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Lesson17:ServiceTaxtallypdf

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Lesson17:ServiceTax

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Lesson01:BasicsofAccunting
Lesson02:Fundamentalsof
Tally.ERP9
Lesson02.1Introduction
Lesson02.2GettingFunctional
withTally.ERP9
Lesson02.3Creation/Settingup
ofCompanyinTally.ERP9
Lesson03:CreatingAccounting
MastersinTally.ERP9
Lesson03.1.F11:Features
Lesson03.2.F12:
Configurations
Lesson03.3SettingupAccount
Heads
Lesson04:CreatingInventory
MastersinTally.ERP9
Lesson04.1StockGroups
Lesson04.2StockCategories
Lesson04.3Godowns/Locations
Lesson04.4UnitsofMeasure
Lesson04.5StockItems
Lesson04.6"PracticalExcercise"
ofInventoryMastersforNational
Traders
Lesson05:VoucherEntryin
Tally.ERP9

Lesson:17.ServiceTaxOfTally.ERP9
17.1BasicsofServiceTax
17.2ConfiguringTally.ERP9forServiceTax
17.2.1 SalientFeaturesofServiceTaxcompliantTally.ERP9
17.2.2 CompanySetup
17.2.3EnablingServiceTax
17.2.4 ServiceTaxStatutoryMasters
17.3CreatingMasters
PracticeExercise
17.4EnteringTransactions
17.4.1CreatingPurchaseInvoice
17.4.2CreatingSalesInvoice
17.5AccountingforAdvanceReceipts
17.6AccountingforOpeningServiceTaxCredit
17.7PaymentofServiceTax
17.8ServiceTaxReports

Lesson06:Advanced
AccountinginTally.ERP9

17.8.1ServiceTaxPayables

Lesson07:AdvancedInventory
inTally.ERP9

17.8.2InputCreditForm

Lesson08:ValueAddedTax
(VAT)

17.8.3ST3Report

Lesson09:CentralSalesTax
(CST)

PracticeExercise
LessonObjectives

Lesson10:PointofSale(PoS)

Oncompletionofthislesson,youwillbeableto

EnableServiceTaxinTally.ERP9

CreatethemastersneccesaryforServiceTaxtransactions

RecordServiceTaxtransactions

GenerateServiceTaxreportsandchallansinTally.ERP9

Lesson11:JobCosting
Lesson12:Multilingual
Capabilities
Lesson13:Technological
AdvantagesofTally.ERP9

ServiceTaxisataxonservicesrendered.Theperson,onewhorenderstheservice,isliabletopayservice
1994anditsscopeisincreasingeveryyear.

Lesson14:Tally.NETand
RemoteCapabilities
Lesson15:Application
ManagementandControls
Lesson16:OnlineHelpand
Support
Lesson17:ServiceTax
Lesson18:TaxDeductedat
Source[TDS]
Lesson19:TaxCollectedat
Source[TCS]
LESSON20:ExciseforDealers
TALLYPDF,FormsandDocs

Lesson:17.1.BasicsofServiceTaxOfTally.ERP9

LetusunderstandthefollowingdefinitionsandterminologiesusedinServiceTax:
Featuresofservicetax

Servicetaxis payableongrossamountchargedforserviceprovidedortobeprovided,
payableonreimbursementof expenseswhichformpartofservice.However, payments
agent'ofservicereceiveriskeptoutsidethepurviewofServiceTax.

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Lesson17:ServiceTaxtallypdf

Incases,wherethevalueofServiceprovidedisnotascertainablethevaluationisdoneo
basisofcost.

tallyshortcutkeys

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HACKS

Grossamountchargedisconsideredasinclusiveofservicetaxandthentaxisbackcalcu

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Servicetax is payable only when bill amount is received from service receiver. Howe
associatedenterprises,servicetaxispayableonbookingsuchentry

HERE

TaxableService

Service tax is payable on 'taxable service'. The definition of taxable service is different fo
caseofadvertisingagency,anyserviceprovidedtoaclient,byanadvertisingagencyinrelatio
willbe'taxableservice'.
ValueofTaxableService

Servicetaxispayableon'valueofservices'.ValueofServiceshallbethegrossamountcharged
servicerenderedbyhim.
ServiceProvider
Asdefinedu/s65(105)aserviceproviderisonewhoprovidestaxableservice.
Personliabletopayservicetax
Everypersonprovidingtaxable servicetoanypersonhastopayservicetaxattheprescribed
servicereceiver,underreversechargemethod.

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TALLYPDF,FormsandDocs

Exemptionfromservicetax

Home

Smallserviceproviderswhosetotalvalueofservicesprovided(includingexemptandnon
10lakhsinpreviousyeararenotrequiredtopayservicetaxincurrentfinancialyeartillthey

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TALLYERP9FULL

ServicesprovidedtoSEZunitsordeveloperforconsumptionwithinSEZareexempt.

