https://help.tallysolutions.com/docs/te9rel65/Tax_India/gst/sale_of_fixed_assets_gst.htm

Sale of Fixed Assets Under GST

You can record the relevant transactions for sale of fixed assets and view the details in GST reports and balance sheet.

On this page

Purchase of fixed assets

Voucher for depreciation

Sale of fixed assets

View details in GST report

View details in Balance Sheet

Journal entries for adjusting profit or loss on sale of fixed assets

Purchase of fixed assets

Go to Gateway of Tally > Accounting Vouchers > F9: Purchase > click I : Accounting Invoice .

Record purchase of fixed assets in accounting invoice with GST ledgers as shown:

Voucher for depreciation

Record the depreciation voucher before recording the sale of fixed assets.

Go to Gateway of Tally > Accounting Vouchers > F7: Journal .

1. Debit the depreciation ledger grouped under expenses, and enter the value of depreciation.

2. Credit the Fixed asset ledger.

3. Press Enter to save.

Sale of fixed assets

Go to Gateway of Tally > Accounting Vouchers > F8: Sales > click I : Accounting Invoice .

Ensure the ledger used for sale of fixed assets is grouped under Sales Accounts . Record sale of fixed asset in accounting invoice, by selecting the GST ledgers based on the party's Place of Supply .

This sale value will appear in your trading account and Sales Register . As the sale is of fixed asset, you need to transfer this amount to fixed asset ledger, to form part of the Balance Sheet .

Note: Sale of fixed asset can be recorded in journal voucher as shown below, but you cannot generate the sales invoice.

View details in GST report

Go to Gateway of Tally > Display > Statutory Reports > GST > GSTR-1 .

If the fixed asset is sold to:

Registered dealer, the details will appear under B2B Invoices.

Unregistered dealer, the details will appear under B2C Invoices.

View details in Balance Sheet

Balance sheet appears as shown:

Journal entries for adjusting profit or loss on sale of fixed assets

Account for profit on sale of fixed asset

Transfer the profit to income ledger to reflect the actual value of fixed assets in Balance sheet.

Example: After charging depreciation on fixed assets, if the net value of the fixed assets is 4,000 and the sale value is 5,000, record a Journal voucher to transfer the profit as given below:

Debit: Sale of Fixed assets = 5,000

Credit: Fixed Assets = 4,000

Credit: Indirect Income = 1,000

Account for loss on sale of fixed asset

Transfer the loss to expense ledger to reflect the actual value of fixed assets in Balance sheet.

Example: After charging depreciation on fixed assets, if the net value of the fixed assets is 5,000 and the sale value is 4,000, record a Journal voucher to transfer the loss as given below:

Debit: Sale of Fixed assets = 4,000

Debit: Indirect Expenses = 1,000

Credit: Fixed Assets = 5,000