dear experts,
what should be the
Accounting treatment plus gst applicability on buyback of old battery along with sale of new battery from and to a gov organization ?
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Accounting treatment plus gst applicability on buyback of old battery along with sale of new battery
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| This is a common scenario in auto parts / UPS / inverter businesses. Here is the treatment: 1. GST Treatment — Two Separate Transactions: The sale of new battery and buyback of old battery should be treated as two independent supplies: a) Sale of New Battery: Issue a GST Tax Invoice for full value of new battery + GST at applicable rate (28% for lead-acid batteries, HSN 8507). b) Purchase of Old Battery (Buyback): Issue a Purchase Voucher / self-invoice for old battery at agreed price. No GST is charged if purchasing from an unregistered individual (GST on used goods under margin scheme may apply for dealers). If purchasing from a registered dealer, they should issue an invoice. 2. Exchange/Netting is NOT Permitted in GST: You cannot net off the old battery value against new battery price and show only the difference as the taxable value. Full value of new battery must be the taxable value on the sales invoice. 3. Accounting Entries: Sale of New Battery: Dr. Cash/Debtor Rs. XXXX (full price + GST) Cr. Sales A/c Rs. XXXX Cr. GST Output Rs. XXXX Buyback of Old Battery: Dr. Old Battery / Scrap Stock A/c Rs. YYYY Cr. Cash/Creditor / Customer A/c Rs. YYYY 4. On Sale of Scrap/Old Battery: When the accumulated old batteries are sold to scrap dealers, GST applies on sale of used goods. HSN 8548 (waste & scrap of batteries) — GST rate is 18%. 5. ITC on Old Battery Purchase: ITC is not available on purchase from unregistered persons under normal course unless operating under specific margin scheme. |
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