Notice received GST

Dear Sir,

we have received notice from GST department demand Rs.88000 fake gst drive. we purchase Goods from supplier Rs.3310000 dt.19.08.2021 payment dome on same day. but supplier not filed 3B and Close business after 1 month. we deposit Rs. 88000 by Cash ledger so please suggest entry in books of account
Replies (5)
Quick Summary
This discussion addresses how to account for a fake GST demand notice of Rs. 88,000. The user purchased goods from a supplier who subsequently failed to file their GST returns and closed their business. The Rs. 88,000 was paid via the cash ledger, and the user seeks advice on the correct accounting entry and whether it's treated as a penalty. It's suggested that the amount can be adjusted with the capital account, but it's better practice to show it as disallowed under Income Tax.

Is this treated as penalty...??

Then :

Dr. GST Demand A/c - XXXXX
Cr. Bank A/c - XXXXX
(give suitable Narration for the demand and reason).

**The said amount disallowed under Income Tax...
Sir,

so can we adjust with Capital account

Yes, You can account and forward the amount to Capital Account. But, Better practice show the value as disallowed..

Thank you Raja Sir,
You are welcome...

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