Pure Agent Services (Service Tax)

A pure agent is a service provider who is a liaison between another service provider and a client. An expense incurred by the pure agent is exempt from service tax.

TallyPrime provides the facility to exclude the costs and expenses incurred by a service provider acting as a pure agent from total service charges to get taxable amount.

For example, on 01-06-2016, D-Day Events acted as a pure agent in getting event management services to Expecto Magic. The service cost amounted to ₹ 1,50,000, including the pure agent expenses of ₹ 25,000. The service tax is charged at 14.0%, and Swachh Bharat Cess (SBC) and Krishi Kalyan cess are charged at 0.50% each.

To record the transaction

• 1. Gateway of Tally > Vouchers > press F8 (Sales).

  Alternatively, press Alt+G (Go To) > Create Voucher > press F8 (Sales).

• Press Ctrl+H (Change Mode) to select the required voucher mode (Accounting Invoice, in this case)
• 2.Select in the field Party’s A/c Name.

  Ensure that the Type of service for this party is Pure Agent.

  To enable Type of service as Pure Agent

• 1.Enable Set/alter service tax details?, in the party creation screen.
• 2.Select Pure Agent as the Type of service.
• 3.Press Ctrl + A to accept.
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• 3.Select the sales ledger under Particulars.
• 4.Enter the pure agent expenses 25,000, in the field Allowable Expenses.

• The Service Tax Details screen appears as shown below:

  
• 5.Enter 1,50,000 in the field Amount.
• 6.Select service tax, SBC and Krishi Kalyan cess ledgers. The values are calculated automatically on the difference amount.

• To display the Tax Analysis screen

  If you need to use this option only for the current invoice, press Ctrl+O (Related Reports) > type or select Service Tax – Tax Analysis > and press Enter.

  Note: If you are on TallyPrime Release 1.1.3 or earlier, follow the step:
  If you need to use this option only for the current invoice, press Ctrl+I (More Details) > type or select Service Tax – Tax Analysis > and press Enter.

  •  Press Alt+F5 (Detailed) to view in detailed mode.
• Press Esc to return to sales invoice.

• The sales invoice appears as shown below:

  
• 7.Enter the Narration, if required.
• 8.Press O to override the transaction details and save.