ACCOUNTING PROCEDURE

In case of Int ra- sta te sup ply of goods and ser vic es (i.e.
, sale s wit hin the same sta te).
(i) i Fo r Pu rch ase of goo ds :
Pur cha ses Ale ... Dr.
. Inp ut CG ST Ale ... Dr.
I Inp ut SG ST Ale ... Dr.
I To Ban k/C red itor s Ale
(Goods Pur cha sed )
(ii ) For Pu rch ase Re tur ns :
Cre dito rs Ale
... Dr.
To Pur cha se Re tur ns Ale
To Inp ut CG ST Ale
To Inp ut SG ST Ale
1
(Pu rch ase Ret urn s)
1 In case of pur cha se ret urn s, Inp ut CGST Ne and Inp
ut SGST Nc s
' are cre dite d bec aus e at the tim e of pur cha se Inp
I
1
ut CGST Ne and
In ut SG ST A/cs we re deb ited .
 ill For Sale of g()l();(U :
BankiDebtor'= _-\;c ..Dr .
To Sal es _.!l.,. e
To 0-.: :nu t CGST A.'c
~
I n Q-_.. µut
SGST A c
S:,_ j

1, Por Sak s Ret urn s :

SaleS Rc:ur.:i~ A e
(}c.:-pm CGS7 .!J.Jc .Dr.
Out:put s.GS1 A c .Dr
To Deh :urs A c. .Dr
S.,-:i Zr f':£ ~_£

IL ease o~· sa..:es retmn.3. Ou tpm

CGST .-\.! c and Ou tpJ t SG ST A/c
are: d~t e:3 '::,ec a:1. x at the ~€ - oi
s
--:al ~ Cr.n:p,1_! f"GST A c and
)--.:;. : ~ ~ • SG ST
1
..\ ~ "-H f: cre dne d
v Fo r Pur cha se of F'i:red A.s.u-t.. :
fix ed -~S< e~ .-\. C
Inp u: CG S1 -~ C Dr
lnp m SG S. .-\. c Dr
To Bar.1;. A c Or
P,_;._. ~;., . ·: 5:x~ £._~ _;;

\7 1 Fo r Ineo m.e <for exa mple commi

~o n rec ehred 1
Bank A :
To C G~ ~ i " : l &:-<leT\""ed .~ c Dr
To Ou:-o:.: f'GST A c
To 0-..:=.µ-..1: ~GST A c
k..eawe ~- ec .
\ n.i For Exp ens es :
~~.-\.~
lnp:..1 CGST A c Dr
lnp m SG S'T .-\ c Dr
To B,,,-l.:A. c Dr
~~ ..=._,_,-::_-:-c:e
nii For goo ds u-iJhdrcucn b, the Pro
pri nor for person.al rue :
Dr a~ ~ A :
To Pc :-'- ::~ A t'. ..Dr
To :.:.r;;.;.: CGS'T A c
To 1=.~·.::: SG~-:- A c
Go:cs -~';-~-:_ :2 ; . t . ~ "'EE
:.x Fo r goods gi N!n as free sam ple s,
Zou· of goocu b:P fire or
goods s:tc> le n :
A.:,E:::~c=-,:-:.: .-\ c
~ Gy F:__t:: .~ ~ Dr
~ by -::-.'.:.s:: A ;: Dr
T~ ?-.r,·-::~
.-\..e
Dr
To :.:.;...:.: CG 5T A c
Tc, c.=.:.: SG~ -:- A c
G- ~ - ___:__:::;:_:. :,,, :~~ ,=, -:;,'es
~ e:.:...e= E..J gr...oas -:: :~ ~
..:: !'c: --:. - ..., ,.._..., - L-l:-._"- -- ~- ~ ,.._ rry
-- _,..... - r - •
~
~
- : F - 5G.S:' :-~ r~

X For p aym ent of G.ST :

0-~:~!:.t CG S-1 A.: Dr
0--::;.n:. S-C-s-=- A ~ Dr
: ~ ~ _.!..:., C
B.'"'' r,-"= ~: ~ - ·: 0--:;,=;. c;., . 1.E;.!'.r- ~ t · t- w£- Gu.er-..!t.£!1t
 JOUR.i~ AL ENTRIE S OF G.S.T.
- - - -- - - - - - - - - - - - - · - 58

