GST Credit and GST Liability Adjustment for Open Reverse Charge Goods and Services Invoices

This topic explains the process of adjusting GST Credit and GST Liability for open reverse charge goods and services invoices.

  • For reverse charge invoices of goods, GST Liability and Credit shall be generated immediately, or in next 30 days from date of issue of supplier invoice, if payment to supplier is not made against it.

  • For reverse charge for service invoices, GST Liability and Credit shall be generated immediately, or 60 days from date of issue of supplier invoice, if payment to supplier is not made against it.

  • User can generate GST liability and credit for open reverse charge service invoice through GST Liability Adjustment.

    1. Choose the Search for Page or Report icon, enter GST Liability Adjustment, and then choose the related link.

    2. Select the following in the request page

      Field Name Description
      Adjustment Document No. System will generate number from number series assigned in Purchases & Payable Setup
      GST Registration No. System will list only transactions posted with selected GST Registration No.
      Posting Date Adjustment posting date
      Liability Date Formula Enter 0D, 30D or 60D. For example, if 60D is mentioned, the system will reverse count 60 days from posting date for arriving Liability Filter Date
      Liability Filter Date System will update automatically (Posting date – Liability Date Formula, Ex: 01-Jan-18- 60D= 02-Nov-17), System will consider all open Reverse Charge service invoices posted before date updated in this field. (Ex: 02-Nov-17)
      Vendor No. System will list invoice from this vendor only
      System will verify only for this document
      External Document No. System will verify only for this document
      Nature of Adjustment User need to select the option, available options: Generate, Reverse

For example, vendor issued invoice for INR 10000, in an Intra-State or Intra-Union Territory transaction, and GST 18% (9% CGST and 9% SGST), has to be charged.

  • GL Entries at the time of posting invoice where Input Tax Credit is available, will be as following:

    Particulars Amount
    Purchase Account 10000
    CGST Receivable (Interim) Account 900
    SGST/UTGST Receivable (Interim) Account 900
    CGST Payable (Interim) Account -900
    SGST/UTGST Payable (Interim) Account -900
    Vendor Account 10000
  • GL Entries at the time of posting invoice where Input Tax Credit is not available, will be as following:

    Particulars Amount
    Purchase Account 11800
    SGST Payable Acc(Interim) -900
    CGST Payable Acc(Interim) -900
    Vendor Account 10000
  • GL Entries for Generating GST Liability and GST Credit where Input Tax Credit is available, will be as following:

    Particulars Amount
    CGST Receivable Account 900
    SGST/UTGST Receivable Account 900
    CGST Receivable (Interim) Account -900
    SGST/UTGST Receivable (Interim) Account -900
    CGST Payable (Interim) Account 900
    SGST/UTGST Payable (Interim) Account 900
    CGST Payable Account -900
    SGST/UTGST Payable Account -900
  • GL Entries for Generating GST Liability and GST Credit where Input Tax Credit is not available, will be as following:

    Particulars Amount
    CGST Payable (Interim) Account 900
    SGST/UTGST Payable (Interim) Account 900
    CGST Payable Account -900
    SGST/UTGST Payable Account -900
  • GL Entries for Reversing GST Liability and GST Credit where Input Tax Credit is available, will be as following:

    Particulars Amount
    CGST Receivable Account -900
    SGST/UTGST Receivable Account -900
    CGST Receivable (Interim) Account 900
    SGST/UTGST Receivable (Interim) Account 900
    CGST Payable (Interim) Account -900
    SGST/UTGST Payable (Interim) Account -900
    CGST Payable Account 900
    SGST/UTGST Payable Account 900
  • GL Entries for Reversing GST Liability and GST Credit where Input Tax Credit is not available, will be as following:

    Particulars Amount
    CGST Payable (Interim) Account -900
    SGST/UTGST Payable (Interim) Account -900
    CGST Payable Account 900
    SGST/UTGST Payable Account 900

Tip

In case of Inter-state Reverse Charge Service purchase, IGST Liability and IGST Credit will get generated.

See Also

GST TDS TCS Overview

Note

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