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Accounting of Goods and Services Tax (GST) 12.5

8. Goods Distributed as Samples (a) If the Goods were purchased intra-state
Explanation: Input Credit taken at the Advertisement/Sample/Sales Promotion Expenses A/c ...Dr.
time of purchase of goods is cancelled, i.e., To Purchases A/c
reversed. GST Paid (CGST and SGST or To Input CGST A/c
IGST) is reversed because the goods are To Input SGST A/c
consumed by the business.
(b) If the Goods were purchased inter-state
Advertisement/Sample/Sales Promotion Expenses A/c ...Dr.
To Purchases A/c
To Input IGST A/c

C. Journal entries of transactions on which GST is Charged and is Output GST:
GST charged is payable to the Government after set-off of Input GST. Thus, it is Output GST.

S.No. Transaction and Explanation Journal Entry
1. Sale of Goods and/or Services or Both (a) For intra-state Sale
Explanation: If intra-state transaction, Cash/Bank A/c ...Dr. [Cash Sale]
both CGST and SGST at half the prescribed Debtor’s A/c ...Dr. [Credit Sale]
rate of GST is levied. If inter-state To Sales A/c
transaction, IGST at the prescribed rate To Output CGST A/c
of GST is levied. To Output SGST A/c
(b) For inter-state Sale
Cash/Bank A/c ...Dr. [Cash Sale]
Debtor’s A/c ...Dr. [Credit Sale]
To Sales A/c
To Output IGST A/c

2. Rent Received on business premises Cash/Bank A/c ...Dr. [If Received]
Rent Receivable A/c ...Dr. [If Receivable]
To Rent Received A/c
To Output CGST A/c
To Output SGST A/c
3. Commission (Income) (a) For intra-state Commission (Income)
Cash/Bank A/c ...Dr. [If Received]
Commission Receivable A/c ...Dr. [If Receivable]
To Commission (Income) A/c
To Output CGST A/c
To Output SGST A/c
(b) For inter-state Commission (Income)
Cash/Bank A/c ...Dr. [If Received]
Commission Receivable A/c ...Dr. [If Receivable]
To Commission (Income) A/c
To Output IGST A/c