Recording of transactions for purchase of Goods charging indirect taxes like GST/VAT in the Books of Account with Journal Entry

When Goods are purchased charging indirect taxes like GST/VAT on immediate Cash Payment i.e Cash Purchase of Goods charging indirect taxes like GST/VAT.

Debit Accounts : 

  • Purchases Account

  • GST Account.

Credit Account - Cash Account.

Journal Entry :

Journal Entry for Purchase of goods charging indirect tax like VAT/GST

Ledger Posting :

In Cash Ledger/Cash Book.

Cash purchase of Goods charging VAT/GST - Posting in Cash Leger/Cash Book.

In Purchases Ledger.

Cash Purchase of Goods charging VAT/GST - Posting in Purchases Ledger.

In GST Ledger.

Cash Purchase of Goods charging VAT/GST - Posting in VAT/GST Ledger.

Recording in Purchase Register.

Cash purchase of Goods charging VAT/GST - Recording in Purchase Register.

Example :

In the books of M/s. Shine Furniture,Bhubaneswar, Odisha, Goods purchased from M/s.King Plastic,Mumbai, GSTIN-27ABKFM8135M1Z0 for ₹1,98,280/-(Taxable Value ₹1,68,033.90, IGST ₹30,246.10) as per Cash Memo No. 1790 dt.11/08/2021.

Journal Entry :

Journal Entry for Purchase of Goods charging indirect Tax like GST/VAT

Ledger Posting :

In Cash Ledger/Cash Book.

Purchase of Goods in Cash - Posting in Cash Account/Cash Book

In Purchases Ledger.

Purchase of Goods in Cash - Posting in Purchases Ledger
In IGST Ledger.

Purchase of Goods on Cash - Posting in IGST Ledger.

Recording in Purchase Register.

Cash purchase of Goods - Entry in Purchase Register

When Goods are purchased charging indirect taxes like GST/VAT on immediate Payment through Bank Account i.e Cash Purchase of Goods charging indirect taxes like GST/VAT(Payment through Bank Account).

Debit Accounts : 

  • Purchases Account

  • GST Account.

Credit Account - Bank Account.

Journal Entry :

Cash purchase of Goods - Payment through Bank Account.

Ledger Posting :

In Bank Account/Bank Ledger.

Cash Purchase of Goods(payment through Bank Account) - Posting in Bank Ledger.
In Purchases Account/Purchases Ledger.

Cash purchase of Goods(payment through Bank Account) - Posting in Purchases Account/Purchases Ledger.

In GST Ledger.

Cash purchase of Goods(payment through Bank Account) - Posting in GST Ledger.

Recording in Purchase Register.

Purchase of Goods charging GST/VAT - Recording in Purchase Register.

Example :

In the books of M/s. Shine Furniture,Bhubaneswar, Odisha, Goods purchased from M/s.King Plastic,Mumbai, GSTIN-27ABKFM8135M1Z0 for ₹2,70,550/-(Taxable Value ₹2,29,279.66, IGST ₹41,270.34) as per Cash Memo No.1820 dt.17/08/2021 paid by RTGS from Bank of India Current A/c No.20001562345.

Journal Entry :

Journal Entry for purchase of Goods through Bank payment.

Ledger Posting :

In Bank Account/Bank Ledger.

Cash purchase of Goods through Bank payment - Posting in Bank Ledger.

In Purchases Account/Purchases Ledger.

Cash purchase of Goods through Bank payment - Posting in Purchases Ledger.

In IGST Ledger.

Cash purchase of Goods through Bank payment - Posting in IGST Ledger.

Recording in Purchase Register.

Cash purchase of Goods payment through Bank Account charging GST - recording in Purchase Register.

When Goods are purchased charging indirect taxes like GST/VAT on Credit i.e Credit Purchase of Goods charging indirect taxes like GST/VAT.

Debit Accounts : 

  • Purchases Account

  • GST Account.

Credit Account - Supplier/Sundry Creditor/Vendor Account

Journal Entry :

Journal Entry for Credit purchase of Goods charging GST/VAT.

Ledger Posting :

In Sundry Creditors Ledger.

Credit purchase of Goods - Posting in Sundry Creditors Ledger.

In Purchases Ledger.

Credit purchase of Goods - Posting in Purchases Ledger.

In GST Ledger.

Credit purchase of Goods - Posting in GST Ledger.

Recording in Purchase Register.

Credit purchase of Goods charging GST/VAT - Entry in Purchase Register.

Example :

In the books of M/s. Shine Furniture,Bhubaneswar, Odisha, Goods purchased from M/s.King Plastic,Mumbai, GSTIN-27ABKFM8135M1Z0 for ₹3,90,635/-(Taxable Value ₹3,31,046.61, IGST ₹59,588.39) as per Invoice No.1930 dt.05/09/2021

Debit Accounts : 

  • Purchases Account

  • IGST Account.

Credit Account -M/s. King Plastic, Mumbai

Journal Entry :

Journal Entry for Credit purchase of Goods charging GST.

Ledger Posting :

In M/s.King Plastic,Mumbai Ledger(Supplier/Creditor/Vendor).

Credit purchase of Goods charging GST - posting in Sundry Creditors Ledger.

In Purchases Account/Purchases Ledger.

Credit purchase of Goods charging GST - posting in Purchases Ledger

In IGST Ledger Account.

Credit purchase of Goods charging GST - posting in IGST Ledger.

Recording in Purchase Register.

Credit purchase of Goods charging GST - Recording in Purchase Register.

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Location: Cuttack, Odisha, India

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