GST Accounting Entries, How to Pass Accounting Entries Under GST

GST Accounting Entries, How to pass accounting entries under GST: How to pass accounting entries under GST, How to pass GST Accounting Entri

Ankita Khetan

Jun 26, 2017

Last update on Jun 26, 2017

GST Accounting Entries, How to pass accounting entries under GST: How to pass accounting entries under GST, How to pass GST Accounting Entries In India, GST Accounting Entries, How to pass accounting entries under GST, GST Accounting Entries in Tally, GST Accounting Entries in Sap, Examples of GST Entries, How to pass GST Entries, Entry for Purchase in GST, Entry for Sale in GST, GST Journal Entries, Entries to be passed in GST, Accounting ledgers which needs to be maintained by assesse under GST Goods and service tax or GST will be one tax to subsume all below taxes. (i) Taxes currently levied and collected by the Centre : a. Central Excise duty b. Duties of Excise (Medicinal and Toilet Preparations) c. Additional Duties of Excise (Goods of Special Importance) d. Additional Duties of Excise (Textiles and Textile Products) e. Additional Duties of Customs (commonly known as CVD) f. Special Additional Duty of Customs (SAD) g. Service Tax h. Central Surcharges and Cesses so far as they relate to supply of goods and services (ii) State taxes that would be subsumed under the GST are : a. State VAT b. Central Sales Tax c. Luxury Tax d. Entry Tax (all forms) e. Entertainment and Amusement Tax (except when levied by the local bodies) f. Taxes on advertisements g. Purchase Tax h. Taxes on lotteries, betting and gambling i. State Surcharges and Cesses so far as they relate to supply of goods and services. Under Current scenario Separate accounts have to be maintained for excise, VAT, CST and service tax. To know How to pass Vat, Excise, Service Tax and TDS Entries under current Scenario Click Here Under Current scenario Below mentioned accounts related to indirect taxes needs to be prepared by an organization.

Excise payable a/c (for manufacturers)
CENVAT credit a/c (for manufacturers)
Output VAT a/c
Input VAT a/c
Input Service tax a/c
Output Service tax a/c

GST Accounting Entries, How to Pass Accounting Entries Under GST

Under GST Regime Service tax, VAT, Excise will be maintained under one account and assesse will get benefit of setting of and availing Input credit at all levels. Following are the Accounting ledgers which needs to be maintained by assesse under GST for recording in books of accounts apart from Purchase, Sales and other 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
Electronic Cash Ledger (Government GST portal to pay GST)

The Accounting entries can be divided into two Parts: One is Intra State (within State) and other is Inter State (other State).

Accounting Entries Under GST Regime

Lets take in to consideration below examples for GST Entries.

GST Accounting Entries for Intra state Transactions (i.e within the State)

Mr. A purchased goods Rs. 2,00,000 locally (intrastate). He sold them for Rs. 3,00,000 in the same state. He paid legal consultation fees Rs. 10,000. He purchased furniture for his office for Rs. 40,000 from XYZ Furniture (Assuming CGST @8% and SGST@8%)

Sr. No.	Particulars	Dr.	Cr.
1	Purchase A/c Dr.	200,000.00
	Input CGST A/c Dr.	16,000.00
	Input SGST A/c ...Dr.	16,000.00
	To Creditors A/c		232,000.00
2	Debtors A/c Dr.	348,000.00
	To Sales A/c		300,000.00
	To Output CGST A/c		24,000.00
	To Output SGST A/c		24,000.00
3	Legal fees A/c ..Dr.	10,000.00
	Input CGST A/c Dr.	800.00
	Input SGST A/c Dr.	800.00
	To Bank A/c		11,600.00
4	Furniture A/c ..Dr.	40,000.00
	Input CGST A/c Dr.	3,200.00
	Input SGST A/c Dr.	3,200.00
	To XYX Furniture A/c		46,400.00
5	Output CGST A/c Dr.	24,000.00
	Output SGST A/c Dr.	24,000.00
	To Input CGST A/c		20,000.00
	To Input SGST A/c		20,000.00
	To Electronic Cash Ledger A/c		8,000.00
		686,000.00	686,000.00

Total Input CGST = 16,000+800+3,200 = Rs. 20,000 Total Input SGST = 16,000+800+3,200 = Rs. 20,000 Total output CGST = 24,000 Total output SGST = 24,000 Therefore Net CGST payable = 24,000-20,000 = 4,000 Net SGST payable = 24,000-20,000 = 4,000 Thus Output liability of Rs. 48,000 has bee adjusted with Input tax credit of Rs. 40,000. So, net tax liability of CGST is Rs. 4,000 and SGST Rs. 4,000.

