Entry for Expenses if ITC Available or Not

Last updated at Dec. 16, 2024 by

We know that Expense entry is-
Expense Dr
To Party
Explanation-We know that all expenses are Debited
Party is Sundry Creditor, a Liability, when liability increase it is Credited
 
 
 
Same Entry with GST is
Expense Dr
Input GST Dr
To Party
Explanation-We get ITC benefit of this GST, so it is like an asset for us
(When asset increases,it is Debited)
 
 
However, for some expenses, we do not get any ITC Benefit
Example-No Input of Food, Catering, Life insurance etc.
For them, we  do not show GST separately and pass entry
 
Expense Dr
To Party
 
 
Lets understand this with the help of an example

 

Expense Entries.jpg

 

Example
Suppose we receive 2 invoices, One of Stationary of 1000+5% GST
Other of Pizza of 1000+5% GST
What will be the entry?

expense pizza bill.jpg

 

 

 

 

 

 

 

 

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Transcript

Expense To Party 100000 100000 100000 5000 Expense Dr Input IGST Dr To Party 105000 100000 2500 Expense Dr Input CGST Dr To Party 105000 2500 Input SGST Dr Expense Entry 100000 Expense Entry 100000 + 5% IGST Expense Entry 100000 + 5% CGST SGST 105000 105000 Expense Dr To Party (If ITC Available) ( If ITC Available) (If No ITC) 105000 105000 Expense Dr To Party (If No ITC) Expense Entries Stationary Bill 1000 + 5% GST So Entry is ITC Available Pizza Bill 1000+5% GST No ITC Available So Entry is Stationary Dr 1000 Input CGST 2.5% Dr 25 Input SGST 2.5% Dr 25 To Party 1050 Food Exp Dr 1050 To Party 1050

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CA Maninder Singh

CA Maninder Singh is a Chartered Accountant for the past 14 years. He also provides Accounts Tax GST Training in Delhi, Kerala and online.