input credit for bank charges
This query is : Resolved
26 October 2017
My bank has debited my account with cheque returned charges including GST.. is it available as Input GST credit to me?
26 October 2017
Yes it is available as input credit.
26 October 2017
Yes, you can GST input credit on bank charges
26 October 2017
can i make a simple journal voucher entry as
Bank charges dr
CGST dr
SGST dr
to Bank
or i need ti creat purchase voucher for the same?
26 October 2017
Just a journal entry is enough.
26 October 2017
how it will affect my inward supply in gstr 2
01 August 2024
Here's how to handle the situation of cheque return charges including GST in your accounting and GST filings:
### **1. **Availability of Input GST Credit:**
- **Input GST Credit:** Yes, you can claim input GST credit on the cheque return charges if the charges are related to your business operations and you have a valid tax invoice. According to GST rules, input tax credit (ITC) is available for any supply of goods or services that are used for business purposes.
### **2. **Journal Entry for Cheque Return Charges:**
You can record the cheque return charges and the GST in your books of accounts. Here is a simple journal entry:
- **Bank Charges Account:** Debit the total amount including GST.
- **CGST Account:** Debit the CGST portion of the GST.
- **SGST Account:** Debit the SGST portion of the GST.
- **Bank Account:** Credit the total amount including GST.
**Journal Entry Example:**
```plaintext
Bank Charges Account (Expense) Dr [Total Amount]
CGST Input Tax Credit Account Dr [CGST Amount]
SGST Input Tax Credit Account Dr [SGST Amount]
To Bank Account Cr [Total Amount]
```
### **3. **Purchase Voucher or Journal Voucher:**
- **Purchase Voucher:** If you have a detailed invoice from the bank with GST breakup, it is preferable to create a purchase voucher to capture all the details and ensure proper documentation for claiming input credit.
- **Journal Voucher:** If you only need to record the transaction and the details are straightforward, a journal voucher is sufficient. Ensure you have proper documentation to support the transaction.
### **4. **Impact on GSTR-2:**
- **Inward Supply in GSTR-2:** The transaction will appear in your GSTR-2 as an inward supply. Ensure that the details from your GST invoices are accurately reflected in the return. The input credit claimed will be added to your available credit.
### **5. **Practical Steps:**
1. **Ensure Documentation:** Keep a copy of the bank statement or invoice detailing the cheque return charges and GST.
2. **Input Credit Claim:** Ensure the GST charged is eligible for credit and matches the invoice details.
3. **Reconcile Records:** Reconcile the GST credit claimed with your GSTR-2 to ensure accuracy.
### **Summary:**
You can record the cheque return charges with GST as a journal entry or purchase voucher depending on your preference and documentation. The GST portion can be claimed as input credit in your GST returns, provided you have valid documentation.
Always ensure compliance with the latest GST rules and keep proper records for audit and reconciliation purposes.
### **1. **Availability of Input GST Credit:**
- **Input GST Credit:** Yes, you can claim input GST credit on the cheque return charges if the charges are related to your business operations and you have a valid tax invoice. According to GST rules, input tax credit (ITC) is available for any supply of goods or services that are used for business purposes.
### **2. **Journal Entry for Cheque Return Charges:**
You can record the cheque return charges and the GST in your books of accounts. Here is a simple journal entry:
- **Bank Charges Account:** Debit the total amount including GST.
- **CGST Account:** Debit the CGST portion of the GST.
- **SGST Account:** Debit the SGST portion of the GST.
- **Bank Account:** Credit the total amount including GST.
**Journal Entry Example:**
```plaintext
Bank Charges Account (Expense) Dr [Total Amount]
CGST Input Tax Credit Account Dr [CGST Amount]
SGST Input Tax Credit Account Dr [SGST Amount]
To Bank Account Cr [Total Amount]
```
### **3. **Purchase Voucher or Journal Voucher:**
- **Purchase Voucher:** If you have a detailed invoice from the bank with GST breakup, it is preferable to create a purchase voucher to capture all the details and ensure proper documentation for claiming input credit.
- **Journal Voucher:** If you only need to record the transaction and the details are straightforward, a journal voucher is sufficient. Ensure you have proper documentation to support the transaction.
### **4. **Impact on GSTR-2:**
- **Inward Supply in GSTR-2:** The transaction will appear in your GSTR-2 as an inward supply. Ensure that the details from your GST invoices are accurately reflected in the return. The input credit claimed will be added to your available credit.
### **5. **Practical Steps:**
1. **Ensure Documentation:** Keep a copy of the bank statement or invoice detailing the cheque return charges and GST.
2. **Input Credit Claim:** Ensure the GST charged is eligible for credit and matches the invoice details.
3. **Reconcile Records:** Reconcile the GST credit claimed with your GSTR-2 to ensure accuracy.
### **Summary:**
You can record the cheque return charges with GST as a journal entry or purchase voucher depending on your preference and documentation. The GST portion can be claimed as input credit in your GST returns, provided you have valid documentation.
Always ensure compliance with the latest GST rules and keep proper records for audit and reconciliation purposes.
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