Monthly Adjustment Entries - GST, TDS, ESI & PF upon Filing Returns

Needless to say, in any business it is common to maintain the books of accounts in a complete and proper manner. Proper maintenance of books gives a true picture financial positions of the entity and also various benefits can be seen like, vendor management, debtors management, complying all the statutory responsibilities etc.


As part of maintenance of books, we will see now how the entries shall be passed after the filing of monthly statutory returns and the importance of it.


GST (Goods and service tax):

Output liability will be increased and input credit will be increased upon passing of Sales and Purchase and expenses entries in the books. And since monthly filing of GST is a compulsory responsibility of all the assesses, there might be outflow of GST payment after adjusting Input credit available in the books.


To this effect, to know the credit available in the books for adjusting against GST Liability and to know the net output tax liability considering opening dues if any, we should pass monthly adjustment entries in the books upon filing of returns to know the exact status at any point of time.


Entries likely to be passed:


A) GST Payable Entry

Output IGST/CGST/SGST A/c Dr

. To Input IGST/CGST/SGST A/c

. To GST Payable A/c

(Entry to be passed as per the return)


B) GST Payment Entry(If GST payable is there).

GST Payable A/c Dr

. To Bank A/c


Note: Values shall be entered as per return. It ensures ITC amount as per return and accounting software will be same and differences if any shall be rectified in the next month return.


TDS (Tax deducted at source)

Similarly as explained above, to know the TDS liability consideriing opening dues or excess paid in previous months, we should pass monthly entries upon payment of TDS and filing of returns on a quarterly basis.


Entries likely to be passed:


A) Payable Entry(Stat Adjustment)

TDS u/s 194A/194C/194H/194I/194J/192B

Interest on TDS A/c Dr

. To TDS Payable A/c

B) TDS Payment Entry

TDS Payable A/c Dr

. To Bank A/c


ESI & PF (Employee Provident Fund & State Insurance):


Entries likely to be passed:

A) Employee Contribution

Salary and Bonus A/c Dr

. To Salary Payable A/c

. To ESI Employee Contribution A/c

. To EPF Employee Contribution A/c

B) Employer Contribution

ESI Employer Contribution A/c Dr

EPF Employer Contribution A/c Dr

. To ESI Payable A/c

. To EPF Payable A/c


C) Transfer of Employee Cont'n to Payable a/c

ESI Employee Contribution A/c Dr

EPF Employee Contribution A/c Dr

. To ESI Payable A/c

. To EPF Payable A/c


C) Payment Entry

ESI Payable A/c Dr

EPF Payable A/c Dr

. To Bank A/c


Passing all the above entries shows the books of accounts with the clear picture of statutory position pertains to entity.

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