Service Tax as Input Credit

sachinsanghavi

Hi,

The issue is for calculating the Service Tax on bank charges which is required as an Input Credit. This is in reference to the Indian Localization.
The whole issue is explained as below:

While making a payment to Vendor in US$, additional bank charges is applicable and Bank also charges Service Tax on that bank charge.
For Eg.

Vendor A/c --> Debit --> US$ 1000 @ 40.80 --> INR 40800
Bank Charges --> Debit --> INR 1000
Service Tax on Bank Charges i.e. 12.36% on 1000 (Debit) --> INR 123.60
Bank A/c --> Credit --> INR 41923.6

Can any one let me know how this transaction can be booked?

Regards,
Sachin.

sachinsanghavi

[-o< Do any one in the world of mibuso know it's reply? ](*,)

raj2000be

Such Kind of Charges by the bank would have to be entered during the bank reconciliation process. Not during the transaction itself.

But if you still want to do it during the transaction itself you can use a JV for this.

Rajesh

ssingla

The bank which is charging service tax needs to be defined as vendor, with its service tax registeration number etc. Then pass the entries between the bank (vendor) and actual bank.

This kind of transaction is required as vendor details is required in the excise/service tax records.

muksha

yes, you should do thease type of entries through purchase invoice after defining the bank as a vendor. This will give you the benefit in claiming service tax as excise input with the service tax registration no. This will help you out in service tax reports too.

sachinsanghavi

Thanks Every one.