GST Assignment 4

 Reverse Charge-

Before learn Reverse charge, we should to know Types of Charges:

1.      Forward Charge: When supplier is liable to pay tax to govt, it is known as forward charges.

1.      Reverse Charge: When the Recipient is liable to pay tax to govt then it is called Reverse charge.

When reverse charge is applicable:

1. Supply from a Unregistered Dealer to a Registered Dealer (suspended till today) [sec9(4)]

Inward Supply of Services (Reverse charge will be applicable only if the total supply from unregistered person exceeds 5000, in a day.)

2. Services through an e-commerce operator (Amazon, Flipkart etc)

3. Supply of specific goods & Services [ Sec 9(3)] (Cashew nuts, Bidi wrapper leaves, Tobacco leaves, Silk yarn, Raw Cotton, Import of Goods, Services Goods Transport Agency (GTA) Services, Legal services by advocate, Services supplied by an insurance agent to any person carrying on insurance business, Services supplied by a recovery agent to a banking company or a financial institution or a nonbanking financial company, Services by way of transportation of passengers by a radio-taxi, motor cab, taxicab, and motorcycle)

 

Manual Accounting Entry in case of Reverse Charge:

Now Learn Reverse charge entries on tally:

e.g., On 02-06-2019 company availed Legal services from Mushafir Singh (Lawyer) of Gorakhpur amounting to Rs. 1,00,000 with the bill no. 2301 and paid the entire amount by cheque on the same day. Before passing the entry, we need to configure creditor and expense ledgers.

Now go to purchase voucher and pass the required entry.

3. Now Increase Output GST: GOT> F7> Alt+J

Type of Duty: GST

Nature: Increase Tax Liability

Additional Detail: Purchase Under Reverse charge

 

Dr. GST on Reverse Charge (Current Assets)                                             36000

Cr. Output SGST                                                                                           18000

Cr. Output CGST                                                                                          18000

Now on the next month you can take ITC of this. I

 

Suppose on 1-7-2020 you take the ITC of the payment of tax on Reverse charge:

Now Increase Input GST/ ITC:

GOT> A/c Voucher> F7> Alt+J

Type of Duty: GST

Nature: Increase of Input Tax Credit

 

Additional Detail: Purchase Under Reverse charge

 

Dr. Input CGST                                              1800

Dr. Input SGST                                               1800

Cr. GST on Reverse Charge                   3600 (Accept)

Same as you can do this process in case of goods also.

e.g On 02-07-2017 company Import 1 pcs Mainframe computer @ 3200000 from IBM company of California, US.

Gst rate slave 

Place of Supply:

Bill Ship to Concept:

e.g 5 Pcs Printer sold to RKDK a rgular dealer of UP but RKDK give the direction to supply the goods to Orbit Solution a regular dealer of Arunachal Pradesh on 1-2-2021.

Press F8(sales)

Press F12 configuration

e.g 5 Pcs Printer sold to Orbit Solution a regular dealer of Arunachal Pradesh but Orbit Solution give the direction to supply the goods to RKDK a regular dealer of UP on 1-2-21.