TUTORIALONLINE

Refundiseligibleforspecifiedservicesutilisedforexport.

ServicesprovidedbyRBIareexemptbutserviceprovidedtoRBIarenotexempt.

RateofServiceTax

AccordingtoSection66ofFinanceAct,1994thereshallbeleviedataxattherateof10%ofva
section65(105)ofFinanceAct,1994.Inaddition, educationcess@2%andSecondaryHigher
Thus,totalservicetaxis10.3%.
LetusconsiderthefollowingexampletounderstandhowServiceTaxiscalculated:

Particulars
Chargeonservice(i.e.Billamount)
ServiceTax@10%
CessonServiceTax@2%
SecCessonServiceTax@1%
Totalinvoiceamount

a.
b.
c.
d.

Rs.
10,000
1,000
20
10
11,030

Assumingthe buyerpays the seller onlyRs.5,000 the ServiceTaxpayableiscalculated

a.
b.
c.
d.

Particulars
Chargepaidonservice(10,000x
5,000)/11,030
ServiceTaxonRs.5000/is(1,000x
5,000)/11,030
CessonServiceTaxis(20x5,000)/11,030
SecCessonServiceTaxis(10x
5,000)/11,030
TotalPayment
Received

Rs.
4,533
453
9
5
5,000.00

Abatements

Abatementreferstothepercentageoftaxexemptionprovidedbythegovernmentonthevalue
ServiceTax.Itiseitherapercentageoftheservicechargesoralumpsumamount.

a.
b.
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Particulars
ChargeonService
Anabatementof30%amountsto:

Rs.
10,000
3,000
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c.

Here,theassessablevalueis(ab)
Therefore,ServiceTax@10%onRs.7,000,Cess
@
2%andSecCess@1%onServiceTax

7,000

CenvatCredit

ServiceprovidercanavailCenvatcreditofservicetaxpaidoninputservicesandexcisedutypai
credit can be utilised for payment of service tax on output services. However, in cases whe
taxable and exempt services and if input services are common, Cenvat credit can either be ta
'amount'isrequiredtobepaidonexemptedservices.
PaymentofServiceTax

when the assessee is a corporate, service tax is payable on a monthly basis

month. For example, service taxhas to bepaidbyJanuary5,forthemonthofDecember.

Noncorporatebodiessuchasindividuals,proprietaryfirmsandpartnershipfirmspayservicetax
istobemadebythe5thdayofthemonth,followingthequarter.Forexample,servicetaxforth
paidbyJuly5th.ForthemonthofMarchthough,corporateandnoncorporatebodies,havetopa

TheservicetaxassesseemustuseaGAR7Challantopaytaxinthebanknominatedbythecommissioner
tothenearestrupee.ItisadvisabletouseseparateGAR7Challansfordifferentcategoriesofservice.

ServiceTaxOfTally.ERP9
17.2.1SalientFeaturesofServiceTaxcompliantTally.ERP9
17.2.2CompanySetup
17.2.3EnablingServiceTax
17.2.4ServiceTaxStatutoryMasters
ItisaonetimeconfigurationforServiceTaxfeaturestobeenabledinTally.ERP9.
17.2.1 SalientFeaturesofServiceTaxcompliantTally.ERP9
Tally.ERP9tracksthedetailsbillwiseandautomaticallycalculatestheServiceTax
billwhileofferingtheflexibilitytomakeadjustmentslater.

It has a builtinassessable valuefeatureon which ServiceTaxiscalculated. It

forabatementandexpenses.

It maintains information on Service Tax categorywisewhichismandatoryfor filing

ServiceTaxreturns.
Italsomakesaprovisionforexemptionnotificationdetails.

Eliminateserrorproneinformation,incorrectremittances.

Itgeneratesreports inthegovernment suggestedformatslikeGAR7Challans,ST3

Report,ManagementInformationServices(MIS)reportsandServiceTaxPayable
calledFirstCServicestounderstandtheServiceTaxfeatureofTally.ERP9.
17.2.2CompanySetup
Createacompany
GotoGatewayofTally>Alt+F3:CompanyInfo.>CreateCompany
IntheCompanyCreationscreen,
SpecifyFirstCServicesastheCompanyNameandAddressdetails

SelectIndiaintheStatutoryComplianceforfield

SpecifytheState,Pincode&AccountswithInventorydetails

SpecifyFinancialYearFrom&Booksbeginningfromdateas142009

ThecompletedCompanyCreationscreenisdisplayedasshownbelow:

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Figure17.1CompanyCreationscreen
17.2.3 EnablingServiceTax
IntheF11:Features(Statutory&TaxationFeatures),
SetEnableServiceTaxtoYes.