Intra-State i.e., withi n State

Illustr ation 1
Enter the following transactions in the books of assuming that all transactions
have taken place
in the state of Rajasthan . Assume CGST @9% and SGST@ 9%:
2018
Feb. 5 Purchased goods for 7,00,000 from Rama Traders , at 20% Trade discoun
t.
10 Sold goods to Pushka r Bros. for t 5,20,000 .
15 Receive d from Pushka r Bros. a cheque for f 3,00,000 on account. Cheque
is sent to bank.
18 Purchased furniture for t 80,000 and payment made by cheque.
20 Paid for adverti sement t 30,000 by cheque.
22 Sold goods for 1,00,000 r and received a cheque for the same. Cheque is sent
to bank.
25 Received commission t 20,000.
Solution 1

JOURNAL ENTRIES
Date Particulars L.F. Amoun t Amoun t
Dr. Cr.
2018 t
Feb. 5 Purchases Ale .. .Dr. 5,60,000
Input CGST Ale ...Dr. 50,400
I
Input SGST Ale
To Chauhan Traders
.. .Dr. 50,400
6,60,800
I (Purcha se of goods for f 7,00,000 at 20% trade di_aco _ t>_ _ _=--
_ un
Feb. 10 1 Pushka r Bros. ...Dr. 6,13,600
To Sales Ale 5,20.000
To Out put CGST Ale 46,800
To Output SGST Ale 46,800
(Sale of goods on credit'._
) _ _ _ _ _ _ __ _ __ ~
I
Feb. 15 Bank Ale 1
...Dr. 3,00,000
To Pushka r Bros. 3,00,000
I (Received payment by cheque)
Feb. 18 Furniture Ale .. .Dr. 80,000
Input CGST Ale ...Dr. 7,200
Input SGST Ale ...Dr. 7,200
To BankA/c 94,400
(Furnitu re purchased)
Feb. 20 Advertisement Exp. Ale ...Dr. 30,000
Input CGST Ale .. .Dr. 2,700
Input SGST Ale ...Dr. 2.700
To Bank Ale 35,400
(Payment of advertisement expenses )
I
Feb. 22 Bank Ale ...Dr. 1,18,000
1,00.000
I To Sales Ale 9,000
To Output CGST Ale 9,000
To Output SGST Ale
(Sold Goods and received a cheque)
Feb. 25 I Cash Ale .. .Dr. 23,600
. 20 .000
To Commission Received Ale
1,800
To Output CGST Ale 1,800
To Output _Sq.BT Ale
(Receive d ComID1ss1on)
1

Feb. 28 Output CGST Ale ... Dr. 57,600

... Dr. 57,600
Output SGST Ale T A/ (S e Working Note) 57 .600
To Input CGS e e 5i .600
To Input SGS1' Ai
d is.lance of input GST carried)
(Adjustment of GST an
Grand Total 19,61,000 19,61,000
 FINANCIAL ACCOUNTING
60
Working Note :
Total Input CGST t 50,400 + t 7,200 + t 2,700 = f 60,300
Total Input SGST t 50,400 + t 7,200 + f 2,700 = f 6D,300
Total Output CGST f 46,800 + f 9,000 + f 1,800 = f 57 ,6-0D
Total Output SGST f 46,800 + f 9,000 + f 1,800 = f 57,600
Since Input GST is more than output GST. there is □o taX liabil.Jty to be paid to the
GO¥emmem. uces.; of lnpm GST
is called lnpul Tax Credit. It will be earned forward and will be adjusted ill the next
year.
Input Tax Credit : Input CGST - Output CGST =f 60,300 - f 57 ,600 =f 2,700
Input SGST - Output SGS'f = f 60 ,300 - f 57 ,600 = f 2,700
Input Tax Credit off 2,700 + f 2,700 = f 5,400 will be carried forward and
will be adju.:,-te<l in
the next period.
Illustr ation 2
Pass entries in the books of Kamal Bros., assuming all transac tions have
been entered within th:
state of Haryan a, charging CGST and SGST @ 6% each :
2018 I

April 1 Purcha sed goods for f 3,00,000 from S. Chand ra.

