GST Entries by KIRAN SONAR

 how to pass accounting entries under GST

 Goods and service tax or GST will be one tax to subsume all taxes. It will bring in “One nation one tax” regime.
While there will be certain initial transition challenges, GST will bring in much clarity in many areas of business. One of the areas is accounting and bookkeeping. Read on to find out about accounting entries under GST.
Current scenario:
Separate accounts have to be maintained for excise, VAT, CST and service tax. Here’s a list of the few accounts currently any business has to maintain (apart from accounts like purchase, sales, stock) –
• Excise payable a/c (for manufacturers)
• CENVAT credit a/c (for manufacturers)
• Output VAT a/c
• Input VAT a/c
• Input Service tax a/c
• Output Service tax a/c
For example, a trader Mr. X must maintain the minimum basic accounts –
• Output VAT a/c
• Input VAT a/c
• CST A/c (for inter-state sales and purchases)
• Service tax a/c [He will not be able to claim any service tax input credit as he is a trader with output VAT. Service tax cannot be setoff against VAT/ CST]
GST Regime
Under GST all these taxes (excise, VAT, service tax) will get subsumed into one account.
The same trader X has to then maintain the following a/cs (apart from accounts like purchase, sales, stock) –
• Input CGST a/c
• Output CGST a/c
• Input SGST a/c
• Output SGST a/c
• Input IGST a/c
• Output IGST a/c
• Electronic Cash Ledger (to be maintained on Government GST portal to pay GST)
For a list of accounts to be maintained please read here.
While the number of accounts is more apparently, once you go through the accounting you will find it is much easier for record keeping. One of the biggest advantages X will have is that he can setoff his input tax on service with his output tax on sale.
Accounting entries under GST
 How to pass accounting entries in GST
Let us consider a few basic business transactions (all amounts excluding GST)-

Example 1: Intra-state
1. Mr. X purchased goods Rs. 1,00,000 locally (intrastate)
2. He sold them for Rs. 1,50,000 in the same state
3. He paid legal consultation fees Rs. 5,000
4. He purchased furniture for his office for Rs. 12,000
Assuming CGST @8% and SGST@8%
The entries will be-

1 Purchase A/c ………………Dr. 1,00,000
Input CGST A/c ……………Dr.     8,000
Input SGST A/c ………    …Dr.     8,000
              To Creditors A/c 1,16,000

2 Debtors A/c ………………Dr. 1,74,000
             To Sales A/c 1,50,000
             To Output CGST A/c 12,000
             To Output SGST A/c 12,000

3 Legal fees A/c ………..……Dr. 5,000
Input CGST A/c ……………Dr. 400
Input SGST A/c ……………Dr. 400
             To Bank A/c 5,800

4 Furniture A/c ………..……Dr. 12,000
Input CGST A/c ……………Dr. 960
Input SGST A/c ……………Dr. 960
             To ABC Furniture Shop A/c 13,920

Total Input CGST=8,000+400+960= Rs. 9,360
Total Input SGST=8,000+400+960= Rs. 9,360
Total output CGST=12,000
Total output SGST=12,000
Therefore Net CGST payable=12,000-9,360=2,640
Net SGST payable=12,000-9,360=2,640

5 Output CGST A/c ……………Dr. 12,000
Output SGST A/c ……………Dr. 12,000
          To Input CGST A/c 9,360
            To Input SGST A/c 9,360
             To Electronic Cash Ledger A/c 5,280

Thus due to input tax credit, tax liability of Rs. 24,000 is reduced to only Rs.5,280. Also, GST on legal fees is also adjusted which was not possible in current tax regime.
If there had been any input tax credit left it would have been carried forward to the next year.

Example 2: Inter-state
1. Mr. X purchased goods Rs. 1,50,000 from outside the State
2. He sold Rs. 1,50,000 locally
3. He sold Rs.1,00,000 outside the state
4. He paid telephone bill Rs. 5,000
5. He purchased an air cooler for his office for Rs. 12,000 (locally)
Assuming CGST @8% and SGST@8%

1 Purchase A/c ………………Dr. 1,50,000
Input IGST A/c ……………Dr. 24,000
           To Creditors A/c 1,74,000

2 Debtors A/c ………………Dr. 1,74,000
             To Sales A/c 1,50,000
             To Output CGST A/c 12,000
             To Output SGST A/c 12,000

