Welcome "Accounting Treatment of GST in India -Part 2". In this part, we will treat GST when outward or inward supply is out of same state. This is called inter-State sale. So, whole GST will go to Central govt. under IGST.
Example
Mr. A purchased goods Rs. 2,50,000 from outside the State
He sold Rs.50,000 outside the state
He paid internet bill Rs. 2,000
Assuming CGST @9% and SGST@9%
When purchase is out of state
1 Purchase A/c Dr. 2,50,000
Input IGST A/c Dr. 45000
Creditors A/c Cr. 295000
When Sale is out of state
2. Debtors A/c Dr. 59000
Sales A/c Cr. 50000
Output IGST A/c Cr. 9000
When Local Service Received
3. Internet Expenses A/c Dr. 2000
Input CGST A/c Dr. 180
Input SGST A/c Dr. 180
Bank A/c Cr. 2360
Total CGST input =180=1,360
Total CGST output =nil
Total SGST input =180=180
Total SGST output =nil
Total IGST input =45000
Total IGST output =9000
Output CGST Nil
Input credit = 180
input credit IGST for CGST 4500
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Amount Receivable Rs. 4680
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Net Balance Received from Tax Department
Electronic Cash Ledger account Dr. 40500
Output IGST Account Dr. 4500
Input IGST Account Cr. 45000
Electronic Cash Ledger account Dr. 4680
Output CGST account Dr. nil
Input CGST Account Cr.4680
