watch_later 01/06/17

Under composition levy you are not suppose to issue a tax invoice, instead a bill of supply should be issued which can not contain details of tax charged.

Tax will be charged on gross sales receipts.

For example if you issued an bill of supply for Rs. 1000. Assuming composition tax rate at 1% you will need to pay tax of Rs. 10 to government.

How will you account this?

Whether revenue booking should be net of tax liability as below:

Receivables A/c   Dr.  1000
Revenue A/c       CR.    990
CGST output A/c Cr.        5
SGST Output A/c Cr.       5

1 Response | Latest response: 04/05/18 | Sort by Likes(thumb_up) Recent | GST Reply
watch_later 04/05/18

For a composition dealer tax will be his cost.

So book full revenue and at month end charge tax liability to cost account.

This could be a possible entry for booking revenue:

Receivables A/c   Dr.  1000
Revenue A/c       CR.  1000

Entry for booking tax cost:

CGST output A/c Cr.         5
SGST Output A/c Cr.        5
Tax Expenses A/c Dr.       10


Sign up to discuss taxation, accounting and finance topics with experts from all over India.

Join Discussion