T.S. Grewal ISC Class 11 Accountancy Solutions Chapter 12 - Accounting of Goods and Services Tax (GST)

Question

Journalise the following transactions in the books of Rajan of Delhi:

(i) Sold goods to Krishna of Delhi at the list price ₹ 20,000 less trade discount 10% add CGST and SGST @ 9% each, and allowed cash discount 5%. He paid the amount immediately.

(ii) Supplied goods costing ₹ 6,000 to Mohan of Kolkata issued invoice at 10% above cost less 5% trade discount plus IGST @ 18%.

(iii) Goods valued at ₹ 2,500 distributed from stock as samples, as part of an advertising campaign. These goods were purchased paying CGST and SGST @ 9% each.

(iv) Sold goods costing ₹ 1,00,000 to Anil of Delhi at a profit of 20% on sales less 20% Trade Discount plus CGST and SGST @ 9% each.

Solution

Note: GST is levied at the rates given in the question: CGST + SGST on intra-state supplies (within the same state) and IGST on inter-state supplies. Input GST is the tax paid on purchases and expenses; Output GST is the tax collected on sales.

Note: Trade discount is not shown separately in the books (sales are recorded net of it). Cash discount is deducted from the taxable value, as in the book. In (ii) IGST = 18% of ₹ 6,270 = ₹ 1,128.60, taken as ₹ 1,129. In (iii) goods given away free are not a sale, so the Input GST claimed on them is reversed and the whole cost is charged to Advertisement. In (iv) the profit of 20% is on the list price, so cost is 80% of it.