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Journal Entries under GST

Jigar (B.Com) (153 Points)

18 June 2021

Purchase capital goods by paying Principal amount + CGST+SGST whose ITC is blocked under section 17 (5 ) what will be its general entry and under which voucher and in which group in Tally ERP 9???

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3 Replies

CMA Poornima Madhava (CMA) (13097 Points)
Replied 18 June 2021

There are 2 options:

Opt1 (preferred)

1) Make a purchase entry showing the break up of asset and tax (ensure to configure the asset under ineligible credit category)

2) Transfer the tax component to the asset account back (through Journal under statutory adjustment option)

Opt2: (not preferred)

1) Make a journal entry to record the total value of the capital asset (including tax)

Opt2 is not preferred because such entries would not form part of GST return summary in Tally

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CA Altamush Zafar (GST Consultant) (15907 Points)
Replied 18 June 2021

You will have to capitalize the tax amount with the asset. The tax amount will form part of value of asset. Depreciation will be claimed don the whole amount.

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