GST Journal Entries for RCM & Input Tax Credit

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This discussion focuses on the correct accounting treatment for GST Reverse Charge Mechanism (RCM) entries, specifically how to claim input tax credit. The original poster sought clarification and illustrations for journal entries related to RCM liabilities and their subsequent input tax credit claims, as they were unsatisfied with a previous suggestion. The provided example details debiting GST ITC claimable RCM and crediting the bank, with specific line items for IGST, CGST, and SGST on reverse charges for both freight and professional fees.

R S Sai Kumar

R S Sai Kumar (Querist)
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15 October 2021 Would some one suggest me the method of passing journal entries - in relation to RCM, RCM is eligble for availment of input. Kindly give illustrations also. A known person suggested the entries, but I am not satisfied with the same. Hence posted in this forum

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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15 October 2021 Debit GST ITC claimable RCM
Credit bank.

Ram Avtar Singh

Ram Avtar Singh (Expert)
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16 October 2021 select Increased GST Liability option in your software
Input IGST 100
Input CGST 1400
Input CGST 1400

IGST on Reverse Charges (Freight) 100
CGST on Reverse Charges (Freight) 200
SGST on Reverse Charges (Freight) 200
CGST on Reverse Charges (Prof) 1200
SGST on Reverse Charges (Prof) 1200
Being amount of RCM Liability created

IGST on Reverse Charges (Freight) 100
CGST on Reverse Charges (Freight) 200
SGST on Reverse Charges (Freight) 200
CGST on Reverse Charges (Prof) 1200
SGST on Reverse Charges (Prof) 1200
Bank A/c 2900
Being amount Paid RCM

R S Sai Kumar

R S Sai Kumar (Querist)
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16 October 2021 I am very much thankful to you

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