Calculation of Service tax (under RC) on man power service received from un-registered service provider

Dear Expert,

Our company receiving manpower services from UN-Registered Service Providers/Small Service Provider (Annual Turnover below 9 Lakhs). In this scenario what are the set ups to be done in the system to achieve the following result.

GL Entries Debit Credit
Factory Direct wages 10000
Interim Serv.Tax Receivable 927
TDS on Contractors 100
Interim Serv.Tax Payable 927
Creditor- XYZ 9900
Total 10927 10927

Note:1. Value of the Service is Rs.10,000/-

  1. The system should calculate ST liability (Service Receiver) on 75% of Rs.10,000/-.

  2. The System should not calculate ST liability (Service Provider) on 25% of Rs.10,000/-

Kindly advise.

Thanks and Regards,

Raghavendra

Raghavendra,

if no liability has to be booked on Vendor for 25% then

Setup Reverse Charge % as 100 in the Srv. Tax Reverse Charge Setup and put 25 % Abatement in Service Tax Setup.

Thanks,

Nandesh Gowda

thank you sir.