Accounting for reverse charge under gst

Accounts 836 views 5 replies

We are aware that Reverse Charge is payable by a registered taxable person for Goods or Services received from an Un-Registered person.

This Reverse charge when paid for will be made available as Input GST.

This Un-registered purchase of Goods or Services can be from a Local ( Intra State ) party or Central party ( Inter State ).

While creating Reverse Charge liability , should we credit the respective Output GST A/c - i.e When Local - SGST Output & CGST Output ; When Central - IGST Output and debit a Reverse Charge Recoverable A/c.?

This Reverse Charge Recoverable A/c can be then credited when Input is made available.

Will the Input that is made available against payment made towards Reverse Charge be credited into respective Input GST A/c by the GSTN - i.e SGST Input , CGST Input or IGST Input. ?

 

Replies (5)

Please debit ITC and create Reverse charge liability. ITC will be adjusted agst Output Tax liability in normal course.

 

Read the article accounting under GST reverse charge (RCM)

Pls read the reply by Pulkit Sharma.The accounting is not as simple as stated by you.

Pulkit Ji thanks for sharing ur insight.

But how do u think GSTN portal will allow us to populate Input credit to respective accounts ( SGST, CGST , OR IGST ) against Reverse  Charge paid

I have read the article. In essence accounting is same. I have not given entries but concept remains same. There is no difference. 


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