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Reg : tran credit

chandra (acco) (101 Points)

02 October 2018

Respected sirs

I have got tran 1 credit in my gst ledger as per the tally they are saying it should be under current assets but auditor saying it should be under income . any advice how to show this transaction in income tax

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Sundararajan S (Final Student of ICAI) (1764 Points)
Replied 02 October 2018

If you have taken it under profit and loss in earlier(added with purchase) regime(VAT/CE) then it's credit in profit and loss(reduction of purchase amount) and transitional ITC debit(grouped in current Assets).

Transitional ITC....Dr. (Current Asset)
To Purchase or Transitional credit received (Indirect income)

In earlier regime, if you have taken in balance sheet as current Assets, then no issues, just pass journal

Transitional credit Dr.
To ITC c/f under VAT/CE
both ledgers grouped under current Assets.

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chandra (acco) (101 Points)
Replied 02 October 2018

is it compulsary to follow old regime because the itc which i got through is 2.5L and auditor is saying have to additional 50000(20%slaB) + late fees for not paying advance tax

Sundararajan S (Final Student of ICAI) (1764 Points)
Replied 02 October 2018

Yes, if you have kept input tax in profit and loss before GST means, you have to credit profit and loss. no other go. and obviously you have to bear the additional income tax. but see the benefit of credit received in GST.