EnableSet/AlterServiceTaxDetailstoYes.

TheCompanyOperationsAlterationscreenappearsasshownbelow:

Figure17.2CompanyOperationsAlterations

PressEntertoview theCompanyServiceTaxDetailsscreenandenterthedetailsasshownbelow:

Figure17.3CompanyServiceTaxDetails
ThefieldsthatappearsintheCompanyServiceTaxDetailsscreenarebriefedbelow:
1. ServiceTaxRegistrationNo.:EntertheregistrationnumberallottedtoyoubytheService
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2. DateofRegistration:EnterthedateofregistrationofServiceTaxforyourservice.
3.AssesseeCode:EnterthecodegiventoyourcompanybytheServiceTaxDepartment.
4.PremisesCodeNo.EnterthePremisescode/Locationcode.Itistheidentification
taxpayers.
5.TypeofOrganisation:SelectthetypeofyourorganisationfromtheListofOrganisationsmenu

Figure17.4ListofOrganisations

6. IsLargeTaxPayerThisfieldissettoYes/Nobaseontheamountoftaxpaidbytheas

LargeTaxpayersarethoseassesseswhopaylargeamountofTax.Theyaretheeligibletaxpayerforthepurposes
e.g.:Rs.5,00,00,000.

7.LargeTaxpayerUnit:Enterthenameoftheunitwherethelargetaxpayerspaytax.
8.Division:Enterthecodeandnameofthedivisionyourcompanyfallsunder.
9.Range:Enterthecodeandnameoftherangeyourcompanyfallsunder.
10.Commissionerate:EnterthecodeandnameoftheCommissionerateofServiceT
addressofyourCompanysregisteredofficeislocated.
17.2.4 ServiceTaxStatutoryMasters

Beforecreatingmasters,thefollowingStatutoryMasterisloadedintoTally.ERP9.Toviewth
Go to Gateway ofTally>Display >StatutoryInfo. >ServiceCategories>AdvertisingAgency

Figure17.5ServiceCategory
TheServiceCategoryscreenhas a Namefield showingthecategory,followedbythe

CountryCode,AccountingCode,CategoryCodeandSubClauseNo.fields.
TheApplicableFromcolumndisplaysthedatefromwhichtheAbatement(%),Service

TaxRate(%),CessRate(%)andSecondaryCessRate(%)areapplicable.

Eachservicecategory hasapredefined masterinTally.ERP9whichcanalsobeupdatedforstatutorychan

website(www.Tallysolutions.com).YoucanviewthevaluesforeachofthesecategoriesinTally.ERP9.

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Tally.ERP9

LetuscreatethefollowingledgermastersrelatedtoServiceTax :
SundryCreditors

SundryDebtors

DutiesandTaxes

SalesAccounts

PurchaseAccounts

i.CreateSundryCreditorLedger
GotoGatewayofTally>AccountsInfo.>Ledgers>Create
1. EntertheNameasKrazyCoolAgencies.
2.SelectSundryCreditorsfromtheListofgroupsintheUnderfield.
3.SetMaintainbalancesbillbybilltoYes.
4.DefaultCreditPeriod:Leavethefieldblank
5.TheInventoryValuesareaffected?fieldissetbydefaulttoNo
6.SetIsServiceTaxApplicabletoYes.
7.IntheExemptionDetailscreenenterthedetailsasshownbelow:

Figure17.6ServiceTaxExemptionDetailsScreen
8. UnderMailingDetailsentertheAddress,StateandPINCodedetails
9.UnderTaxInformationenterthePAN/ITNo.
10.EnablethefieldSet/AlterServiceTaxDetailstoYes

Figure17.7LedgerCreation
11.InServiceTaxDetailsscreenentertheServiceTaxRegistrationdetails
IntheServiceTaxNo.fieldentertheservicetaxregistrationnumberoftheparty

IntheServiceTaxReg.Datefieldentertheservicetaxregistrationdate

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Figure17.8ServiceTaxDetails
12.AccepttheServiceTaxDetailsscreen
ThecompletedLedgerCreationscreenappearsasshownbelow:

Figure17.9LedgerCreationKrazyCoolAgencies
13.PressYorEntertoacceptthescreen.
ii.CreateSundryDebtorLedger
GotoGatewayofTally>AccountsInfo.>Ledgers>Create
1. EntertheNameasComputechSystems.
2.SelectSundryDebtorsfromtheListofgroups.
3.SetMaintainbalancesbillbybilltoYes.
4.TheInventoryValuesareaffectedfieldissetbydefaulttoNo.
5.SetIsServiceTaxApplicabletoYes.
6.IntheExemptionDetailscreen,enterthedetailsasshownbelow:

