CA Vaibhav Vashishtha

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 CA Vaibhav Vashishtha

TAXES
DIRECT TAX INDIRECT TAX
Final burden of which is Tax which is imposed
borne by the person on on one person but is
whom it is imposed. paid by another.
Burden cannot be Burden can be shifted
shifted to others. to others.
E.g. Income tax, E.g. GST, Custom duty
Corporate profit tax
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 CA Vaibhav Vashishtha

If you purchase an Iphone

Iphone 1,20,000
GST 30,000
Total 1,50,000

Cost ? 1,50,000 For us

1,20,000 For Businesses

30,000 ASSET
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 CA Vaibhav Vashishtha

BUSINESS
PURCHASE SALES
Purchases A/c Dr Bank/Debtors A/c Dr
Input GST A/c Dr To Sales A/c
To Bank/Creditors A/c To Output GST A/c

Asset Liability

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 CA Vaibhav Vashishtha

GST/SALES
INTRA STATE INTER STATE

50% - Central Government{CGST}

100% - Central Government{IGST}
50% - State Government{SGST}

Rajasthan Rajasthan

Rajasthan Maharashtra/UP

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 CA Vaibhav Vashishtha

INTRA STATE INTER STATE

50% - CGST
100% - IGST
50% - SGST

Purchase
Purchases A/c Dr
Purchases A/c Dr
Input CGST A/c Dr
Input IGST A/c Dr
Input SGST A/c Dr
To Bank/Creditors A/c To Bank/Creditors A/c

Sales
Bank/Debtors A/c Dr
Bank/Debtors A/c Dr
To Sales A/c To Sales A/c
To Output CGST A/c
To Output IGST A/c
To Output SGST A/c 6
 CA Vaibhav Vashishtha

BUSINESS
PURCHASE SALES
Purchases A/c Dr Bank/Debtors A/c Dr
Input GST A/c Dr To Sales A/c
To Bank/Creditors A/c To Output GST A/c

Asset Liability

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 CA Vaibhav Vashishtha

Fixed Assets
Fixed Assets A/c Dr
Input GST A/c Dr
To Bank A/c

Expenses
Expenses A/c Dr
Input GST A/c Dr
To Bank A/c

Income (Like Commission received)

Bank A/c Dr
To Commission received A/c
To Output GST A/c
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 CA Vaibhav Vashishtha

SALES Sales Return

Bank/Debtors A/c Dr Sales Return A/c Dr
To Sales A/c Output GST A/c Dr
To Output GST A/c To Bank/Creditors A/c

Output GST is reversed

PURCHASE Purchase Return

Purchases A/c Dr Creditors A/c Dr
Input GST A/c Dr To Purchase return A/c
To Bank/Creditors A/c To Input GST A/c

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Input GST is reversed
 CA Vaibhav Vashishtha

Input GST is reversed

Purchase Return
Drawings
Goods lost or stolen {Theft}
Goods destroyed
Goods distributed as Free samples
Goods given away as gift or charity
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 CA Vaibhav Vashishtha

Drawings
Drawings A/c Dr
To Purchases A/c
To Input GST A/c

Free samples, Loss of goods by Fire or Theft

Advertisement A/c {Free Samples} Dr
Loss by Fire A/c Dr
Loss by Theft A/c Dr
To Purchases A/c
To Input GST A/c

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 CA Vaibhav Vashishtha

Setting off
Output CGST A/c Dr
To Input CGST A/c
To Bank A/c
Output SGST A/c Dr
To Input SGST A/c
To Bank A/c

We can combine as well these 2 entries.

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 CA Vaibhav Vashishtha

Question {Homework}

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 CA Vaibhav Vashishtha

Exempt from GST

1. Payment of wages & salaries
2. Electricity & water bills
3. Educational services
4. Health services
5. Travelling expenses
6. Interest
7. Supply of services to government or to
embassies of other countries

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 CA Vaibhav Vashishtha

Point to Remember !

GST is calculated after deducting both Trade

discount and Cash discount.

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 CA Vaibhav Vashishtha

Question
 Record the transactions in books of Dhruv Tibrewal
& co, Jaipur assuming all transactions took place
within the state of Rajasthan, charging CGST &
SGST @6% each.
1) Bought goods of list price of 1,00,000 from Gopal
bros. after 20% trade discount & 5% cash discount
on cash price. 60% of the amount was paid
immediately by cheque.
2) Sold goods to Manoj & co of list price of 2,00,000
less 15% trade discount & 4% cash discount on sale
price and received 40% by cheque.
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 CA Vaibhav Vashishtha

Setting off – Adjustment of GST

1) Input IGST
2) Input CGST
3) Input SGST

 CGST & SGST cannot be setoff together.

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 CA Vaibhav Vashishtha

Question
Pass entries in books of Dhruv Ltd. Assuming CGST
@6% & SGST @6%.
1) Dhruv purchased goods for 1,50,000 from outside
the state & made payment by cheque.
2) He sold goods for 1 lakh outside state on credit.
3) He sold goods for 1,80,000 locally on credit.
4) Paid telephone bill for 5,000 by cheque.
5) Purchased an AC for office for 25,000 & paid
amount by cheque
6) Payment made of balance amount of GST.
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