Understand GST Billing &
Maintain and update books of accounts as per rules and regulation of GST
Goods and Service Tax Accounting
With GST subsuming a large number of indirect taxes and GST being a destination-based tax on consumption of goods or services, proper and appropriate accounting needs to be done. Also, every person registered under GST is required to maintain books of accounts for five years from the due date of filing an annual return for the relevant year. With GST subsuming a large number of indirect taxes and GST being a destination-based tax on consumption of goods or services, proper and appropriate accounting needs to be done.
Tax Ledgers to be maintained under GST :
- Input GST
- Output GST
- Input SGST
- Output SGST
- Input CGST
- Output CGST
- UTGST in lieu SGST (if entity is based in union territory)
Impact of GST on Profit & Loss Statement and Balance Sheet
GST being a tax component is neither an expense nor an income for the business. So, profit & loss statement is not affected by passing GST ledger. But, wherever input credit is not allowable, its added in the cost of purchase of goods or services reducing profit or escalating loss. In balance sheet input GST is shown under current asset and output GST under current liabilities. In the case of fixed assets, if input credit is allowed, value is shown a net of GST.
Composition dealer is barred from selling outside the state as well as from charging GST from customers. Hence, they are not required to maintain input & output ledger. Rather GST paid by them is included in the cost of goods & they pay at a fixed rate on supplies made.