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Gst adjustment in financial statement

27 September 2019

1. Is gst paid will show in financial statement of company under other expenses??
2. Is tds paid will show as an expense under other expenses of company???

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3 Replies

Gokul Nath (2 Points)
Replied 27 September 2019

For tds entry it's salary Dr tds payable credit so So tds will be a liability and it won't appear as expenses. But as outstanding tax payable and when u pay the book is closed. Gst paid is not out of our pocket since consumer will pay for it, we are just agent for them to pay to the government. So gst paid can't be shown as expenses

CA Prakash N (Head - Indirect Tax (GST & FTP)) (373 Points)
Replied 27 September 2019

GST will be collected from Customers & TDS would be deducted from vendors to remitt it to Govt/exchequer. This would be treated as Liability in the Balance Sheet. Once, it is paid, it will be adjusted against liability in the Balance sheet only.

Therefore, the question of expensing GST & TDS paid in books of accounts would not arise.

However, if you are paying any interest, late fee or penalty on account of delay in payment, delay in filing return, then such cost would be expensed in your book.

CA Prakash N (Head - Indirect Tax (GST & FTP)) (373 Points)
Replied 27 September 2019

GST will be collected from Customers & TDS would be deducted from vendors to remit it to Govt/exchequer. This would be treated as Liability in the Balance Sheet. Once, it is paid, it will be adjusted against liability in the Balance sheet only.

Therefore, the question of expensing GST & TDS paid in books of accounts would not arise.

However, if you are paying any interest, late fee or penalty on account of delay in payment, delay in filing return, then such cost would be expensed in your book.