Sales of Goods with charging indirect tax like GST/VAT(Books of Account with Journal Entry)

Let's come to discuss about the Accounting treatment for Sale of Goods with Journal Entry charging Indirect taxes like GST/VAT etc.

When Sale of Goods with charging Indirect Taxes like GST/VAT are made, one have to record/maintain the below mentioned Accounting Records.

Preparation of Sales Invoice/Bill/Cash Memo

Recording of Journal Entry into the Journal Register.

Posting of Corresponding Ledger Account from the Recorded Journal Entry.

Recording in Sales Register etc.

When Goods are sold with charging Indirect tax like GST/VAT on immediate Cash Receipt i.e Cash Sale of Goods.

Debit Account :

  • Cash Account

Credit Account :

  • Sales Account

  • GST Account

Journal Entry :

Journal Entry for Cash sale of Goods with charging GST/VAT.
Ledger Posting :

In Cash Ledger/Cash Book.

Cash sale of Goods with charging GST/VAT - Posting in Cash Ledger/Cash Book.

In Sales Ledger/Sales Account.

Cash sale of Goods with charging GST/VAT - Posting in Sales Ledger/Sales Account.

In GST Ledger Account.

Cash sale of Goods with charging GST/VAT - Posting in GST Ledger Account.
Recording in Sales Register.

Cash Sale of Goods charging GST - Recording in Sales Register.

Example :

In the Books of M/s.Triveni Medicare, Bhubaneswar, Odisha(GSTIN-21ACHPD1234Q1Z9) Goods sold for Cash to M/s.Durga Medicine, Raygada, Odisha,GSTIN - 21AAHFD0909P1ZQ for ₹1,23,000/-(Taxable Value ₹1,04,237.28, CGST ₹9381.36, SGST ₹9381.36) as per Cash Memo No. 1280 dt.20/11/2021.

Debit Account :

  • Cash Account

Credit Accounts :

  • Sales Account

  • CGST Account

  • SGST Account

Journal Entry :

Journal Entry for Cash Sale of Goods charging GST/VAT - example.
Ledger Posting :

In Cash Ledger/Cash Book.

Cash Sale of Goods charging GST/VAT - Posting in Cash Account/Cash Book.

In Sales Ledger Account.

Cash Sale of Goods charging GST/VAT - Posting in Sales Ledger/Sales Account.

In CGST Ledger Account.

Cash Sale of Goods charging GST/VAT - posting in CGST Ledger.

In SGST Ledger Account.

Cash Sale of Goods charging GST/VAT - posting in SGST Ledger.

Recording in Sales Register.

Cash sale of Goods charging GST/VAT - Recording in Sales Register.

When Goods are sold with charging Indirect tax like GST/VAT on immediate Cash Receipt i.e Cash Sale of Goods(Receipt through Bank Account).

Debit Account :

  • Bank Account

Credit Account :

  • Sales Account

  • GST Account

Journal Entry :

Journal Entry for Cash sale of Goods(Receipt through Bank Account)charging GST/VAT
Ledger Posting :

In Bank Ledger/Bank Book.

Cash Sale of Goods(Receipt through Bank Account) - posting in Bank Ledger.

In Sales Ledger/Sales Account.

Cash Sale of Goods(Receipt through Bank Account) - posting in Sales Ledger Account.
In GST Ledger/GST Account.

Cash Sale of Goods(Receipt through Bank Account) - posting in GST Account.

Recording in Sales Register.

Cash Sale of Goods(Receipt through Bank Account)charging GST/VAT - Recording in Sales Register.

Example :

In the Books of M/s.Triveni Medicare, Bhubaneswar, Odisha(GSTIN-21ACHPD1234Q1Z9) Goods sold for Cash(NEFT credit to SBI CA No.100052) to M/s.Durga Medicine, Raygada, Odisha,GSTIN - 21AAHFD0909P1ZQ for ₹93,640/-(Taxable Value ₹79,355.92, CGST ₹7,142.04, SGST ₹7,142.04) as per Cash Memo No. 1299 dt.22/11/2021.

Debit Account :

  • SBI CA No.100052

Credit Accounts :

  • Sales A/c

  • CGST A/c

  • SGST A/c

Journal Entry :

Journal Entry for Cash sale of Goods(receipt through Bank Account).
Ledger Posting :

In SBI CA No.100052.

Cash Sale of Goods(Receipt through Bank Account) - Posting in Bank Ledger.

In Sales Ledger Account.

Cash Sale of Goods(Receipt through Bank Account) - Posting in Sales Ledger.

In CGST Ledger Account.

Cash Sale of Goods(Receipt through Bank Account) - Posting in CGST Ledger.

In SGST Ledger Account.

Cash Sale of Goods(Receipt through Bank Account) - Posting in SGST Ledger.
 Recording in Sales Register.

Cash Sale of Goods(Receipt through Bank Account) - Recording in Sales Register.

When Goods are sold with charging Indirect tax like GST/VAT on Credit i.e Credit Sale of Goods.

Debit Account :

  • Sundry Debtor's/Party/Buyer Account

Credit Account :

  • Sales Account

  • GST Account

Journal Entry :

Journal Entry for Credit Sale of Goods
Ledger Posting :

In Sundry Debtors Ledger.

Credit Sale of Goods - Posting in Sundry Debtors Ledger.

In Sales Ledger/Sales Account.

Credit Sale of Goods - Posting in Sales Ledger.

In GST Ledger/GST Account.

Credit Sale of Goods - Posting in GST Ledger.

Example :

In the Books of M/s.Triveni Medicare, Bhubaneswar, Odisha(GSTIN-21ACHPD1234Q1Z9) Goods sold to M/s.Durga Medicine, Raygada, Odisha,GSTIN - 21AAHFD0909P1ZQ for ₹1,75,700/-(Taxable Value ₹1,48,898.30, CGST ₹13,400.85, SGST ₹13,400.85) as per Invoice No. 1320 dt.25/11/2021.

Debit Account :

  • M/s. Durga Medicine

Credit Accounts :

  • Sales A/c

  • CGST A/c

  • SGST A/c

Journal Entry :

Journal Entry for Credit Sale of Goods charging Indirect Tax like GST/VAT.
Ledger Posting :

In M/s.Durga Medicine Ledger Account.

Credit Sale of Goods - Posting in Debtors Ledger Account.

In Sales Ledger Account.

Credit Sale of Goods - Posting in Sales Ledger Account.

In CGST Ledger Account.

Credit Sale of Goods - Posting in CGST Ledger Account.

In SGST Ledger Account.

Credit Sale of Goods - Posting in SGST Ledger Account.

Recording in Sales Register.

Credit Sale of Goods - Recording in Sales Register.

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Location: Cuttack, Odisha, India

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