6 1 Sold goods for f 5,00,000 to Aditya Gupta.
8 Return ed goods to S. Chand ra f 20,000.
15 Aditya Gupta returne d goods for '( 16,000.
18 Paid for printin g and station ery'( 10,000.
24 Goods withdra wn by Proprie tor for person al use f 30.000 .
27 Goods destroyed by fire f 20,000 .
27 Payme nt made of balance amoun t of GST.
Solution
JOURNAL OF KAMAL BROS.
Date Particuwrs L.F .4.mou.n.t .4/r.ffJ.:;;;
Dr. c. .
2018
'( f
April 1 Purcha ses Ale
.. .Dr. 3.00.000
Input CGST Ale
.. .Dr. 18.000
Input SGST Ale
.. .Dr. 18.000
To S. Chandr a .., _,..
<).,}0. - ~-
.-..-.,
(Purcha sed goods on credit)
6 Aditya Gupta
.. .Dr 5.60.0l'Xl
To Sales Ale 5.L'C,0(•}
To Output CGST Ne
30.0CU
To Output SGST .Ve 30,((.Z
(Sale of goods on credit )
8 S. Chandr a
To Purcha se Return s Air .Dr. .2:? -~'-'\)
:?l)~X
To Input CGST Ale :_)I_\
To Input SGST Ale 1_"l\.:"'l
!Purchase n>turns l
15 Sales Return s
Output CGST Ne .D:- 16...ct'tl
Output SGST Alc
. To Ad1t~ .1 Gupta
lS.~t~~ r~turn~ 1
~
Dr. ~·
~

: ; ?!l

18 Prinltn!I & Stat.Jonen, A..f~

Input CGST AA: .Dr h _\.'t'
· · l

Input SC8T A'c Dr c1.'--

Dr 2..."\ ..... -' ) )-
Tu (',11.-b Ak ~

111111d for pnntlng ' rnd 1 'l.t llln1' I"\ I

:,,.
-;-
l~.lITlt'O f,' .!""t:Lrtl I.} ~~ :::\ ::- ~
 ,JOURNAL ENTRIES OF G.8 T.
61
Brough t Forwnrd 9.47 ,G20
2-1 Drnwmgs Ale 9-47 .520
To Purchases Ale . .Dr. 33.600
To Input CGST Ale 30 ,000
To Input SGST Ale 1,800
tGood:,. withdrawn for personal use) 1.800
- - ----
27 Loss bY Fire Ale
To Purcb ases Ale .. .Dr 22.400
To Input CGST Ale 20,000
To Input SGST Ale J ,200
lLoss b~· fire of goods ) J,200

30 Output CGST Ale .. .Dr.

Output SGST Ale 29,040
.. .Dr. 29.040
To Input CGST Ale
To Input SGST Ale 14,400
To Bank Ale lr 14,640 + r 14,640 ) 14.400
lAdjustmen t of GST and payment of balance amount) 29 .280

Working _1\-ote :
Grand Total 7 10,61 ,600 10.61 600
Total Input CGST 18,000 - 1,200 + 600 - 1,200 - 1,800 = 14,400
Total Input SGST 18,000 - 1,200 + 600 - 1,200 - 1,800 = 14,400
Total Output CGST 30,000 - 960 = 29,040
Total Outpu t SGST 30,000 - 960 = 29,040
Net CGST Paid 29,040 - 14,400 = 14,640
Net SGST Paid : 29,040 - 14,400 = f 14,640
Illustrati on 3
Pass entries in the books of Rama & Co. assuming that all transactio ns have been entered within
Delhi and assuming CGST @6% and SGST @ 6%.
2018
Jan. 2 Purch ased goods for f 1,00,000 on credit.
5 Sold Goods for ~ 1,60,000 on credit.
10 Purchased Computer Printer for office for f 30,000 and payment made by cheque.
20 Paid legal consultati on fee f 5,000.
22 Paid rent 't 10,000 by cheque.
31 Payment made of balance amount of GST.
Solution
JOURNA L OF RAMA & CO.
Date Particular s l L.F ' Amount Amount

