Transportation sector play important role in our economy. In accounting perspective it has large number of transactions. To record and post goods transport agency accounting transactions one have proper and deep understanding of this business. So here we are discussing how to account a transport agency transaction in books of accounts.
You can learn Goods Transport Agency Accounting under GST with the help of Tally ERP 9. GTA (goods transport agencies) provide transportation services interstate and Intrastate customers, this services fall in under section 9 (3) of GST act and hence attract RCM (Reverse Charge) on it. In this article we learn how to maintain transport company accounts in tally with all GST provisions.
Who is GTA?
Transportation agency, Transport Company also known as GTA goods and transport agency. Offer services of transportation and deliver goods from one place to another place. Any transport company who issue consignment note known as GTA.
GST on GTA-
In GST there is lot of provisions to manage books of accounts for a GTA. When a registered GTA provide transportation services to the customer then GST will be charged on RCM basis (Reverse Charge Mechanism). There is a two option for GTA-
- Opt and charge 5% GST slab with no input tax credit.
- Opt and charge 12% GST slab with total input tax credit available.
RCM on Transport Agency-
GTA service is covered under section 9(3) of GST act so it attracts tax liability on Reverse charge (RCM) basis.
- If a registered GTA provide services to another specified registered person (RD) then RCM applicable and tax paid by registered person according to the place of supply.
- If registered GTA provide services to unregistered person (URD) then RCM applicable and tax paid by GTA himself. Whether transaction is interstate or intrastate place of supply is consider here GTA office location. So in this type of transaction GTA pay tax as CGST and SGST on RCM basis and treat it intrastate transaction.
ITC on GTA Service under GST-
In the beginning if GTA opt 5 % GST option then No Input Tax Credit (ITC) available and if GTA opt 12% GST option then full Input Tax Credit in available.
Transport Agency Accounting in Tally ERP9-
Suppose we are registered goods transport agency GTA and want to charge 5% GST on reverse charge basis to our customers. Let us discuss the process of transport agency accounting in tally with GST.
- Create new company in tally.
- To Enable GST
- Press F11 in Gateway of tally->statutory and Taxation ->Enable Goods and Service Tax (GST)->Yes
- Set alter GST detail->Yes
- Do not enable tax liability on reverse charge option here.
- To record and find out profit and loss on particular transportation service we have to enable cost/profit center management Using cost center option we track all income and expenses on particular truck.
- Press F11-Accounting Feature->set yes to Maintain Cost Center option.
Create Ledgers or Masters
Create 4 Ledger under sundry debtors-
- Local Registered Party
- Interstate Registered Party
- Local unregistered Party
- Interstate unregistered Party
2. Create Ledger for Freight under indirect Income group. Go to set alter GST detail option and set its tax rate 5% and make sure to enable is reverse charge applicable option to it.
3. Create Ledger for GST Tax Ledgers- CGST, SGST and IGST under duties and taxes group.
4. Create some expanses Ledgers- Driver Salary, Diesel Exp. Under Indirect expenses group and make sure to enable cost center option set to yes on these ledgers and GST not applicable.
5. Make a ledger Tax on RCM under indirect expenses to post stat adjustment entries in journal ledger. Make sure set GST not applicable to this ledger.
6. Create Cost Centers-
Create some cost centers for your carriers such as trunk no-1, truck no-2 etc.
7. Accounting Voucher Entries-
- Go to Sales voucher (F8) and change its mode by press Alt + I for item invoice to accounting invoice.
- Post 6 different sales entries-
- Example – goods deliver for local registered party and charge freight Rs.-5000/-
- To view tax analysis press alt + A, it shows tax liability based on RCM basis toward the buyer of our services.
- Make sure to select truck number at cost allocation window.
- Same as above post 3 more entries with same amount for all the parties.
- When you post entries with Interstate unregistered Party then change nature of transaction to sales taxable so tally calculate CGST and SGST otherwise it shows the IGST. As maintained earlier URD interstate transaction also tread as intrastate transaction. So while posting the entries you have to change the place of supply to GTA office location.
Post Entries in which Due Amount Received by Debtors-
Go to Receipt voucher (F6) and post all amount received form debtors entries and adjust theirs due bill or pending bills.
Post Entries in related to expenses-
Example-Paid Driver salary, Diesel Exp. In payment voucher (F5) and allocate cost center i.e. truck numbers for expenses.
To show GSTR Reports-
Go to display->statutory reports->GST->GSTR-1
you can find here all the transaction under B2B invoices-> Reverse charge supplies, B2B Small invoice and nil rated invoice.
Post State Adjustment Entry for Reverse Charge-
As we made transaction to unregistered parties hence their tax liability is paid by us on RCM basis so at this time we have to pass adjustment entry to book tax liability in balance sheet.
In GSTR-1 press alt + J and stat adjustment window appears select nature of adjustment as increase tax liability and additional detail others.
Tax on RCM a/c dr.
Tax paid to department-
to paid GST to department first of all go to balance sheet here you can find amount under duties and taxes in current liability side
Go to payment voucher (F5) and post entry to paid tax to department.
To show Cost /Profit center management report-
Go to display->statement of accounts->cost centers->category summary
you can view here all expenses and income for a particular truck. You can find out how much revenue generated by a particular truck and how much expenses occurred on a particular truck.
To view above process in action please watch below video.