Does ERPNext automatically calculate sales tax payable, based on your input and output tax, which gets applied at the time of entering sales and purchase invoice. I am able to view both values in GSTR -1 and GSTR -2 . But I want to know if there is a separate account head which automatically nets your output and input tax to show sales tax payable amount. Ideally the account should come in the liabilites side (Output tax- Input tax).
I have framed my GST ledgers in this format. Helping me to understand total gst collected from sales under various rates. But my input tax from purchases do not get netted out in this scenario
No, Erpnext doesn’t have that, IMO no ERP had these feature.
But you can create reconciliation GL and transfer it manually or customized it for auto entry.
Matching with GSTR 3B
You can check with your accountant, but usually Input Tax Credit sits in Current Assets>Tax Assets. If you use the same Accounts (Say CGST, SGST & IGST) for both Purchases and Sales, the amount in the Ledger Balance is the net amount.
Most accounts like to pass an accounting entry and net into separate Purchase and Sales GST accounts. But there is no reason why you cannot have the same accounts for both purchases and sales.
Hi JayRam, thanks for your reply.
This is what I had thought initially as well. But the ITC on purchase invoices do not appear under tax assets, and the GST amounts I have set is not netted but its is the total of output tax on sales.Although I can view my ITC’s from GSTR-2
Hi Sumit,thanks for your reply.
How do you go about creating a reconciliation ledger for this purpose. Which would automatically calculate the difference?
GST or any other VAT type tax is a payable. It does not belong on P&L. You setup a Group Account - Say Net GST Payable - under which you have 2 sub accounts - GST Collected (on sales) and GST Paid (on Purchases). Each sub account ledger can filtered for the month (to file monthly VAT paid / collected). The group account - NET GST Payable - shows the difference so that is the total to pay. When you actually make the tax payment - you make journal entry to credit bank account and debit GST Payable.
Yep, that’s a great approach too. Better than using a single account for Inbound and Outbound transactions (ERPNext Ver 12 onwards does not let you use the same account because of some filters that have been applied, I guess.
Hi Jay,
I have made the same template for my sales charge as well as purchase charge template.
But I made them both sepearatly,but with the same name and GST rates linked. Is there anything else I should do? Because that is how it was always kept and the net amount still does not show
P.S I am using item tax template for drawing up tax rates , since we sell different GST rate products.
Hi there,
So does this mean I have to create another set of GST rates , under a different group name called input tax for purchases?
The below rates are used as reference for both item tax ,sales charge and purchase template!
Below is my current setup
If you want to separate your GST paid on purchases from GST collected - then yes - you will need separate account heads. I suggested to roll them both into one Group head called GST Payable - so that will show you the NET GST owed.
Under Duties and Taxes payable - create a new group account - Net GST Payable. Under this new group account create 2 branches - one for GST collected and One for GST Paid. You can move the existing 3 accounts under one of those branches and then create 3 more for the other branch.
This will allow you visibility of the GST collected or paid by month and the total GST payable to govt. Hope this helps.
Hi Sumit,
What do you suggest would be a good way to set up GST for a firm sellingat different tax rates on products.
I have already made an item tax template.
Wanted my duties and taxes to show the net amount of output and input tax.
I have made separate ledger accounts for each gst rate collected, in order to filter it better and check
If there is a better way of setting this up ,please do suggest how I can set up my tax ledgers
