Reversal ITC in books

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mahesh chitpur

nothing

45 Points Posted on 03 March 2021

I have reversed ITC in books because wrong uploading of Invoice. i.e., B2B shown in B2C or not shown in GSTR - 1 by my suppliers.
Now have reversed ITC in my books by passing accounting entry.

Creditor a/ c dr 50
To ITC Receivable A/c 50

Being Input Tac Credit reversed due to wrong uploading of invoice/ non uploading of invoice by supplier in GSTR- 1

Now I want recover GST amount paid by me on Purchase as Supplier failed to upload invoice.

Now recovery of gst amount from supplier is my income or not.

Please, guide me with Detailed accounting entries in books.

Thanks in advance

Replies (3)

Quick Summary

This discussion covers the reversal of Input Tax Credit (ITC) in accounting records when invoices are uploaded incorrectly by suppliers. It provides step-by-step accounting entries to reverse the ITC and then recover the GST amount paid on purchases from the supplier. The advice clarifies that recovering this GST is not considered income but an asset, representing the recovery of an overpayment.

Yugandhar

82 Points Posted on 03 March 2021

Example

Taxable value - 100

GST - 18

Total paid - 118

Entry1: due entry

Dr.Purchases 100

Dr.GST receivable 18

Cr.Creditor 118

Entry 2: payment

Dr.Creditor 118

Cr.Cash/Bank 118

Entry 3: entry of GST portion recoverable/reversal of GST receivable

Dr.Creditor 18

Cr.GST receivalbe 18

After all these entries, you are left with Creditor having a debit balance of 18 which is recoverable as extra payment

One cannot make profit out of himself. You are receiving what you have actually paid. It is not your income, It is your asset. You are recovering the extra payment.

Entry4: Recovery Entry

Dr.Cash 18

Cr.Creditor 18

mahesh chitpur

nothing

45 Points Posted on 04 March 2021

But instead of receiving ITC from suppliers, can I write off the gst Receivable to p& l a/c
by passing accounting entry as under
p& l a/c dr 18
To Gst ITC Receivable 18
as I don't want to recover money from my suppliers