales Voucher from the List of Pending Bills to default Service Tax Ledger and
Amount.
5. Accept the Bill-wise Details screen.
6. In Debit field select HSBC Bank from the List of Ledger Accounts, Amount is defaulted automatically.
7. In Narration field enter the Cheque Number.
The completed Receipt Voucher is displayed as shown:
25
Service Tax
26
Service Tax
The Service Tax payable report displays Rs. 72,100 as the Service Tax due
Service Tax
4. Type the Name as GBH and select Output Service Tax as the Service Tax Ledger.
5. In Debit field select HSBC Bank from the List of Ledger Accounts, Amount is defaulted automatically.
6. In Narration field enter the Cheque Number.
The completed Receipt Voucher appears as shown below:
28
Service Tax
29
Service Tax
In Service TaxBill Wise Details for section, the Bill-Wise Details are
defaulted automatically. The Bill-Wise details can also be changed to the
required reference number.
30
Service Tax
31
Service Tax
32
Service Tax
33
Service Tax
Service Tax Payable under Duties & Taxes with an opening balance of Rs. 2060.
The completed Service Tax Payable ledger creation screen appears as shown below:
34
Service Tax
5. In the Service Tax Opening Bill Details screen, enter the details as shown below:
35
Service Tax
36
Service Tax
37
Service Tax
Service Tax
Figure 17.38 Service Tax Bill Details for Output Service Tax
3. In the Service Tax Bill Details screen, select all the bills in the List of Service Tax Bills.
4. Select the INPUT Service Tax in the credit field.
The Service Tax Bill Details for INPUT Service Tax appears as shown below:
39
Service Tax
Figure 17.39 Service Tax Bill Details for Input Service Tax
The period for which the payment is made is specified in the above screen.
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Service Tax
7. Specify the Service Tax Period with Challan No., Date, Bank Name, Cheque/Draft/Pay
Order No. and Cheque Date.
8. Enter the cheque no. in Narration field.
The completed Payment Voucher appears as shown below:
41
Service Tax
Use the Print Preview Option (ALT+I) to view the print preview of the challan.
The printed GAR-7 Challan appears as shown below:
42
Service Tax
Service Tax
44
Service Tax
Use the Alt+P key or click on Print option to print the report.
The fields which appears in the Service Tax Payable report are briefed
below:
Date - The date of the sales invoice is displayed.
Ref. No.: The reference number given to the sales invoice.
Partys Name: The name of the customer to whom the sale is made.
Category Name: The name of the category of service selected from
the list of service categories.
Bill Value: The total invoice amount.
Assessable Value: The assessable value for the service.
Service Tax: The total Service Tax calculated on the assessable
value.
Cess: The total cess on the Service Tax.
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Service Tax
Service Tax
17.8.3 ST 3 Report
Go to Gateway of Tally > Display > Statutory Reports > Service Tax Reports > ST3 Report
1. In the Service Tax Reports menu, select ST3 Report.
2. In Period For field, select the period for which ST3 Report to be printed.
3. Specify the Place and Date for Printing ST3 Report.
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Service Tax
48
Service Tax
49
Service Tax
50
Service Tax
51
Service Tax
52
Service Tax
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Service Tax
Create a Service Tax payment voucher debiting Output Service Tax and
crediting the Input ST Telephone Chrg and HSBC for the balance Service
Tax payable, if any.
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.
Name of the
Ledger
Group
under
Maintain
balance
bill-bybill
Is Service
Tax
Applicable
Inventory
Values are
affected
Type
of
Duty/
Tax
Category
Manoj Videos
Sundry
Creditors
Yes
Yes
No
N.A.
N.A.
Purchase
A/c
No
Yes
No
N.A.
Photography
Advertisement Contract
Sales A/c
No
Yes
No
N.A.
Advertising
Agency
Sundry
Debtors
Yes
Yes
No
N.A.
N.A.
Create the following ledgers for Service Tax and enter them as given in the table below:
Name of the Ledger
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Under
Type of
Duty/Tax
Category
Inventory values
are affected
Output ST - Advertisement
Duties &
Taxes
Service Tax
Advertising
Agency
No
Duties &
Taxes
Service Tax
Photography
No
Service Tax
Given below, are transactions from 3-05-09. Create ProC Advertising Agency and pass the
following transactions :
SNo
Date
Particulars
1.
3-5-09
Sales Bill raised on Nexus Solutions Pvt. Ltd., after completing their
advertisement order no. DL-010 for Rs. 30000 + Service Tax @ 10% +
Cess @ 2% + Sec Cess @ 1%.
2.
7-5-09
Payment received from Nexus Solutions Pvt. Ltd., for Rs. 33,090 vide
Ch.No. 7564121.
3.
12-5-09
Received the bill towards photography charges from Manoj Video Ref.
No. SV-09 for Rs. 15000 [Service Tax @ 10% + Cess @ 2% + Sec Cess
@ 1%].
4.
15-5-09
Payment made through Canara Bank to Sonia Video for their bill no.
SVB-09 for Rs. 16,545 vide Ch.No. 6665261.
5.
19-5-09
Sales bill raised for Outdoor Advertisement charges for Rs. 6000 + Service Tax + Cess to Nexus Solutions Pvt. Ltd.
6.
20-5-09
Manoj Video sent their Video recording charges Bill [SV-012] for Rs.
8979.20 [Video Charges Rs. 8000, Service Tax @ 10% + Cess @ 2% +
Sec Cess @ 1%].
7.
21-5-09
Payment made to Manoj Video for their bill no. SV-012 for Rs. 4000 vide
Ch.No. 675510
8.
25-5-09
Received Rs. 5000, from Nexus Solutions Pvt. Ltd., towards outdoor
advertisement bill.
9.
28-5-09
10.
30-5-09
Sales Bill raised on Nexus Solutions Pvt. Ltd., after completing their
advertisement works towards order no. DL-028. for Rs. 40000 + Service
Tax @ 10% + Cess @ 2% + Sec Cess @ 1%.
11.
31-5-09
Make a payment to Canara Bank towards Service Tax Payable for the
month of May09.
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Service Tax
Points to Remember
Service Tax is an indirect tax levied on certain categories of services
provided by a person, firm, agency etc
Avail of the input credit on Service Tax paid on purchases by deducting
the Service Tax payable.
Service Tax is calculated on the assessable value but is payable on the
value realised on the invoice.
Tally.ERP 9 calculates the Service Tax payable and the Input Credit on
each bill by tracking it bill-wise.
The Statutory Masters in Tally.ERP 9 maintain a category-wise information on Service Tax.
Tally.ERP 9 gives you the option to bill for services as an item.
Account for Service Tax on the receipt of advance and make adjustments when an invoice is raised.
Transfer the Service Tax balance payable and input credit from previous
year to current year. The Service Tax Payable report displays the net
Service Tax payable, after availing the input credit.
Print the Form GAR-7 Challan from Tally.ERP 9 to pay your Service Tax.
Print and File Statutory Reports from Tally.ERP 9, for the half-yearly filing of returns with details in Form ST3 and the Input Credit Form.
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