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CHAPTER             Accounting of Goods
                      CHAPTER

                         12               and Services Tax (GST)






                     Accounting Entries

                      A.  Journal entries of transactions on which GST is Paid and Allowed as Input GST:
                       S.No.   Transaction and Explanation                Journal Entry
                       1.   Purchase of Goods            (a)  For intra-state Purchase
                           Explanation: Input Credit for GST Paid       Purchases A/c                ...Dr
                            is allowed.                     Input CGST A/c                           ...Dr.
                                                            Input SGST A/c                           ...Dr.
                                                               To  Cash/Bank A/c             [Cash Purchase]
                                                               To  Creditor’s A/c           [Credit Purchase]
                                                         (b)  For inter-state Purchase
                                                            Purchases A/c                            ...Dr.
                                                            Input IGST A/c                           ...Dr.
                                                               To  Cash/Bank A/c             [Cash Purchase]
                                                               To  Creditor’s A/c           [Credit Purchase]
                        2.   Purchase of Asset           (a)  For intra-state Purchase
                           Explanation: Input Credit for GST Paid      Asset A/c                     ...Dr.
                            is allowed (except on Vehicles purchased      Input CGST A/c             ...Dr.
                            by Non-transport Enterprises)        Input SGST A/c                      ...Dr.
                                                               To  Cash/Bank A/c           [Against Payment]
                                                               To  Vendor’s A/c             [Credit Purchase]
                                                         (b)  For inter-state Purchase
                                                            Asset A/c                                ...Dr.
                                                            Input IGST A/c                           ...Dr.
                                                               To  Cash/Bank A/c           [Against Payment]
                                                               To  Vendor’s A/c             [Credit Purchase]
                        3.   Rent Paid for Business Premises      Rent A/c                           ...Dr.
                           Explanation: Input Credit for GST Paid is      Input CGST A/c             ...Dr.
                            allowed. Both CGST and SGST are levied at       Input SGST A/c           ...Dr.
                            half the prescribed rate of GST each.         To  Cash/Bank A/c       [If paid]
                                                               To  Rent Payable A/c             [If payable]
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