Figure17.10ServiceTaxExemptionDetailsScreen
7. UnderMailingDetailsentertheAddress,StateandPINCodedetails
8. UnderTaxInformationenterthePAN/ITNo.
9.EnablethefieldSet/AlterServiceTaxDetailstoYes
10.InServiceTaxDetailsscreenentertheServiceTaxRegistrationdetails

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Figure17.11ServiceTaxDetails
11.AccepttheServiceTaxDetailsscreen
ThecompletedLedgerCreationscreenappearsasshownbelow:

Figure17.12LedgerCreationComputechSystems
12.PressYorEntertoaccepttheledgercreationscreen.
Similarly,createaledgerforGlobalBusinessHouseundertheSundryDebtorsgroup.
AServiceTaxLedgerisusedtopredefinetherateofServiceTaxandtherateofCessoneachtransaction.
thesevaluesordirectlyselectthemduringvoucherentry.

iii.CreateServiceTaxLedger
GotoGatewayofTally>AccountsInfo.>Ledgers>Create
1. EntertheNameasInputServiceTax.
2.SelectDuties&TaxesfromtheListofgroupsintheUnderfield.
3.IntheTypeofDuty/TaxfieldselectServiceTaxfromtheTypeofDuty/Taxlist

4.IntheCategoryName,selectAdvertisingAgencyfromtheListofServiceTaxCategories
5.SetInventoryvaluesareaffectedtoNo.
ThecompletedLedgerCreationscreenappearsasshownbelow:

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Figure17.13LedgerCreationINPUTServiceTax
6. PressYorEntertoacceptthescreen.

PracticeExercise
Createthefollowingledgers.

Ledger
OutputServiceTax
InputSTTELEPHONE
CHRG
HSBC

Under

Typeof
Category

Duty/Tax
Name
Duties&Taxes ServiceTax Advertising
Agency
Duties&Taxes ServiceTax Telephone
Service
BankAccounts

Opening
Balance
Nil
Nil
5,00,000

iv.CreateSalesLedgerforServices
GotoGatewayofTally>AccountsInfo.>Ledgers>Create.
1.EntertheNameasConsultancyServices.
2.SelectSalesAccountsfomtheListofGroupsmenuintheUnderfield.

3. SetInventoryvaluesareaffectedtoNo.
4.SetIsServiceTaxApplicabletoYes.
5.IntheCategoryName,selectAdvertisingAgencyfromthelist.
6.SetIsAbatementApplicabletoNo.
ThecompletedLedgerCreationscreenappearsasshownbelow:

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Figure17.14LedgerCreationConsultancyServices
7. PressYorEntertoacceptthescreen.
v.CreatePurchaseLedgerforServices
GotoGatewayofTally>AccountsInfo.>Ledgers>Create
1.EntertheNameasProfessionalServices.
2.SelectPurchasesAccountsfromtheListofGroups.
3.SetInventoryValuesareaffectedtoYesifserviceispurchasedasanitem.
4.SetIsServiceTaxApplicabletoYes.
5.IntheCategoryName,selectAdvertisingAgencyfromthelist.
6.SetIsAbatementApplicabletoNo.
ThecompletedLedgerCreationscreenappearsasshownbelow:

Figure17.15LedgerCreationProfessionalServices
7. PressYorEntertoacceptthescreen.

IfthefieldIsAbatementApplicableissettoYesintheIncome/ExpensesorSales/Purchaseledgermasters,the
whichNotificationNo.andPercentagecanbeentered,whichiscapturedintheinvoiceandcanbealtered.

ServiceTaxOfTally.ERP9
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17.4.1CreatingPurchaseInvoice
17.4.2CreatingSalesInvoice
Tally.ERP
9
allows
the
user
to
ServiceTaxtransactionsin AccountingInvoice Mode orVoucherMode.Entertheinvoice
This allows the ServiceTax amount to be displayed automatically in the
ServiceTaxledger.Tally.ERP9alsosupportspurchaseorsaleofaservice,asanitem.
17.4.1 CreatingPurchaseInvoice
On 15409, FirstC Services received Professional Services from KrazyCool Agencies
fortheserviceswasmadeon1642009.
Step1:CreatePurchaseInvoice
GotoGatewayofTally>AccountingVouchers>F9:Purchase
1. PressF2andchangethedateto1542009.
1.EntertheSupplierInvoiceNo.andDateasdesired.
2.IntheParty'sA/cName,selectKrazyCoolAgenciesfromtheListofLedgerAccounts.
3.SelecttheNameofLedgerasProfessionalServicesfromtheListofLedgerAccounts.
4.EntertheamountRs.175000.
5.SelecttheInputServiceTaxledgerfromtheListofLedgerAccounts.
TheServiceTaxDetailssubformappearsasshownbelow:

Figure17.16ServiceTaxDetailsscreen
Tally.ERP9allowsyoutomakethenecessarychangesintheServiceTaxDetailsscreen.

