Goods & Services Tax (GST) was implemented in India from 1st July 2017. Since then, the GST Council has been working to make the rules easier to make businesses easier and simplified GST entries help us understand transactions in a better way. The Customs and Excise Act in India is a comprehensive, multi-category, tax-deductible tax on all value additions. which also have the same GST journal entry and purchase entry with GST or sales entry with GST
In simple terms, Goods and Service Tax (GST) is an indirect tax levied on the supply of goods and services. GST accounting law replaces many of the indirect tax laws that existed in India before.
In this article, we will learn about Accounting Entries under GST and GST Entry, what GST input receivable account is, GST input receivable a/c is,
Under the GST number search regime, the taxpayer is required to maintain the following accounts which is said to be GST payable journal entry in tally and also input cgst in trial balance.
CGST A / C is also divided into Output CGST and Output CGST.
SGST A / C is also divided into Output SGST and Output SGST.
IGST A / C is further divided into Output IGST and Input IGST.
This book is kept by the taxpayer on the GST Portal to pay GST
Taking CGST @ 8% and SGST @ 8% GST Accounting entries: The accounting Journal entries with GST will be:
|1||Purchase A / c Dr||10,000|
|CGST Input Dr||800|
|SGST Input Dr||800|
|To Creditors A / c (Purchase journal entry with GST)||11,600|
|2||Debtors A/c Dr||34,800|
|To Sales A / c||30,000|
|To Output CGST A/c||2,400|
|To Output SGST A/c(sales entry with GST)||2,400|
|3||Consultation fee A / c Drs||500|
|CGST Input Dr||40|
|Input SGST Dr||40|
|To Bank A / c||580|
|4||Furniture A / c Dr||10,000|
|CGST Input A/c Dr||800|
|SGST Input A/C Dr||800|
|To ABC furniture A/c||11,600|
By GST Entry in Tally we get, Total Input CGST = 800 + 40 + 800 = 1,640 INR Total Input SGST = 800 + 40 + 800 = 1,640 INR Total output CGST = 2,400 INR Total SGST output = 2,400 INR Therefore, NET CGST to be paid = 2,400 - 1,640 = 760 INR NET SGST to be paid = 2,400 - 1,640 = 760 INR
Let's understand the impact of GST on the financial statements Profit and Loss Statement and what is GST in accounting.
|Details||Price (INR)||Details||Price (INR)|
You will experience a decrease in the cost of raw materials, purchases, and other costs since the taxpayer can avail ITC on these expenses in GST return.
|Assets||Amount (INR)||Liabilities||Amount (INR)|
|Current Liabilities||XXXX||Current Assets||XXXX|
|Tax Payable||XXXX||Bill Receivable||XXXX|
|Bills Payable||XXXX||Credit Receivable||XXXX|
Under accounting for GST journal entries, the cost of fixed assets will also decrease as the taxpayer can avail ITC (Input Tax Credit) on fixed assets.
The Central Government also issued draft rules for GST Accounts and Records (draft rules of records), including an additional list of GST accounting and record-keeping requirements. The business owner or operator of the facility used for storage must ensure books of accounts are available till the time the goods are in storage. This includes details relating to the shipment, delivery, receipt, and disposal of goods. The carrier of goods and services must keep records of the goods delivered, delivered, and the goods stored for delivery. Under the GST code regime, all records and accounts must be kept at a central place where all business transactions take place. In the event that more than one location is mentioned in the registration certificate, records and accounts associated with each place of business must be kept as and where the accounts relate to. If records are kept electronically, business owners must ensure proper record keeping/accounts. Also, all records should be ready to be displayed whenever required. Where the profit of the entity exceeds the prescribed financial limit, the entity is responsible for the audit.
Journal entry for GST includes several entries. They are Purchase Transactions, Sale Transactions, Set Off of Input Credit Against Out Tax Liability of GST, Reverse Charge Transaction, Refunds (Export of goods and services), and Imports.
For accounting entries under GST, you must maintain the following accounting ledgers -Input CGST A/C, Output CGST A/C, Input SGST A/C, Output SGST A/C, Input IGST A/C, Output IGST A/C, and Electronic Cash Ledger (Government GST portal to pay GST). You can divide it into two- Intra State and Inter-State entries.
You must maintain several accounts under GST like input supplies, output supplies, production, input credit, output tax, stock, and import-export.
A journal entry for sales tax can be understood as a debit to the accounts receivable for an exact amount of the invoice or cash received. Furthermore, it is a credit to the sales account and sales tax payable account for the exact same amount of sale taxes levied.