Posting of entries in respect of supply of goods or services or both in the supplier’s login of GSTN Portal

Business Transaction 1

B Ltd, Chennai issues order no 1 dt 1/9/2017 to A Ltd, Bangalore for supply of 10 numbers of mobile phones @ Rs.1000/- each.

A supplies 10 numbers of cell phones as per order on 15th September 2017.

If both are registered under GST in their respective states thenIt is an inter-state transaction

The invoice 1 dt 15/9/2017 will look like

A Ltd, Chennai(GSTN A001)

Sold to and Consignee

B Ltd Bangalore (GSTN B001)

Value of cellphones- 10 nos @ Rs.1000/- each – 10,000/-
IGST @ 20 % –    2000/-
Total – 12,000/-

Also Read- GST Transaction Analysis: Supplies under Reverse Charge Mechanism

Business Transaction2

B Ltd, Chennai issues another order no 2 dt 1/9/2017 to A Ltd, Chennai for supply of 10 numbers of mobile phones @ Rs.1000/- each.

It is an intra-state transaction

The invoice 2 dt 15/9/2017 will look like

A Ltd, Chennai(GSTN A001)

Sold to and Consignee

B Ltd Chennai(GSTN B002)

Value of cellphones- 10 no’s @ Rs.1000/- each – 10,000/-
CGST @ 10 % –    1000/-
SGST @ 10 % –    1000/-
Total – 12,000/-

E way Bill

In both the scenarios E way bill has to accompany the consignment and to be generated by A Ltd or it’s transporter.

Returns —- GSTR1 in GSTN Portal

On 10th October 2017 A, ltd will upload file GSTR1in GST portal

Dashboard of A Ltd (Supplier) – After Profile screen

GSTIN No A001   Business Name : A Ltd

B2B Invoices

Receiverwise summary
Receiver detail No.of invoices uploaded Counter party invoices pending for Action Total Invoice value Total taxable value Total IGST Total CGST Total SGST
GSTN no of B – B001 – B Ltd 1 0 12000 10000 2000 0 0
GSTN no of B – B002 – B Ltd 1 0 12000 10000 0 1000 1000

Returns —- GSTR2( Receiver)

On 15th October 2017, B ltd will upload file GSTR2 register in GST portal

Dashboard of B Ltd

GSTIN No B001   Business Name: B Ltd

B2B Invoices -Invoices summary

Inv date Supplier Details Invoice No Total Taxable value Total invoice value status Action
15-09-17 B1 Ltd 1 10000 12000 submitted
15-09-17 B2 Ltd 2 10000 12000 submitted

 Returns —- GSTR3 ( Supplier )

On 20th October2017 GSTR3 register in GST portal

Dash board of A – GSTIN No A001

Business Name A Ltd  FY 2016-17 Return Period – Sep 2017 Status – Pending  Due date-20-09-2017

5.Turnover Details
Gross Turnover 24000
Export Turnover 0
Nil rated and Exempted T. O 4000
Non-GSTT. O 0
Net Taxable T. O 20000
6.Outward Supplies:
Details
7.Inward supplies:
Details
8.Total Tax Liability

Total Tax Liability -Auto populated from GSTR3
Sl. No Month Value IGST CGST SGST Type of supply
1 April 24000 2000 1000 1000 Goods
2 April 0 0 0 0 Services

9. TDS credit-0

10.ITC Credit-0

11. Tax Paid-0

12. Refund adjustments-0

TAX PAYMENT

Challan Details
Tax Interest Penalty Fees Others Total
CGST 1000 0 0 0 0 1000
IGST 2000 0 0 0 0 2000
SGST (State Name) 1000 0 0 0 0 1000
Total challan amount 4000 0 0 0 0 4000

Treatment of Discount in GST

In October 2017

A Ltd issues credit note No CRN 001 dt 25th Oct 2017 to B Ltd. for Rs.100/- as given below

Total value of cellphones supplied vide Inv no 1 dt 15.9.201 Rs. 20,000/-
Discount @ 1%   200/-
IGST@ 10% 2/-
Total Value 202/-

As intention of discount is neither mentioned in the order nor at the time of supplies in the invoice IGST amount of Rs.2/- cannot be adjusted in the future tax liability by A Ltd.

Hence the entry in the books of A Ltd

Sales    Dr – Rs.200/-

Cost of Sales / Sales Dr -Rs2

To B Ltd               Rs.202/-

In GSTR1 the sales to B will be shown under credit Note in October 2017 return for Rs.202/-

B Ltd, the counter party, will be accounting in the books and will reflect the corresponding entry in the debit note entry column for Rs.202/-

Thus, recognizing the sales and purchases value less by Rs. 202/- by both in the financials and also in Returns

Had this Rs.2/- discount is referred either in invoice or in the order itself, then by relating the invoice in the credit note, tax credit of Rs.2/- can be availed and allowed as a deduction in tax payment.

As GST provides for strict rules in availing of Input tax credit, it’s reversal and re-availment of the reversed credit, a separate GL code is necessary in the financial to keep track of such entries not only for statutory purpose but also for the effective review.

The nature of such transactions falling in the above categories are reverse charge mechanism, treatment of tax paid but ITC not eligible, credit availed but payment not made within 180 days etc.

We shall deal with such transactions in the next volume of this article.

Read about GSTR1 excel format

Author Bio

Qualification: Graduate
Company: FIELDWORK CONSULTING / VACS
Location: Chennai, Tamil Nadu, IN
Member Since: 03 May 2017 | Total Posts: 7
A commerce graduate with over 35 years in F&A of L&T Limited. Creation of Indirect Taxation Department for a corporate and trained the team. Significant contributor in saving tax on commercials. A Go-Getter and task master with a goal for a win-win situation to all the stake holders. Won in View Full Profile

My Published Posts

More Under Goods and Services Tax

Posted Under

Category : Goods and Services Tax (4583)
Type : Articles (14350)
Tags : goods and services tax (3145) GST (2732)

2 responses to “GST Transaction Analysis – With Practical examples-Part I”

  1. rahulrai9903@gmail.com says:

    Dear Sir,

    If I am selling goods to party ‘A’, say goods bearing MRP of Rs.100/- at a margin of 35%, i.e billed 100-35(discount)=65/-
    and Mr. A directly sells those goods to ultimate customers at MRP of Rs.100/- then what will be the impacts…am i have to pay tax on discount also…as its a aggreed term or you can say this is the commission amount what we are paying to Mr. A

  2. rahulrai9903@gmail.com says:

    Dear Sir,

    If I am selling goods to party ‘A’, say goods bearing MRP of Rs.100/- at a margin of 35%, i.e billed 100-35(discount)=65/-
    and Mr. A directly sells those goods to ultimate customers at MRP of Rs.100/- then what will be the impacts…am i have to pay tax on discount also…as its a aggreed term or you can say this is the commission amount what we are paying to Mr. A..

Leave a Reply

Your email address will not be published. Required fields are marked *