JK Institute of Finance & Management Accounts – Service Tax – Study Material

Accounting Opening Service Tax Bills (Opening Balance of Service Tax Payables and Input Credit)
To account the opening balance of Service Input credit and service tax at anytime during the Financial Year at your convenience. To
account Opening balance of Input Credit and Service tax, in Journal Voucher a flag - Opening Balance has been provided.

In re-modeled service tax, service tax / input credit opening balances can be brought forward / accounted only for those services which
are already realised in the Previous Financial Year.
Accounting Opening Balance of Service Tax Payables
On May 1, 2010 M/s. Crystal Services (P) Ltd. has service tax payable opening balance of Rs. 5,150 (Service Tax of Rs. 5000, Education
Cess of Rs. 100 and Secondary Education Cess of Rs. 50) on services sold to the Service Receiver Kamal Advertisers.
To account the above transaction follow the steps given below

1. Create Masters
i. Service Tax Ledger of Previous Year
ii. Service Receiver (Customer) ledger
iii. Service Tax Ledger - for Current Year.

2. Create the Voucher Class in Journal Voucher

3. Record the Transaction in Journal Voucher
1. Create Masters
i. Service Tax Ledger - for Current Year.

Ledger Under Type of Duty / Tax Tax Head

Service Tax Ledger Duties & Taxes Service Tax Any

Single Ledger can be used account both input and output service tax or create 2 ledgers to account input and output separately.
If you want to account Service tax, Education Cess and Secondary Education Cess separately create separate ledgers
ii. Service Receiver (Customer) ledger

Ledger Under Is Service Provider / Set / Alter Service Tax

Receiver Details
Kamal Advertisers Sundry Debtors Yes Yes
iii. Service Tax Ledger - of Previous Year
Ledger Under Opening Balance Dr / Cr.
Output Service Tax Suspense A/c 5,150 Cr.
 JK Institute of Finance & Management Accounts – Service Tax – Study Material

2. Create the Voucher Class in Journal Voucher

Ensure Voucher Class is created for Journal Voucher by enabling the option Use Class for Service Tax Adjustments to Yes
3. Record the Transaction in Journal Voucher

1. In Change Voucher Type screen, select Service Credit Adjustment in Class field
2. Press F2 and change the date to 1-5-2010
3. In Used for field select Opening Balance flag from Service Tax Adjustments list

4.In Debit field select Output Service Tax Ledger from the List of Ledger Accounts created for the current year
5.In Amount field enter the Service Tax (Liability) amount. Enter Rs. 5,150
6.In Credit field select Service Tax Ledger created for the current Financial Year and press enter to view Service Tax Details screen
7.In Service Tax Details screen
 In Type of Ref field select New Ref
 In Name field the Reference Number will be defaulted as Jrnl/2-1
 In Type of Service field select Taxable
 In Party Ledger field select Kamal Services from the List of Ledgers
Note :- From Party Ledger field Tally.ERP 9 does not allow to create the ledger.
 In Category field select the service category for which opening balance of service Tax is accounted.
 In Service Amount field enter the service amount on which the credit is available. Enter Rs. 50,000
 Based on the amount specified in Service Amount field Service Tax, Education Cess and Secondary Education Cess will get
calculated and displayed.

Note:- In a single voucher, Tally.ERP 9 allows to account Opening Balance of service tax of Multiple Services provided to multiple parties
This journal will transfer the pending Service Tax of the Previous Financial Year to current Financial Years Service Tax ledger.
The completed Opening balance entry is displayed as shown

On Accounting service Tax Opening balance details will be displayed in Service Tax Payables report To view the details Go to Gateway of
Tally ---> Display ---> Statutory Reports ---> Service Tax Reports ---> Service Tax Payables ---> Bill Date Wise
 JK Institute of Finance & Management Accounts – Service Tax – Study Material

Accounting Opening Balance of Service Input Credit

Illustration:-
On May 1, 2010 M/s. Crystal Services (P) Ltd. has Input Credit opening balance of Rs. 10,300(Service Tax of Rs. 10000, Education Cess of Rs.
200 and Secondary Education Cess of Rs. 100) on services purchased from the Service Provider Matrix Ad.

To account the above transaction follow the steps given below

1.Create Masters

i. Service Provider (supplier) ledger

ii. Service Tax Ledger - of Previous Year.
2.Record the Transaction in Journal Voucher
1. Create Masters
i. Service Provider (supplier) ledger
Ledger Under Is Service Provider / Receiver Set / Alter Service Tax Details
Matrix Ad. Sundry Creditors Yes Yes

Enter the Mailing & Tax Information.

ii. Service Tax Ledger - of Previous Year

Ledger Under Is Service Provider / Receiver Set / Alter Service Tax Details
Input Service Tax Ledger Suspense A/c 10,300 Dr.

2. Record the Transaction in Journal Voucher

1.In Change Voucher Type screen, select Service Credit Adjustment in Class field
2.Press F2 and change the date to 1-5-2010
3.In Used for field select Opening Balance flag from Service Tax Adjustments list
4.In Debit field select Service Tax Ledger from the List of Ledger Accounts created for the current year and press enter to view Service Tax
Details screen
5.In Service Tax Details screen

 In Type of Ref field select New Ref

 In Name field the Reference Number will be defaulted as Jrnl/3-1
 In Type of Service field select Input Credit
 In Party Ledger field select Matrix Ad
Note :- Form Party ledger field, Tally.ERP 9 does not allow to create the ledger.
 In Category field select the service category for which opening balance of Input Credit is accounted.
 In Service Amount field enter the service amount on which the credit is available. Enter Rs. 1,00,000
 Based on the amount specified in Service Amount field Service Tax, Education Cess and Secondary Education Cess will get
calculated and displayed.
 JK Institute of Finance & Management Accounts – Service Tax – Study Material

6.In Credit field select the Input Service Tax Ledger created under Suspense A/c for previous year. Amount of Rs. 10,300 will be defaulted
automatically

This journal will transfer the pending Input Service Credit of the previous Financial Year current Financial Years Service Tax ledger.

On Accounting Input service credit Opening balance details will be displayed in Input Credit Summary report. To view the details Go to Gateway of
Tally ---> Display ---> Statutory Reports ---> Service Tax Reports ---> Input Credit Summary