Book-Keeping and Accountancy · Ch 3 — Journal
GST in Journal Entries — CGST, SGST and IGST
GST in Journal Entries — CGST, SGST and IGST
Since the Goods and Services Tax (GST) applies to almost every purchase and sale of goods a business makes, the Maharashtra HSC Book-Keeping and Accountancy syllabus requires GST to be correctly recorded, as a separate component, in journal entries for purchases, sales and eligible expenses. GST is never merged into the Purchases or Sales figure — it is always shown through its own, separate ledger accounts.
CGST (Central GST) and SGST (State GST)
For a transaction WITHIN the same state (an intra-state supply), GST is split equally into two components — CGST, collected by the Central Government, and SGST, collected by the State Government — each charged at exactly half the total GST rate.
IGST (Integrated GST)
For a transaction BETWEEN two different states (an inter-state supply), the entire GST is charged as a single tax, IGST, at the full rate, instead of being split into CGST and SGST.
On the purchase side, GST paid to a supplier is recorded through Input CGST A/c and Input SGST A/c (or Input IGST A/c for an inter-state purchase) — these are Personal/Real-type asset accounts, since the GST paid is recoverable (usable as Input Tax Credit against GST payable on sales) and is therefore debited, like any other asset acquired. On the sale side, GST collected from a customer is recorded through Output CGST A/c, Output SGST A/c (or Output IGST A/c) — these represent GST the business must eventually pay to the Government, and are therefore credited, like a liability.
Worked illustration 1 — intra-state purchase. Purchased machinery for ₹50,000 from a local dealer, paying GST @ 18% (CGST 9% + SGST 9%) by cheque.
GST = 50,000 × 18% = ₹9,000, split as CGST ₹4,500 and SGST ₹4,500. Total paid = 50,000 + 9,000 = ₹59,000.
| Date | Particulars | L.F. | Debit (₹) | Credit (₹) |
|---|---|---|---|---|
| — | Machinery A/c ..................Dr. Input CGST A/c .................Dr. Input SGST A/c .................Dr. To Bank A/c (Being machinery purchased and GST paid by cheque, CGST and SGST @ 9% each) | 50,000 4,500 4,500 | 59,000 |
Worked illustration 2 — inter-state purchase. Purchased goods worth ₹30,000 for cash from a dealer in another state, GST charged @ 18% as IGST.
IGST = 30,000 × 18% = ₹5,400. Total paid = 30,000 + 5,400 = ₹35,400.
| Date | Particulars | L.F. | Debit (₹) | Credit (₹) | …
Central Goods and Services Tax — one half of the GST charged on a supply within the same state, collected by the …
State Goods and Services Tax — the other half of the GST charged on a supply within the same state, collected by …
Integrated Goods and Services Tax — the single GST charged, at the full rate, on a supply between two …