As per Section 2(59) of GST Act, 'input' means any goods other than capital goods used or intended to be used by a supplier in the course of furtherance of business. The computers, laptops etc., used by the applicant for providing output service are capital assets.
Any goods (including capital goods) and any input services used or intended to be used by a provider of goods or services of both in the course of or furtherance of business is eligible for input tax credit.
From this we can understand that Section 16 of IGST Act, 2017 entitles the person making zero-rated supplies to claim refund of input tax credit on inputs, input services and capital goods. Therefore, even this implies that Section 54 also entitles the refund of input tax credit on Capital Goods.
The Para refers to “assets of a business”, which may be current assets or fixed assets. Therefore any loss or damage of such assets due to reasons such as accident, fire, natural calamity, theft etc. will not be covered and hence will not be treated as supply and should not attract GST.
On a perusal of the said provisions, it is deduced that law does not restrict the refund of ITC on capital goods in case of exports made under LUT. But as per the CGST Rules, the situation is not so. Rule 89 lays down the procedure and the formula to be adopted for availing the refund under GST.
Capital goods are tangible assets such as buildings, machinery, equipment, vehicles and tools that an organization uses to produce goods or services in order to produce consumer goods and goods for other businesses. ITC Rules for Capital Goods under GST.
SImilarly, when you are purchasing any machinery for your factory, you will pay the applicable GST rate. This GST paid can be claimed as credit in the same way as inputs. However, if you claim depreciation on the GST paid while purchasing the capital asset, you cannot claim input tax credit.
ITC on Capital Goods shall not be allowed in following cases: If depreciation has been claimed on the tax portion i.e. if tax portion is capitalized with the value of capital good as benefit shall not be available twice. Goods or Services used for construction of immovable property (construction of building)
Records and accounts to be maintained under the GST regimeDetails of sales - Details of all the outward supplies sold by the taxpayer, including the name and address of the buyer. Output tax paid - The GST paid either by availing of input tax credit or in cash.
To account a fixed asset purchase in tally, normally we use journal voucher in earlier versions of tally. But now you can use purchase voucher to enter purchase of fixed assets in latest versions of tally ERP9.
Capital goods are physical assets that a company uses in the production process to manufacture products and services that consumers will later use. Capital goods include buildings, machinery, equipment, vehicles, and tools. Capital goods are not finished goods instead; they are used to make finished goods.
Fixed assets are the assets, which are responsible to generate revenue for business. They are the assets which are owned by the company like plant and equipment and are reported in the balance sheet as non-current assets under the headings, property, plant and machinery.
- Go to Gateway of Tally > Accounting Vouchers > F9 Purchase.
- In Party A/c name column, select the supplier's ledger or the cash ledger.
- Select the relevant purchase ledger.
- Select the required items, and specify the quantities and rates.
- In case of local purchase, select the central and state tax ledger.
A contra entry is recorded when the debit and credit affect the same parent account and resulting in a net zero effect to the account. These are transactions that are recorded between cash and bank accounts.
Go to Gateway of Tally > Accounts Info. > Ledgers > Alter > Press Alt+D . Note: You can delete the ledger if no vouchers have been created under it. If you want to delete a ledger for which vouchers have been created, you have to first delete all the vouchers from that ledger and then delete the ledger account.
1. Go to Gateway of Tally > Audit & Compliance > Audit & Analysis > Other Analysis > Fixed Assets Analysis .
Definition. A ledger group is a combination of standard ledgers for the purpose of applying the functions and processes of General Ledger Accounting to the group as a whole.
The three types of ledgers are the general, debtors, and creditors. The general ledger accumulates information from journals.
Direct Expenses: Direct expenses are those expenses that are paid only for the business part of your home. Indirect Expenses: Indirect Expenses are those expenses that are paid for keeping up and running your entire home. Examples of indirect expenses generally include insurance, utilities, and general home repairs.
Create ledgers in Tally
- Step 1: Goto Gateway of Tally and Choose Accounts Info.
- Step 2: Under account info, choose the option Ledgers.
- Step 3: Click on create under multiple ledgers option to create multi ledgers in Tally.
- Step 4: On multi ledger creation screen, enter the following details.
Direct income is one which is earned directly by way of business activities. Example: Salaried, Professionals. Indirect income is one which is earned by way of non-business activities. For example, sale of old newspapers, sale of carton boxes, etc.
If the first digit is '0' or '1', the Head of Account will represent Revenue Receipt. Adding 2 to the first digit of the Revenue Receipt will give the Code Number allotted to corresponding Revenue Expenditure Head; adding another 2—the Capital Expenditure Head and another 2—the Loans and Advances Head of Accounts.
Create Single Stock Groups
- Go to Gateway of Tally > Inventory Info. >
- Enter the Name of the Stock Group.
- Enter additional name apart from primary name [if required] in the field Alias .
- Specify whether it is a primary group or a sub-group of another group in the field Under , by selecting from the list.
List of Tally Ledgers for Profit & Loss Account
| Ledger name | Tally Head |
|---|
| Insurance premium | Indirect Expenses |
| Interest on loan | Indirect Expenses |
| Legal charge | Indirect Expenses |
| Loss by fire | Indirect Expenses |
The Profit & Loss A/c is a periodic statement, which shows the net result of business operations for a specified period. All the expenses incurred and incomes earned during the reporting period are recorded here. The Profit and Loss Account in Tally. ERP 9 displays information based on the default primary groups.
The default value of the position index for all ledgers within a group is always 1000 . You can view the position index of ledgers in the Ledger Alteration screen. To view the position index of ledgers and its use in display of reports. 1. Go to Gateway of Tally > Accounts Info. >
But tally provides only 2 ledger account in tally software and its names are cash are profit and loss account . Group is head category or it is base of ledger creation . So , Main group is commerce and and all other are called ledger accounts but under this commerce group .
Primary Groups: Primary Group in Tally is main group, Groups are structured as hierarchical organization. At the top of hierarchy are primary groups. Among 15 primary groups, 9 groups are balance sheets items and 6 groups are profit and loss a/c items.
There are 34 Predefined groups are there in Tally ERP 9. Some of them are Bank Accounts, Current Asset, Secured Loan, Indirect Expense etc. Apart from these pre-defined Groups tally allow us to create under these main groups.
Indirect expenses are those expenses that are incurred to operate a business as a whole or a segment of a business, and so cannot be directly associated with a cost object, such as a product, service, or customer. Examples of indirect expenses are: Accounting, audit, and legal fees.
Which reports are prepared monthly in Tally?
- A. Profit & Loss A/C.
- Balance Sheet.
- Trial Balance.
- Cash Flow of Funds Flow.
Examples of indirect expenses
- salaries.
- facility insurance.
- equipment depreciation.
- equipment maintenance.
- rent.
- utilities.
- office supplies.
- advertising.
To write off an invoice or outstanding amount as a bad debt go to Sales > Select the invoice > Click the Refund button at the bottom. On the next page click Write this invoice off as a bad debt, you'll then be asked to confirm the bad debts code.
