Books of accounts and records form an essential part of any business organization. These records and accounts play a vital role in the proper functioning of a business. With the introduction of GST in India, there have been several changes in the accounting practices followed by businesses. It is important for small and medium business owners, as well as startup founders, to understand the books of accounts and records under GST.
Books of accounts refer to the records of financial transactions made by a business. These records are maintained on a daily basis to track financial activities such as sales, purchases, expenses, and payments, etc. Books of accounts are essential for preparing financial statements such as the balance sheet and profit and loss account.
Records under GST refer to the documents and records that businesses need to maintain as per the GST laws. These records include invoices, bills of supply, delivery challans, credit and debit notes, etc. Records under GST also include returns filed, input tax credit claimed, and tax paid.
Under GST, businesses need to maintain various books of accounts and records. These books and records are as follows:
A purchase register is a record of all purchases made by a business. It includes details such as the name of the supplier, date of purchase, invoice number, taxable value, and GST paid. This register is essential for claiming input tax credit on purchases.
A sales register is a record of all sales made by a business. It includes details such as the name of the customer, date of sale, invoice number, taxable value, and GST charged. This register is essential for calculating the output tax liability and filing GST returns.
The input tax credit register is a record of all input tax credit claimed by a business. It includes details such as the name of the supplier, date of purchase, invoice number, taxable value, and GST paid. This register is essential for claiming input tax credit on purchases.
The output tax liability register is a record of all output tax liability of a business. It includes details such as the name of the customer, date of sale, invoice number, taxable value, and GST charged. This register is essential for calculating the output tax liability and filing GST returns.
The GST payment register is a record of all GST payments made by a business. It includes details such as the date of payment, GSTIN, amount paid, and mode of payment. This register is essential for reconciling the GST liability and filing GST returns.
A delivery challan is a document that accompanies the goods being transported. It includes details such as the name of the supplier, name of the recipient, address of the supplier and recipient, description of goods, quantity of goods, and tax charged. This document is essential for transporting goods under GST.
An e-way bill is an electronic document that is generated for the movement of goods above a certain value. It includes details such as the name of the supplier, name of the recipient, address of the supplier and recipient, description of goods, quantity of goods, and tax charged. This document is essential for transporting goods under GST.
Tax invoices and bills of supply are documents that are issued by a business to its customers for the sale of goods or services. Tax invoices are issued for taxable supplies, and bills of supply are issued for exempt supplies. These documents include details such as the name of the supplier, name of the recipient, address of the supplier and recipient, description of goods, quantity of goods, and tax charged.
Books of accounts and records play a crucial role in the proper functioning of any business. Under GST, businesses need to maintain various books of accounts and records to comply with GST laws. It is essential for small and medium business owners, as well as startup founders, to understand the books of accounts and records under GST to avoid any penalties or legal issues.
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