Record a purchase voucher with GST for the complete transaction, and then deduct TDS in journal voucher. Make the payment for the balance amount. These transactions will not appear in GST returns.
Consider a scenario where Ajay Developers records sale of works contract to KM Council of India, worth Rs. 1,00,000. The transaction attracts 18% GST.
● Receipt by accounting for TDS deduction
To record a sales voucher in the books of Ajay Developers
Debit: KM Council of India = 1,18,000
Credit: Sale of works contract = 1,00,000
Credit: CGST @ 9% = 9,000
Credit: SGST @ 9% = 9,000
To record a purchase voucher in the books of KM Council of India
Debit: Purchases of works contract = 1,00,000
Debit: CGST @ 9% = 9,000
Debit: SGST @ 9% = 9,000
Credit: Ajay Developers = 1,18,000
KM Council of India will deduct TDS and then make the payment to Ajay Developers.
To record a journal voucher for TDS deduction in the books of KM Council of India
Debit: Ajay Developers = 2,000
Credit: TDS - CGST @ 1% = 1,000
Credit: TDS - SGST @ 1% = 1,000
To record a payment voucher for TDS deduction in the books of KM Council of India
Debit: Ajay Developers = 1,16,000
Credit: Bank/Cash = 1,16,000
Ajay Developers will record a receipt voucher and account for TDS deduction.
To record a receipt voucher in the books of Ajay Developers
Debit: Cash/Bank = 1,16,000
Credit: KM Council of India = 1,16,000
To record TDS on CGST and SGST in the books of Ajay Developers
Debit: TDS - CGST = 1,000
Debit: TDS - SGST = 1,000
Credit: KM Council of India = 2,000
Use the same process to record transactions of TCS with GST.
'Account for TDS or TCS on Purchases Under GST' has been shared with
