{"id":3831,"date":"2017-09-09T08:49:04","date_gmt":"2017-09-09T03:19:04","guid":{"rendered":"https:\/\/enterslice.com\/learning\/?p=3831"},"modified":"2020-12-30T17:36:09","modified_gmt":"2020-12-30T12:06:09","slug":"accounting-entries-under-gst","status":"publish","type":"post","link":"https:\/\/enterslice.com\/learning\/accounting-entries-under-gst\/","title":{"rendered":"Accounting Entries Under GST"},"content":{"rendered":"<p class=\"has-drop-cap\">As GST has subsumed all the indirect taxes which is now &ldquo;One Nation, One Tax Regime. However, there will be challenges which will be faced initially as&nbsp;Good &amp; Service Tax implementation&nbsp;will bring much clarity in the areas of business. In this blog, we are going to discuss <a class=\"glossaryLink\"  aria-describedby=\"tt\"  data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Accounting&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;Accounting is the language of business, serving as the backbone of financial management and decision-making. It involves the systematic recording, analysis, and reporting of financial(...)&lt;\/div&gt;\"  href=\"https:\/\/enterslice.com\/learning\/terms\/accounting\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>Accounting<\/a> Entries Under GST.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Situation under Previous laws<\/h2>\n\n\n\n<p>Under previous scenario below mentioned accounts related to indirect accounts were to be prepared by a business enterprise:<\/p>\n\n\n\n<ul><li>Excise Payable Account &ndash; For Manufacturer<\/li><li>Cenvat Credit Account &ndash; For Manufacturer<\/li><li>Output Vat Account<\/li><li>Input Vat Account<\/li><li>Service Tax &ndash; Input and Output<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">How to pass accounting entries under GST?<\/h2>\n\n\n\n<p>Under<a href=\"https:\/\/enterslice.com\/gst-registration\"><strong> GST <\/strong><\/a>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.<\/p>\n\n\n\n<p><strong>Following are the accounting ledgers which are required to be maintained by the assessee under GST:<\/strong><\/p>\n\n\n\n<ul><li>Input CGST A\/c<\/li><li>Output CGST A\/c<\/li><li>Input SGST A\/c<\/li><li>Output SGST A\/c<\/li><li>Input IGST A\/c<\/li><li>Output IGST A\/c<\/li><li>Electronic Cash Ledger (accessible at&nbsp;<strong>GST Portal<sup><a href=\"https:\/\/www.gst.gov.in\/\">[1]<\/a><\/sup><\/strong>&nbsp;to pay GST)<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Accounting Entries under GST with Examples<\/h2>\n\n\n\n<ul><li>For Intrastate Transaction:<\/li><li>Purchased Goods from A within the state for Rs.10000\/-<a href=\"https:\/\/enterslice.com\/learning\/latest-gst-rates-india\/\"><strong>GST Rate<\/strong>&nbsp;<\/a>18% (9% SGST &amp; 9% CGST)<\/li><\/ul>\n\n\n\n<p><strong>Accounting Entry<\/strong><\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td>Purchase a\/c<\/td><td>10000<\/td><td>&ndash;<\/td><\/tr><tr><td>To Input CGST To Input SGST<\/td><td>900 900<\/td><td>&ndash;<\/td><\/tr><tr><td>To A<\/td><td>&ndash;<\/td><td>11800<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<ul><li>Sale of Goods within the state for Rs. 25000 to X<\/li><\/ul>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td>X a\/c&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Dr<\/td><td>29500<\/td><td>&ndash;<\/td><\/tr><tr><td>To Sales<\/td><td>&ndash;<\/td><td>25000<\/td><\/tr><tr><td>To Output CGST To Output SGST<\/td><td>&ndash; &ndash;<\/td><td>2250 2250<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p><strong>Accounting Entry<\/strong><\/p>\n\n\n\n<ul><li>Professional Fees Paid of Rs.5000 to CA B.<\/li><\/ul>\n\n\n\n<p>Accounting Entry<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td>Professional Fees&nbsp;&nbsp;&nbsp;&nbsp; Dr<\/td><td>5000<\/td><td>&ndash;<\/td><\/tr><tr><td>Input CGST Input SGST<\/td><td>450 450<\/td><td>&ndash;<\/td><\/tr><tr><td>To CA B<\/td><td>&ndash;<\/td><td>5900<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p><strong>Total Input and Output Taxes<\/strong><\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td>Particulars<\/td><td>Amount (Rs.)