Meaning of Service Tax Expense Account

sourav1985

I am using Dynamics NAV 4.0. SP3 I would be glad if somebody could tell me the utility of Service Tax Expense Account in Service Tax Setup.
Thanks in advance

ssingla

In case service tax amount paid on purchase of services is not recoverable, they it can be debited to Expense account. This is used in the case of GTA- Outward.

Navrookie

Hi expert,

a) When I post the purchase invoice, the service tax amount goes to service tax recivable interim account instead of st receivable account, similarly in sales its getting posted to ST payable Interim account. My doubt is, Is this correct? if correct then what is the use of ST receivable and Payable account, when the entry goes to that particular account.

b) How the non recoverable ST amount gets debited to expense account , is there any batch process or do we have to post through voucher

Thanks in Advance

ssingla

Navrookie wrote:

a) When I post the purchase invoice, the service tax amount goes to service tax recivable interim account instead of st receivable account, similarly in sales its getting posted to ST payable Interim account. My doubt is, Is this correct? if correct then what is the use of ST receivable and Payable account, when the entry goes to that particular account.

You need to understand the basic nature of service tax transactions. Invoice booking (sale/purchase) does not create any liability to pay or recoverable to adjust with liability. The payable/recoverable becomes when the invoice is paid.

Navrookie

Hi singla ,

I understand, that the Invoice booking (sale/purchase) does not create any liability to pay or recoverable to adjust with liability, but in that case why when excise is calculated the interim account is not available..

ssingla

excise is payable on issue of invoice while service tax is payable on receipt on invoice