Expenses Head 1231346546

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Discussion is about accounting treatment of tea and sugar purchased for office use. Clarification: such items should be booked as Staff Welfare/Office Expenses under indirect expenses with entry debiting expense and crediting cash/bank. ITC on such items is generally not allowed.

Aqeel Safdar

Aqeel Safdar (Querist)

06 August 2024 the purchaser bring Tea and sugar for office kitchen use for staff as well as directors tea.
what will be the journal entry under mention expenses head?

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)

13 August 2025 When tea, sugar, and similar items are purchased for office kitchen use (consumed by both staff and directors), it is treated as an office expense or staff welfare expense under accounting standards.
✅ Suggested Journal Entry:
Assuming the purchase is made in cash or through bank:
Staff Welfare Expenses A/c Dr. ₹[Amount]
To Cash/Bank A/c ₹[Amount]
✅ Explanation:
Staff Welfare Expenses (or Office Expenses) is the appropriate expense head, as these items are not for resale or capital in nature.
You can use either of the following expense heads depending on your chart of accounts:
Staff Welfare Expenses
Office Expenses
Administrative Expenses (less commonly)
🔍 Important Notes:
If you're using an ERP or Tally-like system, use the pre-defined group "Indirect Expenses" and create a ledger under it (e.g., Tea & Refreshments, Pantry Expenses).
This expense is not disallowed under Income Tax unless it is excessive or clearly for personal use.
No input GST can be claimed on food & beverages as per Section 17(5) of CGST Act, unless part of an outward taxable supply (e.g., catering business).
Example Entry (for ₹1,000):
Staff Welfare Expenses A/c Dr. ₹1,000
To Cash A/c ₹1,000

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