9870310368 9810688945

Learning

Learning » GST » Accounting Entries Under GST

GST Returns

Accounting Entries Under GST

Narendra Kumar

| Updated: Sep 09, 2017 | Category: GST

GST

As GST has subsumed all the indirect taxes which is now “One Nation, One Tax Regime. However, there will challenges which will be faced initially as Good & Service Tax implementation will bring much clarity in the areas of business. In this blog, we are going to discuss Accounting Entries Under GST.

Situation Under Previous laws

Under previous scenario below mentioned accounts related to indirect accounts were to be prepared by a business enterprise:

  • Excise Payable Account – For Manufacturer
  • Cenvat Credit Account – For Manufacturer
  • Output Vat Account
  • Input Vat Account
  • Service Tax – Input and Output

How to pass accounting entries under GST?

Under GST all the indirect taxes (Service tax, Vat and Excise) will be merged and maintained under one account which will benefit for availing input credit at all levels.

Following are the accounting ledgers which are required to be maintained by the assessee under GST:

  • Input CGST A/c
  • Output CGST A/c
  • Input SGST A/c
  • Output SGST A/c
  • Input IGST A/c
  • Output IGST A/c
  • Electronic Cash Ledger (accessible at GST Portal to pay GST)

Accounting Entries under GST with Examples

  • For Intrastate Transaction:
  • Purchased Goods from A within the state for Rs.10000/-GST Rate 18% (9% SGST & 9% CGST)

Accounting Entry

Purchase a/c 10000
To Input CGST

To Input SGST

900

900

To A 11800
  • Sale of Goods within the state for Rs. 25000 to X
X a/c                              Dr 29500
To Sales 25000
To Output CGST

To Output SGST

2250

2250

Accounting Entry

  • Professional Fees Paid of Rs.5000 to CA B.

Accounting Entry

Professional Fees     Dr 5000
Input CGST

Input SGST

450

450

To CA B 5900

Total Input and Output Taxes

Particulars Amount (Rs.)
Input CGST 1350
Input SGST 1350
Total Input Tax 2700
Output CGST 2250
Output SGST 2250
Total Output Tax 4500
GST Payable 1800
  • For Interstate Transaction
  • Purchased Goods worth Rs. 8000 from Z from a different state
  • GST Rate 18%

Accounting Entry

Purchases a/c        Dr 8000
IGST                      Dr 1440
To Z 9440
  • Goods sold to An interstate for Rs. 25000 (GST Rate 18%)
A                  Dr 29500
To Sales 25000
To IGST 4500
  • Professional fees paid to CA K of Rs. 5000
Professional Fees    Dr 5000
 Input CGST            Dr

Input SGST             Dr

450

450

To CA K 5900
  • Goods sold to M within the same state for Rs. 30000
M                        Dr 35400
To Sales 30000
To Output CGST

To Output SGST

2700

2700

Total Input and Output Taxes

Particulars Amount (in Rs.)
Output CGST

Output SGST

2700

2700

Total Output Taxes 5400
Output IGST 4500
Input CGST

Input SGST

450

450

Total Input Taxes 900
Input IGST 1440
GST Payable 7560

Please note that there are some rules and regulations for claiming input tax credit

 Impact on Profit and Loss Account and Balance Sheet

  • As all the tax expenses are not classified as direct or indirect expense/income. Therefore it will not impact the profit and loss account.
  • However, if input tax credit on certain goods is not available in such a case the GST paid has to be booked as expenses which will ultimately reduce the profit.
  • The tax liability or input tax credit will be shown as liability or asset in the Balance Sheet

Accounting Entries under GST by Composition Dealer

 A person registered under Composition Scheme are not allowed to take input tax credit and also are not allowed to charge Good & Service Tax from the customer.

Thus they are not required to maintain accounts for input and output GST

Accounting entries for Composition Dealers

1)    Sale of Goods Cash a/c               Dr 5000        –

To Sales                      –            5000

2)    Purchase of Goods Purchase a/c        Dr 4000
 To Cash                      –            4000
3)    Payment of GST Composition fees Dr 25           –
To Bank                       –           25

 

Impact on Profit and Loss Account and Balance Sheet

  • Composition Fees is an expense and will be debited to the profit and loss account.
  • There will be no impact on the Balance Sheet.
  • All the capital assets will be shown under assets will be including Good & Service Tax.

For any additional information or for GST Registration visit Enterslice and regarding GST Return Filing, You can also call our customer support at +91 9069142028.

  • 277
  •  
  •  
  •  
  •  
  •  
  •  
  •  
  •  
    277
    Shares
Narendra Kumar

Experienced Finance and Legal Professional with 12+ Years of Experience in Legal, Finance, Fintech, Blockchain, and Revenue Management.

Business Plan Consultant


Request A Call Back

Are you human?: 5 + 7 =

Categories

Trending Articles

Hey I'm Suman. Let's Talk!