<\/td><\/tr><tr><td>Input CGST<\/td><td>1350<\/td><\/tr><tr><td>Input SGST<\/td><td>1350<\/td><\/tr><tr><td>Total Input Tax<\/td><td>2700<\/td><\/tr><tr><td>Output CGST<\/td><td>2250<\/td><\/tr><tr><td>Output SGST<\/td><td>2250<\/td><\/tr><tr><td>Total Output Tax<\/td><td>4500<\/td><\/tr><tr><td>GST Payable<\/td><td>1800<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<ul><li>For Interstate Transaction<\/li><li>Purchased Goods worth Rs. 8000 from Z from a different state<\/li><li>GST Rate 18%<\/li><\/ul>\n\n\n\n<p>Accounting Entry<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td>Purchases a\/c&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Dr<\/td><td>8000<\/td><td>&ndash;<\/td><\/tr><tr><td>IGST&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Dr<\/td><td>1440<\/td><td>&ndash;<\/td><\/tr><tr><td>To Z<\/td><td>&ndash;<\/td><td>9440<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<ul><li>Goods sold to an interstate for Rs. 25000 (GST Rate 18%)<\/li><\/ul>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td>A&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Dr<\/td><td>29500<\/td><td>&ndash;<\/td><\/tr><tr><td>To Sales<\/td><td>&ndash;<\/td><td>25000<\/td><\/tr><tr><td>To IGST<\/td><td>&ndash;<\/td><td>4500<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<ul><li>Professional fees paid to CA K of Rs. 5000<\/li><\/ul>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td>Professional Fees&nbsp;&nbsp;&nbsp; Dr<\/td><td>5000<\/td><td>&ndash;<\/td><\/tr><tr><td>&nbsp;Input CGST&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Dr Input SGST&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Dr<\/td><td>450 450<\/td><td>&ndash; &ndash;<\/td><\/tr><tr><td>To CA K<\/td><td>&ndash;<\/td><td>5900<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<ul><li>Goods sold to M within the same state for Rs. 30000<\/li><\/ul>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td>M&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Dr<\/td><td>35400<\/td><td>&ndash;<\/td><\/tr><tr><td>To Sales<\/td><td>&ndash;<\/td><td>30000<\/td><\/tr><tr><td>To Output CGST To Output SGST<\/td><td>&ndash; &ndash;<\/td><td>2700 2700<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p>Total Input and Output Taxes<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td>Particulars<\/td><td>Amount (in Rs.)<\/td><\/tr><tr><td>Output CGST Output SGST<\/td><td>2700 2700<\/td><\/tr><tr><td>Total Output Taxes<\/td><td>5400<\/td><\/tr><tr><td>Output IGST<\/td><td>4500<\/td><\/tr><tr><td>Input CGST Input SGST<\/td><td>450 450<\/td><\/tr><tr><td>Total Input Taxes<\/td><td>900<\/td><\/tr><tr><td>Input IGST<\/td><td>1440<\/td><\/tr><tr><td>GST Payable<\/td><td>7560<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p><strong>Please note that there are some rules and regulations for claiming input tax credit<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Impact on Profit and Loss Account and Balance Sheet<\/h2>\n\n\n\n<ul><li>As all the tax expenses are not classified as direct or indirect expense\/income. Therefore it will not impact the profit and loss account.<\/li><li>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.<\/li><li>The tax liability or input tax credit will be shown as liability or asset in the Balance Sheet<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Accounting Entries under GST by Composition Dealer<\/h2>\n\n\n\n<p><strong>&nbsp;<\/strong>A person registered under&nbsp;<a href=\"https:\/\/enterslice.com\/learning\/what-is-composition-scheme-gst-law\/\"><strong>Composition <\/strong><\/a><a href=\"https:\/\/enterslice.com\/learning\/what-is-composition-scheme-gst-law\/\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>Scheme<\/strong><\/a>&nbsp;is not allowed to take input tax credit and also are not allowed to charge Goods &amp; Service Tax from the customer.<\/p>\n\n\n\n<p>Thus they are not required to maintain accounts for input and output GST.