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Accounting of Goods and Services Tax (GST) 12.3

10. Freight and Cartage (a) For intra-state
Explanation: Input Credit for GST Paid Freight and Cartage A/c ...Dr.
is allowed. Input CGST A/c ...Dr.
Input SGST A/c ...Dr.
To Cash/Bank A/c [If paid]
To Expenses Payable A/c [If payable]
(b) For inter-state
Freight and Cartage A/c ...Dr.
Input IGST A/c ...Dr.
To Cash/Bank A/c [If paid]
To Expenses Payable A/c [If payable]
B. Journal entries of transactions on which GST claimed as Input GST is Reversed (i.e., cancelled):

S.No. Transaction and Explanation Journal Entry
1. Purchases Return (a) For return of intra-state Credit Purchase
Explanation: Input Credit taken at the Creditor’s A/c ...Dr.
time of purchase of goods and/or To Purchases Return A/c
services or both is reversed because To Input CGST A/c
in effect purchases has reduced. To Input SGST A/c
(b) For return of intra-state Cash Purchase
Cash/Bank A/c ...Dr.
To Purchases Return A/c
To Input CGST A/c
To Input SGST A/c
(c) For return of inter-state Credit Purchase
Creditor’s A/c ...Dr.
To Purchases Return A/c
To Input IGST A/c
(d) For return of inter-state Cash Purchase
Cash/Bank A/c ...Dr.
To Purchases Return A/c
To Input IGST A/c
2. Cash Discount Received (a) If Goods and/or Services or Both were Purchased intra-state
Explanation: GST is levied on Taxable Creditor ...Dr.
Value which is after all discounts. To Cash A/c/Bank A/c
To Discount Received A/c [On amount of Cash Discount]
To Input CGST A/c
To Input SGST A/c
(b) If Goods and/or Services or Both were Purchased inter-state
Creditors ...Dr.
To Cash A/c/Bank A/c
To Discount Received A/c [On amount of Cash Discount]
To Input IGST A/c