2018
Jan. 2 Purch ases Ale
Input CGST Ale
- - - ---------
+
.. .Dr. I
... Dr.
Dr.
1,00,000
6,000
t
Cr.

Input SGSi Ale ... Dr. 6 ,000

To Creditors Ale 1,12,000
(Purchase of goods on credit )
Jan. 5 Debtors N e .. .Dr. \ 1.79,200 I
Tu Sales Ale l ,60,000
To Out put CGST Ale 9,600
To Out put SGST Ale 9,600
(Sale of goods on credit)
Jan. 10 Office Equipmen t
Ale ... Dr. 30,000
Input CGST Ne ... Dr I 1,800 I

Input SGST Ale ... Dr l ,ROO

Tu Bank.Ne 33 ,600
,_CPurchased Computer Printer ) I
C arrii~ Eorwani 3..,24~ 00 ii'"i ~aoo
 l
62 FINANCIAL ACCOUNT ING ---
- 3,24,800 3,24,80()
Brought Forwa rd 5,000
.. .Dr.
Jan~ 01 Legal Fees Ne .. .Dr. 300
Input CGST Ne ... Dr. 300
I Input SGST Ne 5,600
To Cash Ne
(Paid legal consultation fees)
- -- ... Dr. 10,000
Jan . 22 Rent Ne ... Dr. 600
Input CGST Ne ... Dr. 600
Input SGST Ne 11,200
To Bank Ne
(Paid Rent)
Jan. 31 '-output CGST Ne (Working Note ) ... Dr. 9,600
... Dr. 9,600
Output SGST Ne
To Input CGST Ne 8,700
To Input SGST Ne 8,700
To Bank Ne ( f 900 + f 900 ) 1,800
(Adjustment of GST and payment of balance amount)
f--
Grand Total 3 ,60.800 3 ,60,800
'

Working Note :
Total Input CGST f 6,000 + f 1,800 + f 300 + f 600 = f 8,700
Total Input SGST f 6,000 + f 1,800 + f 300 + f 600 = f 8,700
Total Output CGST = f 9,600
Total Output SGST = f 9,600
Net CGST Paid f 9,600 - f 8,700 = f 900
Net SGST Paid f 9,600 - f 8,700 = f 900

( Inter-Stat e i.e., from one St~te to anothe~

Illustrati on 4
Pass entries in the books of Rama & Co . assuming CGST @ 6% and SGST @ 6% :
(i ) Rama & Co. purchased goods for 'f 2,50,000 from outside the State and made payment by
cheque.
(ii ) He sold goods for f 2,00,000 outside the State on Credit.
(iii ) He sold goods for f 1,80,000 locally on credit.
( iv ) Paid telephone bill for f 5,000 by cheque.
(v ) He purchased an air conditione r for his office for f 25,000 and paid the amount by cheque.
Payment made of balance amount of GST.
Solution JOURNAL OF RAMA & CO.
Date Particulars L.F. Amount Amount
Dr. Cr.
Purchaees Ale t
fo y l.11 IGBT N e• ...Dr. 2,50,000
'fo Bank Ale
... Dr. 30,000
'y ;rchaAf~i good~ from outside the state) 2,80,000
f ~M,1fn, N r;
"fo k1, L,;# Ale .. .Dr. 2,24,000
J,, f t rJtJJUt JGRT N e 2,00,000
:~"" ,J w/ A>. r1t.11.A,Ai: t.h,, st-au.:J 24,000
,·~ •,/111/ >. J.,J ,, ...Dr.
·; ", -;,-..,.,.~ /;/t: 2,01 ,600
'!.,, r I tty ,t, r '/ ,WJ' Air: 1,,80,000
'1.1, 1 7-r-111 Jt t -,J i ,.,.f Ak 10,800
'I'•,,. ,I ,r/✓/'A ';;;1J,Jfl f;tiJ.< Kt,47 1,o;
1 10,800

Curriud F orward 7,05 ,600 7,05,600_

 -- -
JOURNAL ENTRIES OF G.S .T. 63
------- -
-
1----- .,,.... Brought Forwa rd 7.05 .600 7,05 ,600
(iv) 1Telephone Exp. Ne ... Dr. 5,000
Input CGST Ne .. .Dr. 300
Input SGST Ne .. .Dr. 300
To Bank Ne 5,600
(Payment of t.elephone bill )
(v ) Office Equipment Ne - --- .. Dr
25 ,000 I