6. InTheBillwiseDetailsscreen,selectNewRefandtypetheNameasKC1.
SelectINPUTServiceTax fromtheListofServiceTaxLedgers

TheCompletedBillwiseDetailsappearsasshownbelow

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Figure17.17BillwiseDetailsfor:KrazyCoolAgencies
TheCompletedPurchaseInvoiceappearsasshownbelow:

Figure17.18PurchaseInvoice
7. PressYorEntertoacceptthescreen.
Step2:CreatePaymentVoucher
GotoGatewayofTally>AccountingVouchers>F5:Payment
In theF12:Configuration, set UseSingle Entrymode forPymt/Rcpt/ContratoYes.

1.PressF2andchangethedateto1642009.
2.IntheAccountfield,selectHSBCfromtheListofLedgerAccounts.
3.IntheParticularsfieldselectKrazyCoolAgenciesfromtheListofLedgerAccounts.
4.EnterRs.1,93,025intheAmountfield.
5.IntheBillwiseDetailsscreen,selectAgstRef.
TheBillwisedetailsscreenappearsasshownbelow:

Figure17.19BillwiseDetailsforKrazyCoolAgencies
SelectKC1fromtheListofPendingBillsandaccepttheBillwiseDetailsscreen.

6. EnterNarration,ifany.
ThecompletedPaymentVoucherappearsasshownbelow:

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Figure17.20PaymentVoucher
7. PressYorEntertoacceptthePaymentvoucher
17.4.2 CreatingSalesInvoice
On 2042009,ConsultancyServicesworthRs.7,00,000wasprovidedtoComputech
receivedon2542009.
Step1:CreateSalesInvoice
GotoGatewayofTally>AccountingVouchers>F8:Sales
1.PressF2andchangethedateto2042009.
2.IntheParty'sA/cName,selectComputechSystemsfromtheListofLedgerAccounts.
3.PressEntertoviewtheDespatchDetailsandacceptthedefaultdetails.
4.SelectConsultancyServicesfromtheListofLedgerAccounts.
5.EntertheamountasRs.700000.
6.SelectOutputServiceTaxfromtheListofLedgerAccounts.
TheresultantServiceTaxDetailsappearsasshownbelow:

Figure17.21ServiceTaxDetailsscreen
7. TheBillwiseDetailsscreen,selectNewReffromtheMethodofAdj.

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Figure17.22BillwiseDetailsforComputechSystems
8.EntertheNameas1andselecttheServiceTaxledgerasOutputServiceTax.
ThecompletedSalesInvoiceappearsasshownbelow:

Figure17.23SalesInvoice
9.PressYorEntertoaccepttheSalesInvoice.
Step2:CreateReceiptVoucher
GotoGatewayofTally>AccountingVouchers>F6:Receipt
In theF12:Configuration, setUse SingleEntry modeforPymt/Rcpt/ContratoNo.

1. PressF2andchangethedateto2542009.
2.SelectComputechSystemsintheCreditfieldandentertheamountasRs.772100.
3.IntheBillwiseDetailsscreen,selectAgstReffromMethodofAdj.
TheBillwiseDetailsscreenappearsasshownbelow:

Figure17.24BillwiseDetailsforComputechSystems
4. SelecttheSalesVoucherfromtheListofPendingBillstodefaultServiceTaxLedger
5.AccepttheBillwiseDetailsscreen.

6.InDebitfieldselectHSBCBankfromtheListofLedgerAccounts,Amountisdefaultedauto
7.InNarrationfieldentertheChequeNumber.
ThecompletedReceiptVoucherisdisplayedasshown:

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Figure17.25ReceiptVoucher
8. PressYorEntertoaccepttheReceiptVoucher.

Tally.ERP 9calculates the Service Tax liability basedontheamountreceivedagainstservicedrenderedi.e.,SalesI

Step3:DisplayServiceTaxPayablesReport
GotoGatewayofTally>Display>StatutoryReports>ServiceTaxReports>ServiceTax
TheServiceTax Payablesreportdisplaysthependingservicetaxpayablesforthe selectedperiod.

Figure17.26ServiceTaxPayable
TheServiceTaxpayablereportdisplaysRs.72,100astheServiceTaxdue

Tally.ERP9

As mentioned earlier, Service tax is not applicable on the receipt

theinvoiceisraised.Servicetaxistobepaidontheamountreceivedontheinvoicevalue

On27409,FirstCServicesreceivesanadvanceofRs.70,000foraservicerenderedby
ason2942009.

