Urgent-gst treatment and presentation in trading account

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This query is : Resolved

Ritesh (Querist)

05 September 2018 Kindly clarify which treatment is Correct.
1. In Trading Account (example) Gross Purchase Less Input GST Credit = Net Purchase.1,12,000-12,000= 1,00,000/-
Gross Sales Less Output GST paid = Net Sales. 1,50,000-20,000=1,30,000/-
And GST Payable Say Rs.8,000/-s shown in the balance Sheet

2. In Trading Account : Purchase (Net of GST) =1,00,000/-
Sales(Net of GST)= 1,30,000/-
GST payable Rs.8,000/- Shown as liability in Balance Sheet.

My Query is; In Trading Account is it mandatory to Show Purchase and Sale inclusive of GST and then deduct it for Net Purchase and Sale.
OR
Can we show Net purchase and Net Sales (exclusive of GST) directly in Trading Account.
GST Receivable or payable is a balance sheet item
.I am concerned with Presentation in Trading Account. Which method is correct and to be followed to comply with the provision of I-Tax for Tax Audit.
Experts,Thanks in Advance
Please suggest me .

RAJA P M

RAJA P M (Expert)

06 September 2018 *Where are you get Purchase and Sales account including Tax (GST)...? No more different accounting for trading business... You can account Basic Values to PandL account and Taxes in BS even if it's Payable or Receivable...

RAJA P M

RAJA P M (Expert)

06 September 2018 For Gross Sales (including Tax) will be shown if the account filing u/s 44ad only... Otherwise no need to show taxes in Trading/PandL Account.

Ritesh

Ritesh (Querist)

06 September 2018 Thanks Sir.
So I can Follow the 2nd method i.e. .....
In Trading Account can I Show the Value of Taxable of Purchase and Sales excluding GST?
Sir kindly explain with an illustration.
Thank again sir for quick response.
Best Regards

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