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C H A P T E R

Accounting of Goods 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]