On
2942009,
FirstC
Services,
completed
the
an invoice on GlobalBusiness House towards Advertising Agency
Service Tax, 2%EducationCessand 1% Secondary Education Cessforatotalamou
70,000 was received as an advance. Service tax, Education Cess and SecondaryC
assessablevalueofRs.1,70,000.
Step1:CreateReceiptVoucher
GotoGatewayofTally>AccountingVouchers>F6:Receipt

1. PressF2andchangethedateto2742009.
2.SelectGlobalBusinessHouseintheCreditfieldandentertheamountasRs.70,000
3.IntheBillwiseDetailsscreen,selectAdvancefromtheMethodofAdj.
TheBillWiseDetailsscreenappearsasshownbelow:

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Figure17.27BillwiseDetailsforGlobalBusinessHouse
4. TypetheNameasGBH andselectOutputServiceTaxastheServiceTaxLedger.

5.InDebitfieldselectHSBCBankfromtheListofLedgerAccounts,Amountisdefaultedau
6.InNarrationfieldentertheChequeNumber.
ThecompletedReceiptVoucherappearsasshownbelow:

Figure17.28ReceiptVoucher
7. PressYorEntertoaccepttheReceiptVoucher.
Step2:CreateSalesInvoice
GotoGatewayofTally>AccountingVouchers>F8:Sales
1.PressF2andchangethedateto2942009.
2.IntheParty'sA/CNameselectGlobalBusinessHouse.
3.PressEntertoviewtheDespatchdetailsscreenandacceptthedefaultscreen.
4.SelectConsultancyServicesfromtheListofLedgersAccountsandentertheamount
5.SelectOutputServiceTaxledgerfromtheListofLedgersAccounts.
6.The Service Tax Details screenappears, theServiceTax andtheCesspercentageandAmounts

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Figure17.29ServiceTaxDetails
In Service TaxBill Wise Details forsection,the BillWiseDetailsaredefaulted automatically. The BillW
changed to therequiredreferencenumber.

7. IntheBillwiseDetailsscreen,enterthedetailsasshownbelow:

Figure17.30BillwiseDetailsforGlobalBusinessHouse
TheresultantSalesInvoiceappearsasshownbelow:

Figure17.31SalesInvoice
8. PressYorEntertoaccepttheSalesInvoice.
Step3:DisplayServiceTaxPayableReport
ThiswilldisplaytheServiceTaxPayablescreen.ThisreportcontainsthependingService
period.

GotoGatewayofTally>Display>StatutoryReports>ServiceTaxReports>ServiceTax
TheServiceTaxPayablescreenappearsasshownbelow:

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Figure17.32ServiceTaxPayable

ServiceTaxOfTally.ERP9

ThependingServiceTaxpayablesandavailableInput CreditonServiceTaxcanbetransfered
thecurrentfinancialyearinTally.ERP9.

On30409,FirstCServicesdecidedto pay Service Taxtothe government. Information

givenbelow:
InputServiceTaxCreditforRs.1,030 on10,000billvalue

ServiceTaxpayableofRs.2,060on20,000billvalue

Setup:
Createthefollowingledgers:
BSNLunderSundryDebtors.SetIsServiceTaxapplicabletoYes.

ServiceTaxCreditunderDutiesandTaxeswithanopeningbalanceofRs.1030.Select

ServiceTaxPayableunderDuties&TaxeswithanopeningbalanceofRs.2060.

ThecompletedServiceTaxPayableledgercreationscreenappearsasshownbelow:

Figure17.33LedgerCreationServiceTaxPayable
PressYorEntertoaccept

Step1:CreateJournalVoucher
GotoGatewayofTally>AccountingVouchers>F7:Journal.
1. PressF2andchangethedateto142009.
2.SelectInputSTTelephoneChargesintheDebitfieldandentertheamountasRs.1030
TelephoneServices.
3.IntheServiceTaxBillDetailsforInputSTTelephoneCHRG,selectNewRefandtype
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NameasJrnl/11.
4.EntertheamountRs.1,030

Figure17.34ServiceTaxBillDetails
5. IntheServiceTaxOpeningBillDetailsscreen,enterthedetailsasshownbelow:

Figure17.35ServiceTaxOpeningBillDetails
6. PressCtrl+Atoacceptthescreen.
EnterthebillreferencenumberassociatedwiththeTaxLedgerintheBillNamefield.SelectNotApplicable

7.SelectServiceTaxCreditintheCreditfield.
ThecompletedJournalVoucherappearsasshownbelow:

Figure17.36JournalVoucher
8. PressYorEntertoaccepttheJournalvoucher
Step2:CreateJournalVoucher
Passa journal voucherfortransferringthepreviousyearsbalanceoftheAdvertisingAgency
ledger
GotoGatewayofTally>AccountingVouchers>F7:Journal.
ThecompletedJournalvoucherappearsasshownbelow:

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Figure17.37JournalVoucher

PressYorEntertoaccepttheJournalVoucher.

