COTTON SEED PURCHASE FROM FARMERS FOR MANUFACTURING EXEMPT PRODUCT THEN RCM GST

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Chief Mgr.Account & finance
38 Points Posted on 29 December 2020

COTTON SEED PURCHASE FROM FARMERS FOR MANUFACTURING EXEMPT PRODUCT THEN RCM GST IF ANY AND HOW TO TREAT ACCOUNTING ENTRY WITH TAX IF ANY.

 

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On 29 December 2020 at 17:02 Report
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This discussion clarifies the Goods and Services Tax (GST) implications when purchasing cotton seeds from farmers for manufacturing exempt final products. It explains the Reverse Charge Mechanism (RCM), where the manufacturer pays the GST, and outlines the correct accounting entries for these transactions, including the 5% GST applicable on cotton seed purchases.

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My grammar is 💯 good I
7306 Points Posted on 29 December 2020

Rcm as you know the farmer charges you his tax on you. Rcm charges are defined by tax act and the entry must be simply purchases entry with gst entry ie Purchases debit and, tax debit and bank or payables credit.

 

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On 29 December 2020 at 19:29
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Chief Mgr.Account & finance
38 Points Posted on 30 December 2020

COTTON SEED GST @ 5% ITEM PURCHASE FROM FARMERS FOR MANUFACTURING FINAL PRODUCT EXEMPT GOODS SO WE HAVE TO PAY GST BY IN ANY WAY.

 

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On 30 December 2020 at 10:22

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