GST OUT PUT AND INPUT

GST ACCOUNTING ENTRY IS CORRECT OR NOT I AM ASKING

                        OUT PUT GST A/C DR 10000

                                    TO BANK                          10000

ON PAYMENT OF THE GOODS PURCHASED FROM SELLOR BY THE BUYER

                         ON SALE OF THE GOODS

                                       BANK A/ C DR      12000

                               IN PUT GST A/ C DR                    12000

               PAY INOUT TAX CREDIT TO THE GOVERNMENT OF INDIA

                           INPUT TAX CREDIT A/C DR 2000

                                    TO BANK                            2000

 

Replies (4)
Quick Summary
This discussion clarifies the correct accounting entries for GST output and input tax. It addresses common mistakes in recording purchases and sales, explaining that Input Tax Credit is not a balance sheet item but a reduction against output tax liability. The correct method involves offsetting input tax against output tax to determine the net amount payable to the government.

 Let's analyze the given accounting entries:

*Entry 1: Payment of Goods Purchased* Debit: GST A/c ₹10,000 Credit: Bank A/c ₹10,000 This entry seems incorrect.

When a buyer purchases goods, they would typically debit the Purchase A/c (or Inventory A/c) and credit the Bank A/c.

The GST input tax credit would be claimed separately.

*Entry 2: Payment of Goods Sold* Debit: Bank A/c ₹12,000 Credit: GST A/c ₹12,000

This entry also seems incorrect. When a seller sells goods, they would typically debit the Bank A/c and credit the Sales A/c.

The GST output tax liability would be accounted for separately.

 *Entry 3: Payment of Input Tax Credit to the Government* Debit: Input Tax Credit A/c ₹2,000 Credit: Bank A/c ₹2,000 This entry seems incorrect.

When a taxpayer pays input tax credit to the government, they would typically debit the Bank A/c and credit the Input Tax Credit A/c.

Corrected Accounting Entries: 1. *Purchase of Goods* Debit: Purchase A/c (or Inventory A/c) ₹10,000 Credit: Bank A/c ₹10,000 Debit: Input Tax Credit A/c ₹2,000 (assuming 20% GST rate) Credit: GST A/c ₹2,000 1.

*Sale of Goods* Debit: Bank A/c ₹12,000 Credit: Sales A/c ₹12,000 Debit: GST A/c ₹2,400 (assuming 20% GST rate) Credit: Output Tax Liability A/c ₹2,400

 1. *Payment of GST Liability* Debit: Output Tax Liability A/c ₹2,400 Credit: Bank A/c ₹2,400 .

 Let's analyze the given accounting entries:

*Entry 1: Payment of Goods Purchased* Debit: GST A/c ₹10,000 Credit: Bank A/c ₹10,000 This entry seems incorrect.

When a buyer purchases goods, they would typically debit the Purchase A/c (or Inventory A/c) and credit the Bank A/c.

The GST input tax credit would be claimed separately.

*Entry 2: Payment of Goods Sold* Debit: Bank A/c ₹12,000 Credit: GST A/c ₹12,000

This entry also seems incorrect. When a seller sells goods, they would typically debit the Bank A/c and credit the Sales A/c.

The GST output tax liability would be accounted for separately.

 *Entry 3: Payment of Input Tax Credit to the Government* Debit: Input Tax Credit A/c ₹2,000 Credit: Bank A/c ₹2,000 This entry seems incorrect.

When a taxpayer pays input tax credit to the government, they would typically debit the Bank A/c and credit the Input Tax Credit A/c.

Corrected Accounting Entries: 1. *Purchase of Goods* Debit: Purchase A/c (or Inventory A/c) ₹10,000 Credit: Bank A/c ₹10,000 Debit: Input Tax Credit A/c ₹2,000 (assuming 20% GST rate) Credit: GST A/c ₹2,000 1.

*Sale of Goods* Debit: Bank A/c ₹12,000 Credit: Sales A/c ₹12,000 Debit: GST A/c ₹2,400 (assuming 20% GST rate) Credit: Output Tax Liability A/c ₹2,400

 1. *Payment of GST Liability* Debit: Output Tax Liability A/c ₹2,400 Credit: Bank A/c ₹2,400 .

WHAT YOU TOLD IS COMPLETELY WRONG PLEASE CHECK IT

                                      POINTS ABOUT YOUR ANALYSIS

  (1)   INPUT TAX CREDIT IS NOT IN THE DEBIT SIDE IT SHOULD BE ONLY IN THE CREDIT SIDE OF THE BALANCE SHEET

2) GST DEBIT AND GST CREDIT ENTRY IS WITH THE BALANCE AMOUNT OF 400 ONLY

THAT MEANS GST DEBIT - GST CREDIT  = 

THIS AMOUNT SHOULD PAID TO GOVERNMENT OF INDIA

3) OUTPUT TAX LIABILITY SHIULD BE - (MINUSED BY THE ) INPUT TAX CREDIT THAT SHOULD SAME AS GST PAY MENT IS 

SO WE SHOULD PAY TO THE GOVERNMENT OF INDIA IS ONLY 400 NOT 2400

 WHAT SIR THIS IS RIGHT AS FOR YOUR ANALYSIS 

 

FINALLY  OUTPUT TAX LIABILITY SHOULD BE MINUSED BY THE INPUT TAX CREDIT AND THEN ONLY PAY TO GOVT

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