GST Software

Goods and service tax or GST will have a tax to reduce all taxes. It will bring in “one nation one tax” rule.

Although there will be some initial transition challenges, GST will bring very clarity in many areas of business. One of the areas is accounting and bookkeeping. Read on to learn about accounting entries under the GST.

Current Scenario

There will be separate accounts for excise, VAT, CST and service tax. Here is a list of some of the accounts that currently maintain any business (except for accounts like Purchase, Sale, Stock) –

Excise dues payable to producers (C)
Cenvat Credit A / C (for manufacturers)
Output VAT A / C
Input VAT a / c
Input service tax A / C
Output Service Tax A / C
For example, a merchant Mr. X should maintain minimum basic accounts –

Output VAT A / C
Input VAT a / c
CST A / C (For Inter-State Sale and Purchase)
Service tax a / c [He will not be able to claim any service tax input credit because he is a trader with output VAT. Service tax can not be set against VAT / CST]
GST Regime
Under GST all these taxes (excise duties, VAT, service tax) will be credited to one account.
The same trader X will then have to maintain the following a / cs (in addition to accounts such as purchase, sale, stock) –

Input CGST A / C
Output CGST A / C
Input SGST A / C
Output SGST A / C
Input IGST A / C
Output IGST A / C
Electronic Cash Ledger (GST should be maintained on government GST portal to pay)
For a list of accounts to maintain, please read here.

While the number of accounts is more clearly, once you go through accounting, you will find that this record is very easy to keep. One of the biggest advantages of X will be that it can set its input tax on sale with its output tax.

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