Journal Entry for GST Adjustment in TallyPrime
In TallyPrime, you need to keep your books updated with tax liability and Input Tax Credit (ITC). This ensures that you do not miss out on statutory regulations under GST, including GST payment and availing of ITC. However, in some instances, you need to record journal vouchers for GST adjustments in TallyPrime. Journal entry for GST adjustment in TallyPrime helps you in adjustments such increase or reversal of tax liability.
Based on the nature of GST Adjustments, you can use the appropriate ledgers for debit and credit while creating journal vouchers in TallyPrime.
The following table lists all the applicable scenarios for GST adjustments and the ledgers to be debited and credited.
Moreover, you will know the credit and debit ledger to be used in different scenarios of GST adjustments.
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Nature of Adjustment |
Additional Details |
Ledgers to be Debited and Credited |
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Decrease of Tax Liability |
Adjustment Against Credit |
Explained in Recording Journal Vouchers for Adjustments Against Tax Credit under GST |
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Cancellation of Advance Payments under Reverse Charge |
Debit – Central and state tax or integrated tax, and cess ledgers. Credit – Expenses or current assets ledger. |
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Cancellation of Advance Receipts |
Debit – Central and state tax or integrated tax, and cess ledgers. Credit – Expenses or current assets ledger. |
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Cancellation of Advance Receipts for Exports/SEZ sales |
Debit – Integrated tax and cess ledgers. Credit – Expenses/current assets ledger. |
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Purchase against Advance Payment |
Debit – Central and state tax or integrated tax, and cess ledgers. Credit – Expenses or current assets ledger. |
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Sales against Advance Receipts |
Debit – Integrated tax and cess ledgers. Credit – Expenses/current assets ledger. |
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Sales against Advance Receipts for Export/SEZ sales |
Debit – Integrated tax and cess ledgers. Credit – Expenses/current assets ledger. |
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Increase of Input Tax Credit |
Import of Capital Goods |
Debit – Central and state tax or integrated tax, and cess ledgers. Credit – Current assets ledger. |
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Import of Goods |
Debit – Central and state tax or integrated tax, and cess ledgers. Credit – Current assets ledger. |
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Import of services |
Debit – Integrated tax and cess ledgers. Credit – Current assets ledger. |
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ISD Transfer |
Debit – Central and state tax or integrated tax, and cess ledgers. Credit – Party ledger. |
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Others |
Debit – Central and state tax or integrated tax, and cess ledgers. Credit – Expenses/current assets ledger. |
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Purchase from SEZ |
Debit – Central and state tax or integrated tax, and cess ledgers. Credit – Expenses/current assets ledger. |
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Purchase from Unregistered dealer |
Debit – Central and state tax or integrated tax, and cess ledgers. Credit – Expenses or current assets ledger. |
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Purchase under reverse charge |
Debit – Central and state tax or integrated tax, and cess ledgers. Credit – Expenses or current assets ledger. |
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Re-claim of reversal ITC (on account of buyer payment) |
Debit – Central and state tax or integrated tax, and cess ledgers. Credit – Expenses or current assets ledger. |
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Re-claim of reversal ITC – Rule 42 (2)(b) |
Debit – Central and state tax or integrated tax, and cess ledgers. Credit – Expenses or current assets ledger. |
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TCS Adjustment |
Debit – Central and state tax or integrated tax, and cess ledgers. Credit – Current assets ledger. |
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TDS Adjustment |
Debit – Central and state tax or integrated tax, and cess ledgers. Credit – Current assets ledger. |
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Transitional Credit |
Explained in Recording a Journal Voucher for Transitional Credit under GST |
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Transfer of ITC (applicable only for Ladakh) |
Debit – SGST ledgers Credit – UT Tax ledgers |
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Increase of Tax Liability |
Advance Receipts for Export/SEZ sales |
Debit – Expenses or current assets ledger. Credit – Integrated tax and cess ledgers. |
|
Advances Paid under Reverse Charge |
Debit – Expenses or current assets ledger. Credit – Central and state tax or integrated tax, and cess ledgers. |
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Import of Capital Goods |
Debit – Current assets ledger. Credit – Central and state tax or integrated tax, and cess ledgers. |
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Import of Goods |
Debit – Current assets ledger. Credit – Central and state tax or integrated tax, and cess ledgers. |
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Import of services |
Debit – Current assets ledger. Credit – Integrated tax and cess ledgers. |
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Interest |
