Under the new system of one nation one tax, i.e. GST all these taxes (excise, VAT, service tax) will get subsumed into 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 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). Let us give example of Intra state (i.e within the State)

Example of Intra State(i.e within the State) (GST applicable rate to be 16%)

  1. Mr. X purchased goods Rs. 2,00, 000 locally (intrastate)
  2. He sold them for Rs. 3,00,000 in the same table
  3. He paid Chartered Accountant fees Rs. 10000
  4. He purchased Asset for his office for Rs. 20000

Assuming CGST @ 8% and SGST @ 8%

The entries will be

1

Purchase A/c                    Dr

2,00,000

 

Input CGST A/c Dr (8%)

    16,000

 

Input SGST A/c  Dr (8%)

    16,000

 

              To Creditors A/c

 

2,32,000

2

Debtors A/c Dr

3,48,000

 

             To Sales A/c

 

3,00,000

             To Output CGST A/c (8%)

 

24,000

             To Output SGST A/c (8%)

 

24,000

3

Chartered Accountant fees A/c                  Dr

10,000

 

Input CGST A/c  Dr

800

 

Input SGST A/c  Dr

800

 

             To Bank A/c

 

11,600

4

Asset A/c                  Dr

20,000

 

Input CGST A/c               Dr

1,600

 

Input SGST A/c               Dr

1,600

 

             To Asset Bought Account A/c

 

23,200

 

Total Input CGST=16,000+800+1600= 18,400
Total Input SGST=16,000+800+1600= 18,400
Total output CGST=24,000
Total output SGST=24,000
Therefore Net CGST payable=24,000-18,400=5,600
Net SGST payable=24,000-18,400=5,600

5

Output CGST A/c Dr

24,000

 

Output SGST A/c Dr

24,000

 

          To Input CGST A/c

 

18,400

          To Input SGST A/c

 

18,400

          To Electronic Cash Ledger A/c

 

11,200

 

The Input Tax Credit gives option to adjust all credit for both goods and services which was not available earlier.  If there had been any input tax credit left it would have been carried forward to the next month.

Example of Inter-state (i.e from one state to another) GST Rate 16%

  1. Mr. X purchased goods Rs. 2,00,000 from outside the State
  2. He sold Rs. 1,50,000 locally
  3. He sold Rs. 1,50,000 outside the state
  4. He paid Mobile Bills Rs. 10,000
  5. He purchased an Office Asset for his office for Rs. 20,000 (locallyPurhcase)

Assuming CGST @8% and SGST@8%

1

Purchase A/c Dr

2,00,000

 

Input IGST A/c Dr

32,000

 

           To Creditors A/c

 

2,32,000

2

Debtors A/c Dr

1,74,000

 

             To Sales A/c

 

1,50,000

             To Output CGST A/c

 

12,000

             To Output SGST A/c

 

12,000

3

Debtors A/c Dr

1,74,000

 

             To Sales A/c

 

1,50,000

             To Output IGST A/c

 

24,000

4

Mobile Expenses A/c ..…Dr

10,000

 

Input CGST A/cDr

800

 

Input SGST A/c Dr

800

 

             To Bank A/c

 

11,600

5

Office Asset A/c     Dr

20,000

 

Input CGST A/c Dr

1600

 

Input SGST A/c Dr

1600

 

             To ABC Furniture Shop A/c

 

23,200

 

Total CGST input =800+1600=2,400
Total CGST output =12,000
Total SGST input =800+1600=2,400
Total SGST output =12,000

Total IGST input =32,000
Total IGST output =16,000

Particulars

CGST

SGST

IGST

Output liability

12,000

12,000

16,000

Less: Input tax credit

     

   CGST

     

   SGST

 

4,000

 

   IGST

12,000

2,400

16,000

Amount payable

NIL

5,600

NIL

 

Any IGST credit will first be applied IGST and then CGST. Balance if any will be applied to set off SGST.

So out of total input IGST of Rs. 24,000, firstly it will be completely setoff against IGST. Then balance Rs. 8, 000 against CGST.

From the total Rs. 40, 000 only Rs. 13, 280 is payable.

So the setoff entries will be-

 

Setoff against CGST output

 

 

1.

Output CGST                Dr

12000

 

 

        To Input IGST     A/c

 

12, 000

 

Setoff against SGST output

 

 

2.

Output SGST A/c Dr

6,400

 

 

        To Input SGST     A/c

 

2,400

 

        To Input IGST     A/c

 

4,000

3.

Setoff against IGST output

 

 

 

Output IGST                Dr

16, 000

 

 

        To Input IGST     A/c

 

16, 000

4.

Final Payment

 

 

 

Output SGST                Dr

5, 600

 

 

        To Electronic Cash Ledger A/c

 

5, 600

Records and Register to be maintained

Records and Register to be Maintained

Details information to be kept

Goods Produced Register

Details of goods manufactured in a factory or production house or any other place

Purchase Register

All the purchases made within for manufacturing of goods or provision of services during a particular period

Sales Register

All the sales made be maintained during a particular period

Stock Register

Stock of inventory available at any given point of time so to track period wise stock movements

Input Tax Credit Availed

Register should maintain the details of Input Tax Credit availed

Output Tax Liability 

Register should maintain the details of GST liability outstanding

Output Tax Paid

This register should maintain the details of GST paid for a particular tax period

 

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    I hope by reading this article you got enlighten on ,How to pass Accounting and Journal entries under GST and Register to be Maintained (Goods and Service Tax)further to mention before taken any financial decision based on this content it is prefered to take an expert opinion as matter can be subjective.