Question

bought goods worth 50000 from suresh on credit and paid 9% cgst and 9% sgst tax on goods over and above 50000 give its journal entry

Answer 1

Credit: Suresh Account (50,000)

Debit: CGST Input (4,500)

Debit: SGST Input (4,500)

Credit: GST Payable (9,000)

These entries capture the purchase of goods, the liability for CGST and SGST, and ensure accurate accounting of the transaction.

When goods are purchased on credit and GST (Goods and Services Tax) is applicable, the journal entry involves recognizing both the purchase and the GST liability. In this scenario, assuming the GST is levied on the total invoice amount including the value of goods worth 50,000, the entry would be as follows:

Purchase of Goods on Credit:

Debit: Purchase Account (50,000)

Credit: Suresh Account (50,000)

This entry records the purchase of goods on credit from Suresh.

CGST (Central Goods and Services Tax) and SGST (State Goods and Services Tax) Liability:

Debit: CGST Input (9% of 50,000)

Debit: SGST Input (9% of 50,000)

Credit: GST Payable (50,000)

This entry recognizes the GST liability. The CGST and SGST inputs represent the tax amounts eligible for input credit.

The total debits and credits in these entries balance each other, ensuring the accounting equation is maintained.