CA Tribhuwan Dewangan

CA Tribhuwan DewanganAccounting Entries for GST :-

The Goods and Services Tax has revolutionized the Indian taxation system. The GST Act was passed in the Lok Sabha on 29th March, 2017, and came into effect from 1st July, 2017. GST is a Indirect Tax which replaced Excise Duty, Service Tax and Value Added Tax (VAT). Now the GST is is a single tax on the supply of goods and services, right from the manufacturer to the consumer.

It has been observed that there is lots of confusion among small business person and retail traders on how to maintain accounts related to GST, how to make entries in the books of accounts, how to pay the liability and how to book the inputs.

In this article I am trying to clear accounting aspects relating to Goods and Service Tax for small business person or retail traders –

1 For Booking Sale/Service Debit Amount Credit Amount Accounting Head
Party/Cash/Bank Dr Sundry Debtors/Bank/Cash
To IGST Payable Current Liabilities
Or
To CGST Payable Current Liabilities
To SGST Payable Current Liabilities
To Sale/Service Income
2 For Purchase/Expenses Debit Amount Credit Amount Accounting Head
Purchase /Services Received Dr Expenses
IGST Receivable Dr Current Assets
Or
CGST Receivable Dr Current Assets
SGST Receivable Dr Current Assets
To Party/Cash/Bank Sundry Creditors/Bank/Cash
3 For Expenses related to RCM/Purchase from Unregistered Dealer Debit Amount Credit Amount Accounting Head
Carriage Inward/Expenses Dr Expenses
IGST Receivable( RCM) Dr Current Assets
Or
CGST Receivable (RCM) Dr Current Assets
SGST Receivable (RCM) Dr Current Assets
To IGST Payable Current Liabilities
Or
To CGST Payable Current Liabilities
To SGST Payable Current Liabilities
To Party/Cash/Bank Sundry Creditors/Bank/Cash
4 At the time of Payment of Expenses Debit Amount Credit Amount Accounting Head
Party A/c Dr Sundry Creditors
To Cash/Bank Cash/Bank
5 At the time of Settlement of GST A/c or Payment through Input Credit Debit Amount Credit Amount Accounting Head
IGST Payable Dr Current Liabilities
or
CGST Payable Dr Current Liabilities
SGST Payable Dr Current Liabilities
To IGST Receivable Current Assets
or
To CGST Receivable Current Assets
To SGST Receivable Current Assets
6 At the time of balance amount of GST Payable to be paid Debit Amount Credit Amount Accounting Head
IGST Payable Dr Current Liabilities
CGST Payable Dr Current Liabilities
SGST Payable Dr Current Liabilities
To Bank/Cash Bank/Cash
7 After payment of RCM next month we will take credit Debit Amount Credit Amount Accounting Head
IGST Receivable Dr Current Assets
or
CGST Receivable Dr Current Assets
SGST Receivable Dr Current Assets
To IGST Receivable( RCM) Current Assets
or
To CGST Receivable (RCM) Current Assets
To SGST Receivable (RCM) Current Assets
8 At the time of receiving Advance against supply Debit Amount Credit Amount Accounting Head
Bank Dr 50000 Bank
IGST Interim Payable Dr 9000 Current Liabilities
or
CGST Interim Payable Dr Current Liabilities
SGST Interim Payable Dr Current Liabilities
To IGST Payable 9000 Current Liabilities
or
To CGST Payable Current Liabilities
To SGST Payable Current Liabilities
To Party 50000 Sundry Debtors
(Suppose we have received advance of Rs. 50,000/- & IGST is 18%) 59000 59000
9 At the time of Billing /Invoicing Debit Amount Credit Amount Accounting Head
Party Dr 118000 Sundry Debtors
To IGST Payable 9000 Current Liabilities
or
To CGST Payable Current Liabilities
To SGST Payable Current Liabilities
To IGST Interim Payable 9000
To or
To CGST Interim Payable Current Liabilities
To SGST Interim Payable Current Liabilities
To Sales/Service 100000 Income
(Billed amount is Rs. 1,00,000/- and IGST 18%, IGST Interim Payable will adjust first & balance will be payable) 118000 118000

Note: –

1. The IGST or CGST & SGST will be applicable as the case may be IGST will be applicable in case of inter state sale (other state sale) CGST & SGST will be applicable in case of intra state sale (within the same state)

2 In this article only GST impacted entries has been discussed.

Disclaimer: The views expressed in this article are strictly personal. The content of this document are solely for informational purpose. It doesn’t constitute professional advice or recommendation. The Author does not accept any liabilities for any loss or damage of any kind arising out of information in this article and for any actions taken in reliance thereon.

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Category : Goods and Services Tax (5592)
Type : Articles (15304)
Tags : goods and services tax (4123) GST (3717)

5 responses to “Accounting Entries for GST related Transactions”

  1. Amit says:

    Dear Sir

    if purchase a car mobile charger for company vice president so we have post entry witch expenses.

  2. Manoj says:

    Bill of entry on import invoice ki entry kese hogi?

  3. Abhinav Rastogi says:

    Dear Sir,
    Please guide the entries explained at point No. 8 & 9 for advances and billing thereof, along with the appropriate figures and GST payment liability when advance received & bill generated are in two different months.

    • dewa43421 says:

      Dear Abhinav Ji,
      The above entry will work in any month, but if you received advance more and billing amount will less than advance received then, you need to adjust GST amount with different Invoice/bill, because at the time of filing GSTR-1 only advance amount & GST amount need to put up.

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