Accounting treatment for Input GST

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This discussion clarifies the accounting treatment for input GST paid when there's no future output GST liability, such as with zero-rated supplies. If a refund is expected, the input GST should be shown as a receivable on the balance sheet's asset side, rather than being expensed in the Profit & Loss account.

PARVATHY R

PARVATHY R (Querist)
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05 May 2022 What is the accounting treatment for input GST we have paid?
Will it be shown in P/L a/c or in the asset side of Balance sheet? (Note: there is no output GST liability)

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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05 May 2022 Show in P/L in case of no out put GST liability for ever.
In case of future GST liability show it in the asset side of balance sheet.

PARVATHY R

PARVATHY R (Querist)
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06 May 2022 Yes sir. Thank you. There is no output GST liability forever as it is a zero rated supply.
But sir, I have a doubt that the input GST we have paid is an expense and also it is an income (Refund) yet to be received. So, is it to be shown in P/L a/c and also in Balance sheet asset side as receivables?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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06 May 2022 In case of refund yet to be received show it in balance sheet receivable.
No need to take it to p/l in such a case.

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PARVATHY R

PARVATHY R (Querist)
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10 May 2022 Thank you very much sir

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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10 May 2022 You are welcome...........

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