Answer / kushal gampale

Service Tax Credit is the credit available to a service provider, at the time of paying the service tax on his output services, of the service tax paid by him on his input services.
eg -
et us consider this example-

Vivek is an architect. He renders services to his client and collects the service tax amounting to Rs. 10,000.

He also uses the services of a CA who helps him in maintaining accounts and gives his tax advices. He pays Rs. 2,000 as service tax to his CA for such services.

He also purchases goods from a local supplier for his office. The supplier charges him VAT of Rs.500 on the goods purchased.

He has purchased few equipments directly from the local manufacturer who charged him excise duty of Rs.1000.

So here we have-

Output taxes collected - Rs.10,000 as service tax (collected by central government)
Input taxes paid-
Rs.2000 as service tax (collected by central government)
Rs.500 as VAT (collected by state government)
Rs.1000 as excise duty (collected by central government)

So now while paying the service tax of Rs.10,000 Vivek would ask the government for set off of all the taxes paid by him previously which comes to Rs. 3,500 (sum of all the input taxes above).

However, as mentioned earlier that Central and State governments are different entities, only set off of service tax and excise duty shall be allowed for paying service tax liability, as VAT was previously paid to the state government.

Thus, a set off of Rs.3,000 would be available, thereby making the net liability of Rs.7,000 as service tax.

This set off is nothing but CENVAT credit. Which in simple words would mean the set off of all the indirect taxes paid to the central government previously.

Hence, while paying excise, customs, service tax to the central government, these taxes if paid previously are to be allowed as set off against the net liabilities.

This is how it works.
pl correct me if i am wrong.

What are the steps in asap methodology? Plz give me answer Step by step? What are the steps in land scape? Plz give me answer step by Step?

1 Answers   TCS,

---

Change of General Ledger Cost Assignment :- We have two major company codes and plus a minor one. In order to assign intra and inter company costs correctly SAP was set up to assign cost at goods issue to the general ledger account 100000 according to plant. Now we combined two company code into one. Every end of month we must re-class costs out of the plant cost center into the cost center associated with the sales office. It is possible that we directly assign cost to cost center of cost office, how can it be possible? Please tell me how we can make this process easier. Thanks in advance, Manoj

0 Answers  

---

Tell me the 3 to 4 functional specification?

1 Answers  

---

what is documentation in SAP FI? and what is reporting in SAP FI?

0 Answers   ETPL,

---

What are the direct allocation methods of posting in co? : co- cost center accounting

0 Answers  

---

Terms of Payment

2 Answers  

---

When we will use GR/IR clearing A/c?

4 Answers   Accenture,

---

where do you control the header data?

3 Answers  

---

Can you recollect what are the configuration steps you did in GL, AP, AR, AND Asset accounting in your implementation project...?

2 Answers   TCL, TCS,

---

What is application packaging in SAP FICO

0 Answers   TCS,

---

can any 1 give me the posting keys for 1)Customer invoice, 2)Customer Payment 3)Vendor Invoice 4)Vendor Payment It is a bit urgent sir,try 2 understand me sirs

6 Answers   HP,

---

please any body tell me ,the real time responsibilities of sap fico consultant and what r the tools used by him in his real time time job. i want the entire real time job scenario

0 Answers   XYZ,

---