Service tax

[Former Member]

Dear Consultants,

Kindly explain me about Service tax and how it is calculated manually using an example

Regards

Srinivasa Rao

[Former Member]

Hi

Service tax is a tax we need to pay on procurement of some specified services like that of a CA or architect etc.

Same way we collect it on providing the specified services to our customers.

e.g we provide some services to our customer for Rs 100 and the service tax with ecess is 12.36 % then the entry wud be :

Customer Dr 112.36

To revenue 100

To service tax 12.36

and vice versa in case of vendors .

[Former Member]

hi,

Follow the below process for Service Cycle;

1. AC01 - Create Service master in AC01 and assign the Valuation Class for the Service Masters and do Account Determination in OBYC for A/c Key GBB and Valuation Modifier VBR (to this Assign the Service Expense A/c) and for A/c Key WRX, assign GR/IR Clearing A/c

2. ME21N - In PO (ME21N), use Item category as "D" (Services) along with Account Assignment Category "K" (Cost Center) and In "Services" tab, specify the Service Master and pricing details

3. ML81N - Create Service Entry Sheet w.r.t. Service PO

Service Expense A/c - Dr

GR/IR Clearing A/c - Cr

4. MIRO - LIV for Service Entry Sheet or Service PO

Service Vendor A/c - Cr

GR/IR Clearing A/c - Dr

Service Tax A/c - Dr

Ed Cess on Service tax - Dr

Sec Ed Cess on Service tax - Dr

Note: - Service tax Accounts will come in picture if you have use Service Tax Code in Service PO

Refer following links;

External Service Management

And Go to Transaction OLMSRV to configure External Service Management.