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Sandeep Khandelwal (Partner)     19 August 2017

Accounting entry for scrap battery received during a sale

Dear Experts !!

I need help with accounting entries in GST in general. I buy battery, for example, "A1" for Rs 5000 + 28%

Then I sell this battery "A1" for Rs 5800 + 28% .

I give a discount of Rs 1500 to Customer on returning me old battery. Effectively I get Rs 5924 in hand and I have a scrap item valued at Rs 1500 in stock, which I often used to sell for cash and ignore accounting for that.

These entries were fine until now, but in GST I want to make it truly accoutable.

I want to sell battery scrap under tax invoice only. So GST on Battery scrap is 18%.

So my problem effectively is:

I buy battery at 28% GST for Rs 6400 (all inclusive) and sell for Rs 5800+28% - 1500=5924
When I sell this scrap I need to raise a bill again for Rs 1700 + 18% GST 

So should I create a seperate ledger in my books and while recording a sales transaction in tally for such a situation? (Right now, I only treat it as a discount entry)

Can I make a discount of scrab battery before adding the GST, so the implication of GST is less?

I have many issues with this scenario. I will revise my query once I am able to convince some of you experts on my concerns. Thank you all in advance.

 



 2 Replies

Sushant Garg

Sushant Garg (Service)     04 May 2018

The question is 8 months old. I am sure you must have made necessary changes by now.

Rebate of Scrap battery is actually a purchase made by you and will be treated as Purchase from unregistered person.

Discount can be given on invoice after charging GST, not before (GST Valuation rules apply).

Since it is a purchase you need to do self-invoicing i.e create a purchase entry in Tally.

We have been following this since VAT regime.

Mohammad Tarique Raza

Mohammad Tarique Raza   17 August 2021

hello, Mr Sandeep khandelwal if you get your answer please tell me i am also facing the same problem


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