how to find gst for journal entry pls tell with example
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The formula for GST calculation:
Add GST: GST Amount = (Original Cost x GST%)/100. Net Price = Original Cost + GST Amount.
Remove GST: GST Amount = Original Cost – [Original Cost x {100/(100+GST%)}] Net Price = Original Cost – GST Amount.
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there are two types of GST.. input gst and output gst.
input gst is levied on the goods purchased from someone i.e input gst is paid by us.
whereas, output gst is charged on goods sold by us. thus, the amount of output gst is received.
GSt is charged by the state as well as the central government. the GSt charged by the state is termed as SGST. And the GST charged by the central government is CGST.
now, when we calculate the amount of GST we do it on two basis:-
1. if the goods are sold/ purchased within the same city... in this case both CGST and SGST will be charged. example:-
goods purchased by ram worth ₹10000 and GST is 10%. in this case, both CGST and SGST will be applied as 5% each.
thus the entry will be:-
purchases ac dr 10,000
input CGST ac dr ( 5% on 10000) 500
Input SGST ac dr 500
to ram ac 11,000₹
input gst is levied on the goods purchased from someone i.e input gst is paid by us.
whereas, output gst is charged on goods sold by us. thus, the amount of output gst is received.
GSt is charged by the state as well as the central government. the GSt charged by the state is termed as SGST. And the GST charged by the central government is CGST.
now, when we calculate the amount of GST we do it on two basis:-
1. if the goods are sold/ purchased within the same city... in this case both CGST and SGST will be charged. example:-
goods purchased by ram worth ₹10000 and GST is 10%. in this case, both CGST and SGST will be applied as 5% each.
thus the entry will be:-
purchases ac dr 10,000
input CGST ac dr ( 5% on 10000) 500
Input SGST ac dr 500
to ram ac 11,000₹
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