Lesson:17.7.PaymentofServiceTaxUnderServiceTaxOfTally

On 0552009, FirstC Services, paid Service Tax of Rs. 5506.72 towards Advertising
no.551899 afteradjustingInputServiceTax CreditonTelephoneServices.

PaymentofServiceTaxisdonethroughanormalpaymentvoucher.

Youcanmakeapaymentforasinglecategoryinonepaymentvoucher.

Step1:CreatePaymentVoucher
GotoGatewayofTally>AccountingVouchers>F5:Payment
1.PressF2andchangethedateto0552009.
2.SelecttheOutputServiceTaxLedger,tobedebited,fromtheListofLedgerAccounts.
TheTaxBillDetailsscreenappearsasshownbelow:

Figure17.38ServiceTaxBillDetailsforOutputServiceTax
3. IntheServiceTaxBillDetailsscreen,selectallthebillsintheListofServiceTaxBills.
4.SelecttheINPUTServiceTaxinthecreditfield.
TheServiceTaxBillDetailsforINPUTServiceTaxappearsasshownbelow:

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Figure17.39ServiceTaxBillDetailsforInputServiceTax
5. SelectHSBCinthecreditfield.
6.SetthefieldProvideDetailstoYes

Figure17.40PaymentDetails
Theperiodforwhichthepaymentismadeisspecifiedintheabovescreen.

7. Specify theService Tax Periodwith ChallanNo.,Date,Bank Name,Cheque/Draft/Pay

8.Enterthechequeno.inNarrationfield.
ThecompletedPaymentVoucherappearsasshownbelow:

Figure17.41PaymentVoucher
9.PressYorEntertoacceptthePaymentvoucher.
Step2:PrintingGAR7challan
GotoGatewayofTally>Display>DayBook.
PressPgUpfromtheabovevoucherentryscreentogothePaymentVoucher

Use Alt + P key orclickonthePrint optionontheAccountingVoucherAlteration

screen.TheVoucherPrintingscreenisdisplayed.

SetthePrintGAR7ChallanoptiontoYes.

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Figure17.42PrintConfigurationScreen
UsethePrintPreviewOption(ALT+I)toviewtheprintpreviewofthechallan.

TheprintedGAR7Challanappearsasshownbelow:

Figure17.43GAR7Challan

Lesson:17.8.ServiceTaxReportsUnderServiceTaxOfTally
17.8.1ServiceTaxPayables
17.8.2InputCreditForm
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17.8.3ST3Report

ServiceTaxreportsarethereportswhichisusedtoviewalltheServiceTaxrelateddetailsaton
inthemenuare:
ServiceTaxPayables

InputCreditForm

ST3Report

GotoGatewayofTally>Display>StatutoryReports

Figure17.44ServiceTaxReports
17.8.1 ServiceTaxPayables
ServiceTaxPayablereportdisplaystheTotalServiceTaxPayablesasonaspecifieddate.

GotoGatewayofTally>Display>StatutoryReports>ServiceTaxReports>ServiceTa
SelecttheperiodforthereportusingtheF2:Periodoption.

Settheperiodfrom142009to3042009.

TheServiceTaxpayablefortheselectedperioddisplaysvariousdetailsasshownbelow:

Figure17.45ServiceTaxPayable
UsetheAlt+PkeyorclickonPrintoptiontoprintthereport.

The fields which appearsin the ServiceTaxPayablereportarebriefedbelow:

DateThedateofthesalesinvoiceisdisplayed.

Ref.No.:Thereferencenumbergiventothesalesinvoice.

PartysName:Thenameofthecustomertowhomthesaleismade.

CategoryName: Thename of thecategory ofservice selected fromthelistofservicecategories.

BillValue:Thetotalinvoiceamount.

A ssessableValue:Theassessablevaluefortheservice.

ServiceTax:The totalServiceTaxcalculatedontheassessablevalue.

Cess:ThetotalcessontheServiceTax.

RealizedValue:Amountreceivedontheinvoicevalue.

A ssessable Value: Theassessable valuebasedontherealizedvalue.

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Service Tax Payable: TheamountofServiceTaxpayable basedontherealizedvalue.

CessPayable:ThecessontheServiceTaxpayablebasedontherealizedvalue.

TotalPayable:TheamountofServiceTaxpayableinclusiveofeducationalcess.

17.8.2 InputCreditForm

GotoGatewayofTally>Display>StatutoryReports>ServiceTaxReports>InputCredi
TheInputCreditFormdisplaysvariousdetailsasshownbelow:

Figure17.46InputCreditForm
TheInputCreditFormcontains:

Dateoftransactions

ReferenceNumberofthetransaction

PartysNamewithServiceTaxNo.andAddress

NameoftheServiceCategorypurchased

Bill Valueofthe input serviceincluding Assessable Value,ServiceTaxandCessamount.

