Creation of Service Income/Expense Ledger Account

After the Service Tax Registration Particulars you have to create Service Income/Expense Ledger Account. Service Income Ledger is to be created under sales account group or under direct income group. Enter the following details while ledger creation :

Is Service Tax Applicable : Set 'yes' for service incomes, if taxable under Service tax.

Inventory values are affected : Set 'yes' for this option if you want service tax to be computed automatically.