3/28/24, 12:24 PM Accounting Entries under GST - TaxAdda

(https://taxadda.com/) Services  Calculator  Blog Login  Search on TaxAdda 


Accounting Entries under GST
 Author - Rohit Pithisaria  Last Updated - May 8, 2018

Confused in complicated laws? Take our GST consultation services to get your issues

solved from GST experts. Click here to know more. (https://taxadda.com/gst-
Rohit Pithisaria
 consultation/)
I am a Indian Tax Expert based in
Jaipur (Rajasthan). Started TaxAdda in
2011 as a tax blog and now providing all
types services related to GST and
Income Tax to the client all over India.
Accounting Entries By Businesses Other Than Those You can connect with us 82396-85690.

Registered Under Composition Scheme

The Accounts to be maintained by a normal dealer are
Table of Contents 
Input CGST A/c

Input SGST A/c

Accounting Entries
Input IGST A/c by Businesses other than
1.
those Registered under
Output CGST A/c (https://taxadda.com/gst-
Composition Scheme
Output SGST A/c return-service)
Accounting Entries by
2.
Output IGST A/c Composition Dealer

GST Payable Accounting Entries for

3. Transactions under Reverse
The person who is registered in Union Territory has to pay and thus maintain UTGST account in
Charge
lieu of SGST account. So for the entries and examples given below such persons has to simply
replace UTGST with SGST.
Subscribe
You can easily calculate GST amount using our GST Calculator We will send updates relating to GST
only
(https://taxadda.com/calculators/gst-calculator).
(No spam, you can unsubscribe anytime)

Intra State Sales (Sales within same state or union territory)

Name
Purchase by X from Z who is in same state for Rs. 8,000 and GST rate of 18% (CGST@9% &
Email
SGST@9%)Purchase A/c Dr 8,000
Input CGST A/c Dr 720  Get Updates

Input SGST A/c Dr 720

To Z A/c 9440

Sales by X to Y who is in same state for Rs. 25,000

Y A/c Dr 29,500
To Sales A/c 25,000
To Output CGST A/c 2,250
To Output SGST A/c 2,250

He paid consultation fees to CA of rs. 5,000

Consultation Fees A/c Dr 5,000
Input CGST A/c Dr 450
Input SGST A/c Dr 450
To CA A/c 5,900

Purchased furniture worth Rs. 3,000

Furniture A/c Dr 3,000
Input CGST A/c Dr 270
Input SGST A/c Dr 270
To Cash A/c 3,540
Total Inputs and Output taxes

Input CGST = 720 + 450 + 270 = 1,440

Input SGST = 720 + 450 + 270 = 1,440
Output CGST = 2,250
Output SGST = 2,250

Privacy - Terms

https://taxadda.com/gst-accounting-entries/ 1/4
3/28/24, 12:24 PM Accounting Entries under GST - TaxAdda

On month end for GST Payable

Output CGST A/c Dr 2,250
Output SGST A/c Dr 2,250
To Input CGST A/c 1,440


To Input SGST A/c 1,440
To GST Payable A/c 1,620
 Please note that there are some rules and restrictions on input tax credit
(https://taxadda.com/gst-input-tax-credit/) and above entries will be made only for those

purchases on which ITC is allowed. For eg- GST paid on purchase of motor car is not allowed
 except for certain persons. For a person to whom ITC is not allowed, accounting entry will be
Car A/c Dr 5,00,000
To Bank A/c 5,00,000

You can easily calculate the ITC admissible between IGST, CGST and SGST and GST payable
using our GST ITC and Payment Calculator (https://taxadda.com/calculators/gst-payment-
input-tax-credit-calculator)

Inter State Sales (Sales outside state or union territory)

Purchase by X from Z who is in different state for Rs. 8,000 and GST rate of 18% (CGST@9%
& SGST@9%)
Purchase A/c Dr 8,000
Input IGST A/c Dr 1,440
(https://taxadda.com/gst-
To Z A/c 9,440
return-service)
Sales by X to Y who is in different state for Rs. 25,000
Y A/c Dr 29,500
To Sales A/c 25,000
To Output IGST A/c 4,500

He paid consultation fees to CA of rs. 5,000

Consultation Fees A/c Dr 5,000
Input CGST A/c Dr 450
Input SGST A/c Dr 450
To CA A/c 5,900

Sales by X to B who is in same state for Rs. 30,000

Y A/c Dr 35,400
To Sales A/c 30,000
To Output CGST A/c 2,700
To Output SGST A/c 2,700
Total Inputs and Output taxes

Input CGST = 450

Input SGST = 450
Input IGST = 1,440
Output CGST = 2,700
Output SGST = 2,700
Output IGST = 4,500

On month end for GST Payable

Output CGST A/c Dr 2,700
Output SGST A/c Dr 2,700
Output IGST A/c Dr 4,500
To Input CGST A/c 450
To Input SGST A/c 450
T0 Input IGST A/c 1,440
To GST Payable A/c 7,560
Please note that there are some rules and restrictions on input tax credit and above entries will
be made only for those purchases on which ITC is allowed.

You can easily calculate the ITC admissible between IGST, CGST and SGST and GST payable
using our GST ITC and Payment Calculator (https://taxadda.com/calculators/gst-payment-
input-tax-credit-calculator)

Impact on Profit and Loss Account and Balance Sheet

https://taxadda.com/gst-accounting-entries/ 2/4
3/28/24, 12:24 PM Accounting Entries under GST - TaxAdda

All tax accounts are not in the nature of direct/indirect incomes or expenses, therefore there will
be no impact on the Profit and Loss account. However if there is any GST paid for which input
tax credit is not allowed then it should be booked as expense and thus reducing the profit. (In
case payment is for an expense)


The tax liability or positive input tax credit is to be shown as liability or asset in the balance


sheet. Fixed assets on which input tax credit is allowed and taken are to be shown as cost
excluding gst.