Input CGST Ne ... Dr. 1,500 I

Input SGST Ne ...Dr. 1,500
To Bank Ne 28,000
(Purchase of air-conditioner for office)
(vi ) Output IGST Ne (Note 1) ... Dr. 24,000
To Input IGST Ne 24,000
(Adjustment of IGST)
(vii ) Output CGST Ne (Note 2) ...Dr. 10,800 I
To Input CGST Ne 1,800
To Input IGST Ne 6 ,000
To Bank Ne 3 ,000
(Adjustment of CGST and payment of balance amount)
(viii) Output SGST Ne (Note 3) ... Dr. 10,800
To Input SGST Ne 1,800
To Bank Ne 9,000
(Adjustment of SGST and payment of balance amount)
Grand Total f 7,84,800 7,84,800
* If CGST is 6% and SGST is 6%, IGST will be 6% + 6% = 12%
** Important Note : If nothing is mentioned, it will be assumed that the transaction is entered within
the same state.
Working Notes:
(1 ) First of all, Output IGST will be adjusted against Input IGST : f
Input IGST 30,000
Less : Output IGST 24,000
IGST Credit 6,000
(2) This balance of 6,000 f of IGST Credit will be first applied to set off CGST and the
balance, if an_y, will be applied to set off SGST.
'Total Output CGST 10,800
Less : Adjusted against Input CGST (f 300 + f 1,500) 1,800
9 ,000
Less : Adjusted against IGST Credit (- ) 6,000
Balance paid off 3,000
(3) 'Total Output SGST 10,800
Less: Adjusted against Input SGST (f 300 + f 1,500) (- ) 1,800
Balance paid off 9.000

QUESTIONS
1. Pass entries in the books of Mohan Bros. of Patana assuming CGST @ 6% and SGST @ 6% :
2018
March 5 Purchased goods for f 2,50,000 from Arjun Yadav of Lucknow.
March 12 Sold goods costing f 60,000 at 50% profit to Pratap Sinha of Ranchi (Jharkhand).
March 14 Purchased goods for f 70,000 from Ram Nath a local dealer against ch eque .
March 18
Sold gooo.s within the state Costing 'f 2,25,000 at 33 ½%
profit less trade discount 10()1<>
against cheque which was deposited into bank.
March 20 Paid rent f 25,000 by cheque.
March 31 Payment made of balance amount of GST.
 6% and
Pu.ss cntri0R 1n th<' books of a ll pa rties 1n the follow ing cases assurm ng CGST
@
2.
SGST (a 6 Cr

20 18
l and
Mahes h Ch011dra of Agra purch ased goods for f 2,00,0 00 from S unil Sharm a of Bhopa
!\-1a rch l
sold the same to Deepa k Patna ik of Odish a for f 3,00,0 00.
~1arcb 5 Dee pa k Patna ik so]d goods locally t o Moha n for f 3,60,0 00.
March l O Moha n sold goods to C h a kra varti of West Benga l for f 5,00,0 00.
of 40% on cost .
March 14 Chakr avarti sold goods costin g f 5 ,00,00 0 to Sanja y a local dealer at a profit
cases :
3. Pass entrie s in t h e books of Krish nan of Berig aluru (Karn ataka) in the follow ing
I Purch ased goods from Karun akar an of Chenn ai for f 1,00,0 00.
dGST @ 18%)
II Sold goods to Ganes han of Benga luru for f 1,50,0 00.
(CGST @ 6% and SGST @ 6%)
III Sold goods to S. Nair of Keral a for f 2,60,0 00.
(IGST @ 18%)
IV · Purch ased a Motor -bike for f 80,000 from Bajaj Ltd. again st chequ e.
tCGST @ 9% and SGST @ 9%)
V Paid rent f 30,000 by chequ e.
(CGST @ 6o/o and SGST @ 6%)
V1 Purch ased goods from Ram Moha n Rai of Benga luru for t 2,00,0 00.
tCGST @ 6 o/c and SGST @ 6%)
V1I Paid insura nce p remiu m f 10,000 by chequ e.
<CGST @ 9% and SGST @ 9%)

Vl ll Receiv ed comm ission f 20,000 by chequ e w hich ia depos ited into bank.
1CGST @ 9<fo and SGST @ 9%)
IX Paym ent made of balanc e amoun t of GST,