Class XI
ACCOUNTANCY
Goods &
Service Tax
PRASHANT KIRAD
, PRASHANT KIRAD
Ch:20 ACCOUNTING OF GOODS & SERVICE TAX
GST Overview:
GST is a comprehensive indirect tax on the sale (supply) of goods and services
by a registered taxpayer. It has merged 17 indirect taxes into one. GST
operates as a destination-based Value Added Tax (VAT), which is charged to
the final consumer. The tax is applicable only on the incremental value.
Different GST rates include 0%, 5%, 12%, 18%, and 28%. It is not applicable to
petroleum products and alcohol.
GST was Started in India on (1st of July 2017) (CA Day)
Types of GST:
1. Central GST (CGST): 6%
2. State GST (SGST): 6%
th
Both CGST and SGST are charged on intra-state sales (within the
2
3. Integrated GST (IGST): 12% & 1
same state). Example: Pune in Mumbai (both in Maharashtra).
1 t h
Charged on inter-state sales (between different states). Example:
1
Mirzapur (Uttar Pradesh) to Pune In Maharashtra.
d
i r a
t K Exam mai aayega!
Input & Outputa n
GST: (EMA)
hGST collected by the seller on behalf of the government.
Outputas
PrGST: GST paid by the purchaser on the purchase of goods/services.
GST:
Input
Input GST is set off against output GST.
Accounting of Goods & Service Tax Notes:
In some cases, GST cannot be set off and will be debited to the expense
account, such as:
Repairs on buildings
Food & beverages expenses
Membership fees of clubs
Health insurance
Purchase of vehicles
Donations
Drawings
Reverse Charge: GST is paid by the purchaser to the government, not charged
by the seller. It is claimed by the purchaser as "Input GST".
ACCOUNTANCY
Goods &
Service Tax
PRASHANT KIRAD
, PRASHANT KIRAD
Ch:20 ACCOUNTING OF GOODS & SERVICE TAX
GST Overview:
GST is a comprehensive indirect tax on the sale (supply) of goods and services
by a registered taxpayer. It has merged 17 indirect taxes into one. GST
operates as a destination-based Value Added Tax (VAT), which is charged to
the final consumer. The tax is applicable only on the incremental value.
Different GST rates include 0%, 5%, 12%, 18%, and 28%. It is not applicable to
petroleum products and alcohol.
GST was Started in India on (1st of July 2017) (CA Day)
Types of GST:
1. Central GST (CGST): 6%
2. State GST (SGST): 6%
th
Both CGST and SGST are charged on intra-state sales (within the
2
3. Integrated GST (IGST): 12% & 1
same state). Example: Pune in Mumbai (both in Maharashtra).
1 t h
Charged on inter-state sales (between different states). Example:
1
Mirzapur (Uttar Pradesh) to Pune In Maharashtra.
d
i r a
t K Exam mai aayega!
Input & Outputa n
GST: (EMA)
hGST collected by the seller on behalf of the government.
Outputas
PrGST: GST paid by the purchaser on the purchase of goods/services.
GST:
Input
Input GST is set off against output GST.
Accounting of Goods & Service Tax Notes:
In some cases, GST cannot be set off and will be debited to the expense
account, such as:
Repairs on buildings
Food & beverages expenses
Membership fees of clubs
Health insurance
Purchase of vehicles
Donations
Drawings
Reverse Charge: GST is paid by the purchaser to the government, not charged
by the seller. It is claimed by the purchaser as "Input GST".
