Service Tax functionality has been enhanced in Tally.ERP 9, to facilitate the recording of transactions and payment of Service Tax according to the amendment of Service Tax rules.
As the rule states - In case of individuals and partnership firms whose aggregate value of taxable services provided from one or more premises is fifty Lakhs rupees or less in the previous financial year, the service provider shall have the option to pay tax on taxable services provided or to be provided by him up to a total of rupees fifty Lakhs in the current financial year, in which payment is received.
Registration types - Limited Liability Partnership, Individual/Proprietary, Partnership, or A Firm will have the option to select Accrual or Realisation, in the Compute Tax Liability field in the Company information in Tally.ERP 9
When sales turnover exceeds 50 Lakhs, Service Tax computation will change to Accrual basis automatically
Overriding Tax Computation basis during entry to Accrual or Realisation manually by assessee
Already recorded transactions will not be affected when the basis of computation is changed from Accrual to Realisation
Exception Reports to identify deviation the Basis of Computation considering the 50 Lakhs rule.
To get started, Company Service Tax details will have to be changed:
Go to Gateway of Tally > F11:Features > Statutory & Taxation > Enable Service Tax > Set/Alter Service Tax Details, set to Yes
Applicable only for registrations - Limited Liability Partnership, Individual/Proprietary, Partnership, or A Firm, a new option has been provided to chooseAccrual or Realisation, in the Compute Tax Liability field.
Note: Accrual will be selected by default in the Compute Tax Liability field. Choose Realisation if the Service Turnover is below 50 Lakhs in a financial year.
Realisation Basis Transactions
Under Realisation basis, when the sales turnover is less than 50 Lakhs, the assessee or the Service provider (company) is liable to pay Service tax to the department within the due date only after receiving the payment from the service receiver (customer).
The process is as below:
Record a sale transaction for services rendered in a Sales / Journal Voucher
Record a payment received from customer/services receiver with a Receipt Voucher
Gateway of Tally > Accounting Vouchers > F6
If the assessee has a Service Tax / CENVAT credit, Service Tax adjustment can be done, else proceed to tax payment
Record entries for Service Tax adjustment to arrive at the net tax payable
Record the Service Tax payment
Overriding Basis of Computation during Voucher Entry
While passing a Sales or a Journal Voucher, on the Service Tax Details screen, pressing F12 will display the Configuration screen.
Setting the option Allow to override 'Basis of Computation' during entry, to Yes, will allow the override of the Basis of Computation.
Any bills in which Basis of Computation has been set to Realisation even on crossing the service turnover of 50 Lakhs, or bills in which Basis of Computation has been set to Accrual even though the assessee has opted for Realisation basis in the Company information screen, can be viewed in Exception Reports.
Go to Gateway of Tally > Display > Statutory Reports > Service Tax Reports > Exception Reports > Basis of Computation
From this list of exceptions, you can change the Basis of Computation. Press the Spacebar to select a transaction or Ctrl + Spacebar to select all transactions.
Press Alt + S to change the Basis of Computation. This will be updated in the selected transactions.