3 Debtors A/c ………………Dr. 1,16,000
             To Sales A/c 1,00,000
             To Output IGST A/c 16,000

4 Telephone Expenses A/c ..…Dr. 5,000
Input CGST A/c ………………..Dr. 400
Input SGST A/c …..……………Dr. 400
             To Bank A/c 5,800

5 Office Equipment A/c.…..Dr. 12,000
Input CGST A/c ……………Dr. 960
Input SGST A/c ……………Dr. 960
             To ABC Furniture Shop A/c 13,920

Total CGST input =400+960=1,360
Total CGST output =12,000
Total SGST input =400+960=1,360
Total SGST output =12,000
Total IGST input =24,000         
Total IGST output =16,000
Particulars               CGST SGST IGST
Output liability      12,000 12,000 16,000
Less: Input tax credit
   CGST                      1,360
   SGST                                 1,360
   IGST                      8,000                   16,000
Amount payable           2,640        10,640  NIL

Any IGST credit will first be applied to set off IGST and then CGST. Balance if any will be applied to setoff SGST.
So out of total input IGST of Rs. 24,000, firstly it will be completely setoff against IGST. Then balance Rs.8,000 against CGST.
From the total Rs.40,000, only Rs. 13,280 is payable.
So the setoff entries will be-
Setoff against CGST output

1 Output CGST ………………Dr. 9,360
           To Input CGST A/c 1,360
           To Input IGST A/c 8,000

2 Setoff against SGST output
Output SGST ………………Dr. 1,360
           To Input SGST A/c 1,360

3 Setoff against IGST output
Output IGST ………………Dr. 16,000
           To Input IGST A/c 16,000

4 Final payment
Output CGST A/c ……………Dr. 2,640
Output SGST A/c ……………Dr. 10,640
             To Electronic Cash Ledger A/c 13,280

testing

Accounting: It is an art of recording, classifying and summarizing in significant manner and in terms of money, transactions and events which are of financial character and interpreting the results thereof.

Business transaction: A business transaction is “The movement of money and money’s worth form one person to another”. Or exchange of values between two parties is also known as “Business Transaction”.

Purchase:        A purchase means goods purchased by a businessman from suppliers.

Sales:               Sales is goods sold by a businessman to his customers.

Create sale invoice and printing invoice

What is invoicing?
how to create sale invoice and step for printing invoice

➡ Creating sales invoice:
When a sales transaction is made, a document detailing the transaction (item name, tax, etc) has to be given to the buyer or debtor as proof of purchase by him. This document is called Invoice or Bill or Cash Memo. Tally.ERP 9 provides the option of creating Invoices.

Invoice mode is of two types.  It may be:

An Account Invoice

An Item Invoice

Account Invoice

Sales Account Invoice is generally used by professionals such as doctors and consultants who require to issue an invoice for certain services provided such as consultancy charges, professional fees, etc.

Trading and manufacturing organizations also use the Account Invoice for invoicing service charges.

On the Sales entry screen, click on Acct Invoice button, which is displayed on the Button Bar on the right-hand side of the screen to display the Sales Account Invoice screen as shown.

  Configuring sales & purchase Invoice in Tally ERP 9
Pass a Sales Account Invoice for Service provided to Debtor B:

Tally.ERP’s Account Invoice mode displays the list of ledger accounts, which can be invoiced as required. This is unlike Item Invoice where Tally.ERP 9 displays the list of stock items.

Configure sale & Purchase invoice in Tally ERP 9
Allow income accounts in sales vouchers in Tally ERP 9
VAT inclusive sale transaction
Item Invoice

Invoicing is generally used for sale of stock where the details of the items sold are listed. Selecting the Item Invoice allows you to select the stock items that need to be invoiced. Trading and manufacturing organizations commonly use this format.

On the Sales invoice screen, click on the button Item Invoice, which is displayed on the Button Bar on the right side of the screen and the Sales Item Invoice appears as shown below:

Pass a Sales Invoice against sale of Item A – 50 Nos. @ Rs. 15/= per quantity to Debtor C:

  Configuring sales & purchase Invoice in Tally ERP 9


Tally.ERP’s Item Invoice mode displays the list of stock items, which can be invoiced as required.

How to create sale entry in Tally ERP 9

Special Keys for Voucher Narration Field

ALT+R: Recalls the Last narration saved for the first ledger in the voucher, irrespective of the voucher type.

CTRL+R: Recalls the Last narration saved for a specific voucher type, irrespective of the ledger.


Printing of sales invoice:
       To print sales Invoice/voucher, press ALT+P or click on the button Print. You can configure the voucher type to print automatically after saving the voucher for which, the option Print after saving Voucher must be set to Yes.

