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.
- Sales voucher
- Purchase voucher
- Journal voucher
- Payment voucher
- Receipt by accounting for TDS deduction
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
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.
Debit: Ajay Developers = 2,000
Credit: TDS – CGST @ 1% = 1,000
Credit: TDS – SGST @ 1% = 1,000
Debit: Ajay Developers = 1,16,000
Credit: Bank/Cash = 1,16,000
Ajay Developers will record a receipt voucher and account for TDS deduction.
Debit: Cash/Bank = 1,16,000
Credit: KM Council of India = 1,16,000
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.