Sales Voucher Entry when Service tax is Applicable

The tax details is computed automatically if during creation of service income/expense ledger, the option 'Inventory values are affected' is set to 'yes'. To make sales voucher entry, in case service tax details is already computed, enter details in voucher mode. If not computed then enter the Sales Voucher Invoice mode.

Sales Voucher Entry in Voucher mode

First enter the party account, write the amount in the bill allocation screen and select the service tax ledger. Party Account is entered with amount and bill details, in debit column. Enter the service income account and the service tax details in the credit side through the Service Tax Ledger.

Sales Voucher Entry in Invoice mode

In case the Tax computation is not done, sales voucher entry is made in invoice mode. Party Account is to be selected first and then in sales ledger field select the service income account. Select the service account and enter the total amount in the table area. Select Tax Ledger and enter tax rate and cess rate. Service tax is posted against bill reference number.

Service Tax Computation

Select service tax ledger account, from there you can go to the screen for service tax details. The total computation , consisting of Abatement, Cess , Service Tax is shown here.

Creation of Service Expenses Ledger Account

Create this ledger account for the expenses, which are incurred for the purpose of service income.
These expenses are deducted to calculate the net value of Service Tax payable in the Service Tax details screen.

Service Tax Ledger Creation

Then you also have to create Service Tax Ledger for recording Service Tax related transactions. The Service Ledger is to be created under the group Duties and Taxes. In the ledger creation /alteration screen, the following information are to entered :

Type of Duty/Tax : Enter Service Tax from the list given.

Category name : Enter the service category of the company from the list provided by the software.