<\/p>\n\n\n\n<p><strong>Accounting entries for Composition Dealers<\/strong><\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td>1)&nbsp;&nbsp;&nbsp; Sale of Goods<\/td><td>Cash a\/c&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Dr 5000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &ndash; To Sales&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &ndash;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5000<\/td><\/tr><tr><td>2)&nbsp;&nbsp;&nbsp; Purchase of Goods<\/td><td>Purchase a\/c&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Dr 4000<\/td><\/tr><tr><td><\/td><td>&nbsp;To Cash&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &ndash;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4000<\/td><\/tr><tr><td>3)&nbsp;&nbsp;&nbsp; Payment of GST<\/td><td>Composition fees Dr 25&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &ndash;<\/td><\/tr><tr><td><\/td><td>To Bank&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &ndash;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 25<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\">Impact on Profit and Loss Account and Balance Sheet<\/h2>\n\n\n\n<ul><li>Composition Fees is an expense and will be debited to the profit and loss account.<\/li><li>There will be no impact on the Balance Sheet.<\/li><li>All the capital assets will be shown under assets will be including Good &amp; Service Tax.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Conclusion<\/h2>\n\n\n\n<p>With the introduction of new GST regime, different taxes have been subsumed therefore the number of accounts to be created has reduced significantly. In case you seek to know more on GST related laws, contact <a href=\"https:\/\/enterslice.com\/\"><strong>Enterslice<\/strong><\/a>.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/enterslice.com\/learning\/gst-on-work-contracts-and-implication-in-the-oil-gas-sector\/\">\nGST on work contracts and implication in the Oil &amp; Gas Sector\n<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>As GST has subsumed all the indirect taxes which is now &ldquo;One Nation, One Tax Regime. However, there will be challenges which will be faced initially as&nbsp;Good &amp; Service Tax implementation&nbsp;will bring much clarity in the areas of business. In this blog, we are going to discuss <a class=\"glossaryLink\" aria-describedby=\"tt\" data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Accounting&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;Accounting is the language of business, serving as the backbone of financial management and decision-making. It involves the systematic recording, analysis, and reporting of financial(...)&lt;\/div&gt;\" href=\"https:\/\/enterslice.com\/learning\/terms\/accounting\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>Accounting<\/a> Entries Under GST. Situation under Previous laws [&hellip;]<\/p>\n","protected":false},"author":35,"featured_media":43234,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[49],"tags":[3613],"acf":{"service_id":"68"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v14.6.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Accounting Entries under GST - Enterslice Private Limited<\/title>\n<meta name=\"description\" content=\"Under GST all the indirect taxes will be merged and maintained under one account which will benefit for availing input credit at all levels.\" \/>\n<meta name=\"robots\" content=\"index, follow\" \/>\n<meta name=\"googlebot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta name=\"bingbot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/enterslice.com\/learning\/accounting-entries-under-gst\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Accounting Entries under GST - Enterslice Private Limited\" \/>\n<meta property=\"og:description\" content=\"Under GST all the indirect taxes will be merged and maintained under one account which will benefit for availing input credit at all levels.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/enterslice.com\/learning\/accounting-entries-under-gst\/\" \/>\n<meta property=\"og:site_name\" content=\"Enterslice\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/enterslice\" \/>\n<meta property=\"article:published_time\" content=\"2017-09-09T03:19:04+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2020-12-30T12:06:09+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2017\/09\/Accounting-Entries-under-GST.png\" \/>\n\t<meta property=\"og:image:width\" content=\"670\" \/>\n\t<meta property=\"og:image:height\" content=\"352\" \/>\n<meta name=\"twitter:card\" content=\"summary\" \/>\n<meta name=\"twitter:creator\" content=\"@enterslice\" \/>\n<meta name=\"twitter:site\" content=\"@enterslice\" \/>\n<!-- \/ Yoast SEO plugin. -->","authorName":"Ashish M. 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