Deferred tax assets & GST on machine purchase

GST on machine purchase can comes under deferred tax assets catagory in Balance sheet?

Replies (4)
Quick Summary
This discussion clarifies that GST on machine purchases is not directly part of deferred tax assets. The actual cost of the machine, excluding GST, is used for depreciation and deferred tax calculations. Unutilised input tax credits can be shown as a balance with the revenue authority on the balance sheet and reversed in the following financial year.

No , GST charged is not part of deferred tax because when we purchased Machine , entry will be

Machine A/c Dr
CGST A/c Dr
SGST A/c Dr
To Trade Creditor A/c Cr
( purchase of Machine)

So we take actual cost of Machine in the Balance Sheet . Further the depreciation charged as per Companies act and Income tax act are on actual cost of Machine for calculation of deferred tax , so no involvement of GST amount in the cost of an asset .
Thank you for replying

Actually I wanted to know that the amount of GST on machine (capital asset) which is not able to claim in the one accounting year . How to show in the balance sheet.
You can show un utilise input tax credit in the Balance sheet and pass entry on 31st March as follows

CGST Balance with Revenue Authority A/c
Dr
SGST Balance with Revenue Authority A/c Dr
To Input CGST A/c Cr
To Input SGST A/c Cr
( Input tax credit transfer )

In the next F.Y on 1st April you can reverse above entry and utilise credit.
Thank you very much

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