GST Accounting Entries for Inter state transactions (i.e Outside the State)

Mr. X purchased goods Rs. 3,00,000 from outside the State. He sold Rs. 3,00,000 locally. He sold Rs.2,00,000 outside the state. He paid telephone bill Rs. 10,000. He purchased an A/C for his office for Rs. 24,000 (locally) Assuming CGST @8% and SGST@8%

Sr. No.	Particulars	Dr.	Cr.
1	Purchase A/c Dr.	300,000.00
	Input IGST A/c Dr.	48,000.00
	To Creditors A/c		348,000.00
2	Debtors A/c Dr.	348,000.00
	To Sales A/c		300,000.00
	To Output CGST A/c		24,000.00
	To Output SGST A/c		24,000.00
3	Debtors A/c Dr.	232,000.00
	To Sales A/c		200,000.00
	To Output IGST A/c		32,000.00
4	Telephone Expenses A/c ..Dr.	10,000.00
	Input CGST A/c ..Dr.	800.00
	Input SGST A/c ..Dr.	800.00
	To Bank A/c		11,600.00
5	Office Equipment A/c...Dr.	24,000.00
	Input CGST A/c Dr.	1,920.00
	Input SGST A/c Dr.	1,920.00
	To ABC Furniture Shop A/c		27,840.00
1	Setoff against CGST output
	Output CGST Dr.	18,720
	To Input CGST A/c		2,720
	To Input IGST A/c		16,000

2	Setoff against SGST output
	Output SGST Dr.	2,720
	To Input SGST A/c		2,720

3	Setoff against IGST output
	Output IGST Dr.	32,000
	To Input IGST A/c		32,000

4	Final payment
	Output CGST A/c Dr.	5,280
	Output SGST A/c Dr.	21,280
	To Electronic Cash Ledger A/c		26,560
		1047440	1047440

Total CGST input =800+1920=2,720 Total CGST output =24,000 Total SGST input =800+1920=2,720 Total SGST output =24,000 Total IGST input =48,000 Total IGST output =32,000 Any IGST credit will first be applied to set off IGST and then CGST. So out of total input IGST of Rs. 48,000, firstly it will be completely setoff against IGST. Then balance Rs.16,000 against CGST. From the total liability Rs.80,000, only Rs. 26,560 is payable

Particulars	CGST	SGST	IGST
Output liability	24,000	24,000	32,000
Less: Input tax credit
CGST (Telephone+Office)	2,720
SGST (Telephone+Office)		2,720
IGST	16,000		32,000
Amount payable	5,280	21,280	NIL

Entry for Purchase of Goods under GST : Example of booking input under GST

Sr. No.	Particulars	Dr.	Cr.
If purchases are made within the state (Intra State)
1	Purchase A/c Dr.	200,000.00
	Input CGST A/c Dr.	16,000.00
	Input SGST A/c ...Dr.	16,000.00
	To Creditors or Cash BankA/c		232,000.00
If purchases are made from other state (Inter State)
2	Purchase A/c Dr.	300,000.00
	Input IGST A/c Dr.	48,000.00
	To Creditors or Cash BankA/c		348,000.00
If purchases are made from Outside India (Import)
3	Purchase A/c Dr.	200,000.00
	Input IGST A/c Dr.	32,000.00
	To Creditors or Cash BankA/c		200,000.00
	To IGST Payable A/c.		32,000.00
	(Reverse charge mechanism applies here)

Entry for Sale of Goods : Example of Booking Output liability under GST

Sr. No.	Particulars	Dr.	Cr.
If Sales are made within the state (Intra State)
1	Debtors A/c.or Cash/Bank A/c.--Dr	216,000.00
	To Sales A/c. --------------- Cr.		200,000.00
	To Output CGST A/c. ----- Cr.		16,000.00
	To Output SGST A/c. ----- Cr.		16,000.00
If sales are made from other state (Inter State)
2	Debtors A/c.or Cash/Bank A/c.--Dr	232,000.00
	To Sales A/c. --------------- Cr.		200,000.00
	To Output IGST A/c. ----- Cr.		32,000.00
If sales are made outside the Country (Export)
3	Debtors A/c. or Cash/Bank A/c. -Dr.	200,000.00
3	To Sales (Export) A/c. -------------Cr.		200,000.00
	(Export sale is Exempt)

Read the Section 35 of CGST Act,2017 of Bare Act - Accounts and other records Read the Section 35 of CGST Act,2017 of Bare Act - Period of retention of accounts

Example of GST Entry for expenditure incurred for business purpose

Sr. No.	Particulars	Dr.	Cr.
If any expenditure are incurred within the state (Intra State)
1	Expenditure A/c Dr.	200,000.00
	Input CGST A/c Dr.	16,000.00
	Input SGST A/c ...Dr.	16,000.00
	To Creditors or Cash BankA/c		232,000.00
If expenditure are incurred from other state (Inter State)
2	Expenditure A/c Dr.	300,000.00
	Input IGST A/c Dr.	48,000.00
	To Creditors or Cash BankA/c		348,000.00
If expenditure are incurred from Outside India (Import)
3	Expenditure A/c Dr.	200,000.00
	Input IGST A/c Dr.	32,000.00
	To Creditors or Cash BankA/c		200,000.00
	To IGST Payable A/c.		32,000.00
	(Reverse charge mechanism applies here)

Examples of GST Entry for Purchase of Asset:

Sr. No.	Particulars	Dr.	Cr.
If any asset is purchased within the state
1	Assest A/c Dr.	200,000.00
	Input CGST A/c Dr.	16,000.00
	Input SGST A/c ...Dr.	16,000.00
	To Creditors or Cash BankA/c		232,000.00
If any asset is purchased from other state (Inter State)
2	Assest A/c Dr.	300,000.00
	Input IGST A/c Dr.	48,000.00
	To Creditors or Cash BankA/c		348,000.00
If any asset is purchased from other Country (Import)
3	Assest A/c Dr.	200,000.00
	Input IGST A/c Dr.	32,000.00
	To Creditors or Cash BankA/c		200,000.00
	To IGST Payable A/c.		32,000.00
	(Reverse charge mechanism applies here)