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Former Member
May 04, 2010 at 08:49 AM

Utilization of Cenvat Credit from Service Tax Payable.

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Hi,

Please guide me whether the process i am following is correct or not. And if it is correct, please help with what additional steps i might be required to perform inorder to resolve the issue.

Case: We are a Company where we donot manufacture and sell items. But we do provide services to our customers. Hence we would like to take the Cenvat input credit from the materials that we buy for our requirements and would like to utilize the Service tax that we would have to pay to Government (On our service contracts with customers).

During the process our RG23A Part-I, Part-II, RG23C Part-I, Part-II have been updated properly. Service tax entries for A/P and A/R have been posted successfully. And the next i am trying to do is utilize Service tax credit (AR) with Cenvat credit available from RG23A, and RG23C by using Transaction code: J2iUN.

I am using the option pay Service tax from Cenvat Cr.

Issue:

When i try to simulate after selecting the utilization from Basic excise duty, education cess and higher education cess i am able to see the entry that i require. But when i try to post the entry system is giving the following error message.

Balancing field " Profit center " in line item 001 not filled. Message ID: GLT2201.

The simulated entry is:

Sales tax payable A/c Dr

Education Cess payable A/c Dr

Secondary Higher Education Cess Payable A/c Dr

Cenvat Basic Excise Duty A/c Cr

Cenvat Education Cess A/c Cr

Cenvat Hig Sec Education Cess A/c Cr

Our Company code is active for Document Splitting with Profit center as a mandatory field.

Looking forward.

Thanks and Regards,

Purna.