I can't understand last three steps. Mar31 concept of output & Input gst

Dear Student,

Input tax (be it CGST, SGST or IGST) reflects tax paid by us to the suppliers in respect of goods purchased from them. This is an expense.
Output tax (be it CGST, SGST or IGST) reflects tax collected by us from the customers in respect of goods sold to them. This is a liability (to be paid to the government).

Now, an important point to note here is that, the actual tax liability towards the government is determined after adjusting the paid tax from the collected tax and only the balance amount is paid to the government.

For example, if tax paid is Rs 100 and tax collected is Rs 130, then only Rs 30 shall be paid to the government (not entire collected amount of Rs 130)​​​. In other words, we can say that input tax (tax paid) is adjusted against the output tax (tax collected).

Now, the entries in the image are for the adjustment of input tax against the output tax.

Entry 1: The CGST and IGST paid are adjusted against the CGST collected.

Entry 2: The IGST paid is adjusted against the IGST collected

Entry 3: The SGST and IGST paid are adjusted against the SGST collected and the balance amount is paid to the government (because tax collected must be more than the tax paid in this case).

The rules for settlement are explained in detail in the study material, please follow the below link to go through the same (topic: GST Common Set Off Procedure).


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It is the entry to set of gst in the books,now the rule is as such .Input IGST will be set off against Output IGST and if any balance left there after will be adjusted against input/output cgst first the any further left balances will be adjusted against sgst.And input cgst,sgst will set off against them first. If any balance left the first cgst will be get set off with igst and the sgst will be set off against IGST ,input or output will depend upon the situation. And the left balances will be paid by bank entry. This will vary in different situations if u have any queries bring the questions. Thanx
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