Sales Journal Entry with GST and TDS
When recording a sales transaction that involves GST (Goods and Services Tax) and TDS (Tax Deducted at Source), it is essential to accurately reflect these components in the journal entries. Here's an example illustrating how to account for GST and TDS in a sales transaction:
Scenario:
A company sells goods worth ₹100,000 to a customer. The applicable GST rate is 18%. Additionally, TDS at 1% is deducted by the customer.
1. Recording the Sale with GST
| Date | Particulars | Debit (₹) | Credit (₹) |
|---|---|---|---|
| 2024-06-07 | Accounts Receivable A/c | 118,000 | |
| To Sales Revenue A/c | 100,000 | ||
| To Output GST A/c | 18,000 | ||
| (Being goods sold with 18% GST) |
2. Recording the Payment Received with TDS Deduction
| Date | Particulars | Debit (₹) | Credit (₹) |
|---|---|---|---|
| 2024-06-15 | Bank A/c | 116,820 | |
| TDS Receivable A/c | 1,180 | ||
| To Accounts Receivable A/c | 118,000 | ||
| (Being payment received after 1% TDS deduction) |
Explanation:
Recording the Sale with GST:
- Accounts Receivable A/c is debited with the total amount receivable from the customer, including GST (₹118,000).
- Sales Revenue A/c is credited with the value of the goods sold (₹100,000).
- Output GST A/c is credited with the GST collected on the sale (₹18,000).
Recording the Payment Received with TDS Deduction:
- Bank A/c is debited with the net amount received after TDS deduction (₹116,820).
- TDS Receivable A/c is debited with the TDS amount deducted by the customer (₹1,180).
- Accounts Receivable A/c is credited with the total amount receivable (₹118,000).