Use TaxAdda Online Billing Software to create GST invoices easily. (https://taxadda.com/billing-

software/)

Accounting Entries By Composition Dealer

Persons registered under composition scheme (https://taxadda.com/gst-composition-
scheme/) are not allowed to take input tax credit of tax paid and also not to charge gst from
the customer. They also can not make inter state sales.

Therefore they are not required to maintain accounts for input and output gst. They have to
make very simple entries as follows

On sale of goods
Cash A/c Dr 5,000
To Sale A/c 5,000 (https://taxadda.com/gst-
return-service)
On Purchase of goods
Purchase A/c Dr 4,000
To Cash A/c 4,000

On purchase of Capital asset

Furniture A/c Dr 1,500
To Cash A/c 1,500

On payment of Composition Fees

Composition Fees A/c Dr 25
To Bank A/c 25
Impact on Profit and Loss Account and Balance Sheet

Composition fees is an expense and thus show as indirect expense in profit and loss account.
There will be no impact on the Balance Sheet. All capital assets are shown at Cost including
GST.

GAAP is applicable mandatorily on GST. So, all principles following revenue recognition etc. will
be applicable.

Accounting Entries For Transactions Under Reverse

Charge
At time of purchasing such goods/ services:

Purchase A/c Dr
Input SGST A/c Dr
Input CGST Ac Dr
To Creditor A/c
To Output SGST RCM A/c
To Output CGST RCM A/c

In case of purchase of asset or expense, specific account will be debited. Output SGST RCM A/c
is used in place of normal Output SGST A/c to differentiate both taxes as taxes under RCM can
not be adjusted against input taxes and has to be paid in cash.

At time of payment of gst

Output SGST RCM A/c

Output CGST RCM A/c
To Cash/Bank A/c

https://taxadda.com/gst-accounting-entries/ 3/4
3/28/24, 12:24 PM Accounting Entries under GST - TaxAdda

Know more about Reverse Charge Mechanism (https://taxadda.com/gst-reverse-charge-

mechanism/)

Confused about complicated laws? Take our GST consultation services to get your
issues solved from GST experts. Click here to know more. (https://taxadda.com/gst-

consultation/)


Read More Articles



 Section 44ADA – Presumptive Registration Under GST

Taxation Scheme for Professionals
(https://taxadda.com/presumptive-
taxation-scheme-professionals-
section-44ada/)
From financial year 2016-17, a new Section 44ADA is
introduced for presumptive income for professionals.
This section is similar to section 44AD for traders.
Under this section professionals such as legal,
medical, engineering, architect, accountancy,
technical consultancy, interior decoration or any
(https://taxadda.com/gst-
registration/)
Topic Covered in this Article Persons required to
register compulsorily Documents Required for
Registration Fees for Registration Voluntary
Registration Time Limit for Registration Effective Date
of Registration Requirements for Registration Can a
person take more than one GSTIN Things that

READ ARTICLE » (HTTPS://TAXADDA.COM/PRESUMPTIVE- READ ARTICLE » (HTTPS://TAXADDA.COM/GST-

TAXATION-SCHEME-PROFESSIONALS-SECTION-44ADA/) REGISTRATION/)

Rohit Pithisaria | 19/09/2023 Rohit Pithisaria | 19/09/2023

Refund of Unutilised Input Tax Credit GST on Import (https://taxadda.com/gst-

for Zero-Rated Supplies
(https://taxadda.com/refund-of-
unutilised-input-tax-credit-for-
zero-rated-supplies/)
What is Input Tax Credit under GST? Input Tax Credit
(ITC) means claiming the credit of the GST paid on
the purchase of goods and services which are used
for the furtherance of the business. ITC is a
mechanism to
(https://taxadda.com/gst-on- return-service)
import/)
Article 269A of constitution mandates that import of
goods or services in India is considered as Inter-
state trade. Therefore, import of goods or services is
considered as interstate supply and is liable for
payment of IGST. IGST on the import

READ ARTICLE » (HTTPS://TAXADDA.COM/REFUND-OF-

UNUTILISED-INPUT-TAX-CREDIT-FOR-ZERO-RATED- READ ARTICLE » (HTTPS://TAXADDA.COM/GST-ON-

SUPPLIES/) IMPORT/)

Rohit Pithisaria | 19/09/2023 Rohit Pithisaria | 19/09/2023

ABOUT TAXADDA REGISTERED OFFICE OTHER LINK

TaxAdda Janki Vihar Apartment, A-102, About (https://www.taxadda.com/about-

started in Shiv Marg, Near Satellite Hospital, Bani Us us-taxadda/)
2011 by Park, Jaipur, Rajasthan 302016
(https://www.taxadda.com/taxadda-
Rohit Email - support@taxadda.com Blog
gst-income-tax-guides/)
Pithisaria Call &
and WhatsApp
(https://wa.me/+918239685690)
currently - 82396-
providing 85690
all types of
services (https://taxadda.com/about-
related to us-taxadda/)
Income
Tax, GST,
Accounting
to clients
all over
India. Click
here to
know
more.

© 2024 TaxAdda All rights reserved

https://taxadda.com/gst-accounting-entries/ 4/4