Accounting Entries for Composition Scheme

ENTRIES FOR PURCHASE

Normal Scheme

We get Input of Purchase, so we show Input in Purchase entry

Entry is 

Purchase Dr

Input CGST Dr

Input  SGST Dr

To Party

For Composition Scheme

We do not get any Input

So we pass Purchase Entry including tax

Purchase Dr

To Party

Example

Purchase Made 20000+500 CGST+500 GST from A

Entry in Normal Scheme will be

Purchase  Dr     20000

Input  CGST Dr   500

Input SGST Dr     500

To A                   21000

Entry in Composition Scheme will be

Purchase  Dr     21000

To A                   21000

ENTRIES FOR SALES

In Normal Scheme, we charge GST From Customer

So in Entry, we show tax separately

Party Dr

To Sales

To Output CGST

To Output SGST

In Composition Scheme, we do not charge GST From Customer

So in Entry, we do not show tax 

Party Dr

To Sales

Example

Sales Made 40000 (Including 5% tax)

Entry in Normal Scheme

Party Dr  40000

To Sales             38095

To Output CGST  952

To Output SGST   952

Entry in Composition Scheme

Party Dr   40000

To Sales             40000

Question

A Person purchases goods form Wholesaler at 100000+5% GST

He sells same for Rs 150000 to customer (tax inclusive)

What is tax Payable under Normal scheme or Composition Scheme?

What is Profit earned in both schemes

What is Entry for Purchase Sales in Normal Scheme

What is Entry for Purchase Sales in Composition Scheme