     The buttons Pre-Printed and Quick Format toggle between Plain Paper and Neat Format respectively. These are print specifications that you set. Pre-printed is for pre-printed stationery. Quick Format does not give fonts or other niceties but is ideal for fast printing.
The Invoice Printing Configuration appears as shown.

Set the print options as desired. You can configure the invoice as per your requirement. The options depend on the various F11: Features and F12: Configure parameters, that have been set for your company and for the voucher either by you or by the administrator.

The printed Sales Invoice will appear as shown:

Write a short notes.

 Write a short notes.
1) Pure Inventory Vouchers: 

Through these vouchers stock movements are recorded. Consequently, stock is (and the respective account) affected by these transactions. Normally these comprise the following activities.

Sale and Purchase-

a) Receipt of Material and preparation of Receipt Note b) Entry of Purchase Invoice
c) Linking of Purchase Invoice and Receipt Notes
d) Issue of Materials and Preparation of Delivery Notes
e) Preparation of Sales Invoice
f) Linking of Sales Invoice and Delivery Note.


Return and Rejections
a) Return of Rejected Goods, Preparation of Rejection Out Voucher
b) Entry of Debit Note
c) Linking of Debit Note and Rejection Out Voucher
d) Receipt Rejected Materials and Preparation of Rejection In Voucher
e) Entry of Credit Note
f) Linking of Credit Note and Rejection In Voucher

Stock Adjustments-

a) Adjustment for Stock Gain or Loss i.e. Shortage or Surplus of Stock
b) Inter Godown Transfer

     With, Inventory vouchers, both Stock and Accounts get affected. for Example When an item is sold, Stock gets reduced and various Ledger Accounts like Customer, Sales, Sales Tax, etc also get affected.
     In short, Pure Inventory vouchers perform the same function in the inventory system as accounting vouchers in the accounting system, i.e. they too, are means of entering transactions. In this case, the vouchers record the receipt and issue of goods/ stock, the transfer of stock between locations, and physical stock adjustments

     It you have chosen not to integrate accounts with inventory, inventory vouchers will not have any impact on the Balance Sheet stock figures. They will separately maintain the stock balances. However, you can configure Tally so that the inventory entries would automatically update the Balance Sheet stock figures. (By choosing to integrate Accounts and Inventory in (F11: Company Features). Remember, you can trace an entire transaction right from the goods transfer stage to the financial accounting of it, irrespective of integration status. For example, the purchase of stock can be tracked from the purchase voucher through to the receipt note through to the invoice from the supplier, and on through to the eventual payment.

2) inventory entry in voucher mode and invoice mode

Inventory Entry in Voucher Mode:

Inventory transactions can be entered through Voucher mode and Invoice mode. If the voucher mode is used the Ledger amount should be entered / first and then the corresponding item wise details should be entered. So, in voucher mode you enter the net amount of bill first at party account and then amount of each ledger account. In voucher mode you will not get readymade figure (Computed) of bill and Taxes etc.

Inventory Entry in invoice mode:

In invoice mode, first inventory details are entered. If you want to enter the transactions through invoice mode, first click on As Invoice button in button panel. You will get readymade figure (Computed) of tax and other charges and amount of bill. Normally sales transactions are always entered through invoice mode. When you see As voucher in button panel, it means that invoice mode is on. It is a toggle button. To give the effect of purchase and sales on inventory, set Yes at 

Inventoty Values are affected at the time of creating the accounts relating to inventory i.e. Purchase, Sales, Purchase return, Sales return, etc.

Q 1. Wha what is stock item. write the step item creation with diagram.
➡       Stock items are the actual items that are transacted i.e. received, issued or produced and it participates in inventory vouchers. Stock items are normally placed under stock groups or categories.
To create Stock item used following sequence or steps-

1) Gateway of Tally > Inventory Info menu > Stock item > Create under Single stock
item.

2) Stock item creation Window will appear on the screen

3) Name- Type the name of the stock item e.g. Ball pen, Stapler

4) Alias- Type alias name (If any)

5) Under select the Stock Group e.g. Stationery.

6) Units- Select the unit of measurement e.g. No

7) Opening balanceType the quantity of opening bal. with rate per unit.

8) Accept the screen by pressing Enter Key or Just press Y.

इडली ऑर्किड आणि मी !

इडली ऑर्किड आणि मी !

 

 

05/07/2016 Acc