How to Pass GST Accounting Entries in GST Regime

accounting entries in gst

Accounting Entries: GST was introduced on a dual structure basis. It means on a transaction both central and state governments will levy taxes. This article will clear your problems regarding passing of Accounting entries in GST Regime for Tax payer registered Normal Scheme.

In the case of INTRA state supplies, these taxes are levied-

  • Central Goods and Services Tax (CGST) and
  • State Goods and Services Tax (SGST), or
  • Union Territory Goods and Services Tax (UTGST)

In the case of INTER state supplies, only Integrated Goods and Services Tax (IGST) is charged.

Read Also: GST Return : 10 Upcoming changes in GST Return by GSTN

Manner of ITC Utilization

Input Tax Credit (ITC) of CGST and SGST/UTGST is available straight forward but cross-utilization is not allowed. Example- CGST Credit can not be utilized for Output liability of SGST/UTGST and vice versa.

But Input Credit of CGST or SGST/UTGST utilization with IGST is allowed. Example- CGST credit is allowed for the utilization of payment of IGST Output and vice versa. Read More: GST Input Tax Credit (ITC) Set-off Rules – Simplified with examples

Explanation of Transaction

Every Registered person pays GST on INPUT/ INWARD leg and collects GST on OUTPUT/ OUTWARD leg. These input and output taxes are utilized as mentioned above.

GST accounting entries

Read Also : Input Tax Credit under GST- A Detailed Guide On Facts You Didn’t Know

Accounts for GST Accounting entries

Once the Taxpayer is registered on GST portal, few Electronic Ledgers are available automatically-

1. Electronic cash ledger : It reflects deposits made in cash or bank transfer made by a taxpayer. It is used to set off a penalty, fees, interest, tax, or any other payable amount.  

2. Electronic credit ledger : It reflects the details of Input Tax Credit as self-assessed by the entity in the returns. The amount specified is only used to set off tax liability cannot be used to set off Interest, penalty, fees.

3. Electronic tax liability register : It reflects self-assessed Total Tax Liability of a taxpayer as per the returns filed. 

Read Also: Maintenance of books of Account and Records under GST law

Generally, while doing Accounting we make these accounts in our books-




  • These accounts represents amounts paid on purchases or services received or Inward leg by the business entity.
  • Nature of account- Current Asset


  • These accounts represents Amounts charged on the outward leg or sales or services provided by the business entity.
  • Nature of account- Current liability

3. Utilization Accounts

4. Blocked ITC

  • GST paid on some transaction is not available, such INPUT tax is known as Blocked ITC. GST in INPUT accounts is transferred to Blocked ITC A/c if required. Blocked ITC is transferred to Profit and Loss Account.
  • Nature of account- Expenses

Read Also: 14 Blocked Input Tax Credit (ITC) under GST

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GST Accounting entries Explained with examples

1. Intra- state purchase of goods costing Rs 11,800 (including GST) @18% – Forward Charge Mechanism

Purchase A/c                     Dr10000 
Input CGST A/c                 Dr900 
Input SGST/ UTGST A/c    Dr900 
                                            To Creditor/ Bank/ Cash A/c 11800

2. Inter- state purchase of goods costing Rs 11,800 (including GST) @18% Forward Charge Mechanism

Purchase A/c                     Dr10000 
Input IGST A/c                   Dr1800 
                         To Creditor/ Bank/ Cash A/c 11800

Note :  Same entry for any kind of service on the inward leg.

3. Intra- state or Inter-state purchase of goods costing Rs 11,800 (including GST) @18%- Reverse Charge Mechanism

Purchase A/c                     Dr10000 
To Creditor/ Bank/ Cash A/c 10000
Tax is directly paid to the government.  
Input GST a/c (CGST/ SGST/ UTGST/ IGST)                     Dr1800 
                  To Bank/ Cash / RCM payable A/c 1800

GST payable on the RCM basis is paid by the entity in cash as it can’t adjust with input tax.

4. Intra- state Sales of goods costing 11,800 (including GST) @18%- Forward Charge Mechanism

Debtor/ Bank/ Cash A/ c                     Dr11800 
                                   To Sales A/c  10000
                     To Output CGST A/c 900
To Output SGST/ UTGST A/c 900

5. Inter- state Sales of goods costing 11,800 (including GST) @18%- Forward Charge Mechanism

Debtor/ Bank/ Cash A/c                     Dr11800 
                                       To Sales A/c  10000
                            To Output IGST A/c 1800

GST Interest Calculator

5. Intra- state or Inter-state Sale of goods costing 11,800 (including GST) @18%- Reverse Charge Mechanism

Debtor/ Bank/ Cash A/c                     Dr10000 
                                   To Sales A/c  10000

 Note: Tax is deposited by the Debtor directly.

6. On some transactions, the Input tax credit is blocked and such amount is transferred to Profit and Loss Account.

Example: GST paid Rs.1000, on inter-state purchase made is blocked and GST paid Rs.1500, on intra-state service has taken is blocked.

Blocked ITC A/ c                     Dr2500 
                                   To Input IGST A/c 1000
                  To Input CGST A/c 750
                                To Input SGST/UTGST A/c 750

Utilization of GST A/c (CGST/ SGST/ UTGST/ IGST) is used to settle output liability with input tax credit as per prescribed rules. The calculation is done in returns and single entry is passed generally, at the end of the month. Balances of INPUT Accounts are transferred here wholly. As per calculations balances of OUTPUT are transferred to extent of UTILIZATION.

Debit Closing balance of utilization A/c is transferred to INPUT GST A/c (CGST/ SGST/ UTGST/ IGST). The balance remaining in OUTPUT accounts will be transferred to the GST payable account (CGST /SGST/ UTGST/ IGST).

GST Input Tax Credit Calculator

For Example: Mr. Shiv paid GST on the purchase after adjusting carry forwards


And he collects GST on the sales

INPUT TAX400003000050000
(Less) Utilized400003000050000
PAYABLE OUTPUT100004000020000

The following accounting entries will be passed.

CGST Utilization A/c 30000 
To CGST Input A/c 30000
SGST Utilization A/c50000 
To SGST Input A/c 50000
IGST Utilization A/c40000 
To IGST Input A/c 40000
CGST Output A/c70000 
                       To CGST Utilization A/c 30000
                       To CGST Payable A/c 40000
SGST Output A/c70000 
                       To SGST Utilization A/c 50000
                       To SGST Payable A/c 20000
IGST Output A/c50000 
                       To IGST Utilization A/c 40000
                       To IGST Payable A/c 10000

If after all the above entries are passed, we are left with INPUT Accounts or PAYABLE Accounts and GST PAYABLE on RCM Accounts. Simple Accounting entry or Journal is passed for payment-

Any Payable A/c (GST/ RCM)XXXXX 
                       To Bank/ Cash A/c XXXXX

Read Also: Updated List of Reverse Charge Mechanism (RCM) with Examples

Please Note: No narrations are given below the entries and the method for passing accounting entries is just a illustrative. There are many others way to do the same.

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The author of the above article is Aditya Kishore.

Disclaimer:The article or blog or post (by whatever name) in this website is based on the writer’s personal views and interpretation of Act. The writer does not accept any liabilities for any loss or damage of any kind arising out of information and for any actions taken in reliance thereon. 
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