10. What is the double entry for service tax invoice and CN issued using SV tax code?

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Answer:

1. Full Service Tax Invoice issue

GL Acc Desciption Tax DR CR
300-A0001 Customer ABC 1060.00
500-000 Service Sales SV 1000.00
SST-203 SST - Deferred Tax SV 60.00

2. Partial Payment knock-off with invoice

GL Acc Desciption Tax DR CR
330-000 BANK 530.00
300-A0001 Customer ABC 530.00

System auto reverse the SST-Deferred Tax after knock-off
GL Acc Desciption Tax DR CR
SST-203 SST - Deferred Tax 30.00
SST-202 SST - Service Tax 30.00

3. Reduce/cancel the partly of the service amount. Issue CN using tax code: SV
GL Acc Desciption Tax DR CR
500-000 Service Sales SV 500.00
SST-203 SST - Deferred Tax SV 30.00
300-A0001 Customer ABC 530.00

Conclusion:

  1. SST Deferred Tax account = ZERO if the Full Service Tax Invoice (eg. SV only) outstanding is ZERO.
  2. SST Deferred Tax account <> ZERO if the service tax invoice has mixed tax type (eg. ST, SV and empty tax code).