Realised

Valueoftheinputservice including AssessableValue,ServiceTaxandCessamount.

TotalCreditavailableoninputservices.

17.8.3 ST3Report

GotoGatewayofTally>Display>StatutoryReports>ServiceTaxReports>ST3Repor
1. IntheServiceTaxReportsmenu,selectST3Report.
2.InPeriodForfield,selecttheperiodforwhichST3Reporttobeprinted.
3.SpecifythePlaceandDateforPrintingST3Report.

Figure17.47PrintConfigurationScreen

PracticeExercise
1. ProC Advertising Agency,earnsitsmajorincome fromadvertisingservice, which
categoryAdvertisementunderServiceTax.
Createthefollowingledgersinthemastersandselect/enterthefieldsasgiveninthetable.

Nameofthe
Ledger

Group
under

Maintainbalancebill
bybill

IsService
Tax
Applicable

ManojVideos

Sundry
Creditors

Yes

Yes

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InventoryValuesare

No
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PurVideo&
Graphic

Purchase
A/c

No

Yes

No

Advertise
ment
Contract
Nexus
Solutions
Ltd.

SalesA/c

No

Yes

No

Sundry
Debtors

Yes

Yes

No

CreatethefollowingledgersforServiceTaxandenterthemasgiveninthetablebelow:

NameoftheLedger

Under

Typeof
Duty/Tax

Category

Inventory
valuesare
affected

OutputSTAdvertisement Duties&Taxes ServiceTax

InputSTVideo&Graphic Duties&
Taxes

Advertising No
Agency
ServiceTax Photography No

Givenbelow,aretransactionsfrom30509.CreateProCAdvertisingAgencyand

SNo
Date
1.
3509
2.

7509

3.

12509

4.

15509

5.

19509

6.

20509

7.

21509

8.

25509

9.

28509

10.

30509

11.

31509

Particulars
Sales Bill raised on Nexus Solutions Pvt. Ltd., after completing
theiradvertisementorder no.DL010forRs.30000+ServiceTax
@10%+Cess@2%+SecCess@1%.
PaymentreceivedfromNexusSolutionsPvt.Ltd.,for Rs.
33,090vide
Ch.No.7564121.
ReceivedthebilltowardsphotographychargesfromManojVideo
Ref.No.SV09forRs.15000[ServiceTax@10%+Cess@2%+
SecCess
@1%].
Paymentmadethrough Canara BanktoSoniaVideo for theirbill
no.SVB09forRs.16,545videCh.No.6665261.
SalesbillraisedforOutdoorAdvertisementchargesforRs.6000+
ServiceTax+CesstoNexusSolutionsPvt.Ltd.
Manoj Video sent theirVideorecordingchargesBill[SV012]for
Rs.
8979.20[VideoChargesRs.8000,ServiceTax@10%+Cess@
2%+SecCess@1%].
PaymentmadetoManojVideofortheirbillno.SV012forRs.4000
vide
Ch.No.675510
ReceivedRs. 5000,fromNexus SolutionsPvt.Ltd.,towards
outdooradvertisementbill.
Advance payments of Rs. 10000 received from Nexus Solutions
Pvt.Ltd., vide Ch.No. 7565551 towards their advertisement work
orderno.DL028.DepositthesameintheCanaraBankA/c.
Sales Bill raised on Nexus Solutions Pvt. Ltd., after completing
theiradvertisementworkstowardsorderno.DL028.forRs.40000
+ServiceTax@10%+Cess@2%+SecCess@1%.
MakeapaymenttoCanaraBanktowardsServiceTaxPayablefor
themonthofMay09.

PointstoRemember

ServiceTaxisanindirecttaxleviedoncertaincategoriesofservicesprovidedbyaperson,firm,agencyetc

AvailoftheinputcreditonServiceTaxpaidonpurchasesbydeductingtheServiceTaxpayable.

ServiceTaxiscalculatedontheassessablevaluebutispayableonthevaluerealisedontheinvoice.

Tally.ERP9calculatestheServiceTaxpayableandtheInputCreditoneachbillbytrackingitbillwise.

TheStatutoryMastersinTally.ERP9maintainacategorywiseinformationonServiceTax.

Tally.ERP9givesyoutheoptiontobillforservicesasanitem.

AccountforServiceTaxonthereceiptofadvanceandmakeadjustmentswhenaninvoiceisraised.

TransfertheServiceTaxbalancepayableandinputcreditfrompreviousyeartocurrentyear.TheServiceTax

Taxpayable,afteravailingtheinputcredit.
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PrinttheFormGAR7ChallanfromTally.ERP9topayyourServiceTax.

PrintandFileStatutoryReportsfromTally.ERP9,forthehalfyearlyfilingofreturnswithdetailsinFormST3andth

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