Debit – Expenses or party ledger. Credit – Central and state tax or integrated tax, and cess ledgers. |
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Late Fees |
Debit – Expenses or party ledger. Credit – Central and state tax or integrated tax, and cess ledgers. |
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On Account of Advance Receipts |
Debit – Expenses or current assets ledger. Credit – Central and state tax or integrated tax, and cess ledgers. |
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Others |
Debit – Expenses or party ledger. Credit – Central and state tax or integrated tax, and cess ledgers. |
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Penalty |
Debit – Expenses or party ledger. Credit – Central and state tax or integrated tax, and cess ledgers. |
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Purchase from Unregistered dealer |
Debit – Expenses or current assets ledger. Credit – Central and state tax or integrated tax, and cess ledgers. |
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Purchase under reverse charge |
Debit – Expenses/current assets ledger. Credit – Central and state tax or integrated tax, and cess ledgers. |
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Increase of Tax Liability & Input Tax Credit |
Import of Services |
Debit – Central and state tax or integrated tax, and cess ledgers. Credit – Central and state tax or integrated tax, and cess ledgers. |
|
Purchase from Unregistered dealer |
Debit – Central and state tax or integrated tax, and cess ledgers. Credit – Central and state tax or integrated tax, and cess ledgers. |
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Purchase under reverse charge |
Debit – Central and state tax or integrated tax, and cess ledgers. Credit – Central and state tax or integrated tax, and cess ledgers. |
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Opening Balance |
— |
Procedure is explained in Transferring Tax Credits of VAT, excise and service tax to GST |
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Refund |
Not Applicable |
Debit – Bank ledger Credit – Central and state tax or integrated tax, and cess ledgers, or current assets ledger |
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Interest |
Debit – Bank ledger Credit – Central and state tax or integrated tax, and cess ledgers, or current assets ledger |
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Late Fees |
Debit – Bank ledger Credit – Central and state tax or integrated tax, and cess ledgers, or current assets ledger |
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Others |
Debit – Bank ledger Credit – Central and state tax or integrated tax, and cess ledgers, or current assets ledger |
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Penalty |
Debit – Bank ledger Credit – Central and state tax or integrated tax, and cess ledgers, or current assets ledger |
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Reversal of Input Tax Credit |
Not Applicable |
Debit – Expenses or party ledger. Credit – Central and state tax or integrated tax, and cess ledgers. |
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Capital credit due to exempted supplies – Rule 43(1) (h) |
Debit – Expenses or current assets ledger. Credit – Central and state tax or integrated tax, and cess ledgers. |
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Exempt and non-business supplies – Rule 42(1)(m) |
Debit – Expenses or current assets ledger. Credit – Central and state tax or integrated tax, and cess ledgers. |
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Import of services |
Debit – Expenses or current assets ledger. Credit – Central and state tax or integrated tax, and cess ledgers. |
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Ineligible credit |
Debit – Expenses or current assets ledger. Credit – Central and state tax or integrated tax, and cess ledgers. |
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ISD credit note – Rule 39(1)(j)(ii) |
Debit – Expenses or current assets ledger. Credit – Central and state tax or integrated tax, and cess ledgers. |
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Non-payment to the Supplier – Rule 37(2) |
Debit – Expenses or current assets ledger. Credit – Central and state tax or integrated tax, and cess ledgers. |
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On account of claiming more – Rule 42 (2)(a) |
Debit – Expenses or current assets ledger. Credit – Central and state tax or integrated tax, and cess ledgers. |
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Others |
Debit – Expenses or current assets ledger. Credit – Central and state tax or integrated tax, and cess ledgers. |
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Purchase from Unregistered dealer |
Debit – Expenses or current assets ledger. Credit – Central and state tax or integrated tax, and cess ledgers. |
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Purchase under reverse charge |
Debit – Expenses or current assets ledger. Credit – Central and state tax or integrated tax, and cess ledgers. |
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Reversal of Tax Liability |
Import of Services |
Debit – Central and state tax or integrated tax, and cess ledgers. Credit – Expenses or current assets ledger. |
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Purchase from Unregistered dealer |
Debit – Central and state tax or integrated tax, and cess ledgers. Credit – Expenses or current assets ledger. |
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Purchase under reverse charge |
Debit – Central and state tax or integrated tax, and cess ledgers. Credit – Expenses or current assets ledger. |
