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accounts-ind-com
Level 1

How to pass GST RCM Entry in Quick books. Please help me in this regard.

 
1 Comment 1
MichelleBh
QuickBooks Team

How to pass GST RCM Entry in Quick books. Please help me in this regard.

Hi there, @accounts-ind-com.

 

I've got some details that help you pass the Reverse Charge Mechanism (RCM) entries in QuickBooks Online. Thus, you can pay your service tax as soon as possible. 

 

QuickBooks uses bills or expenses for RCM entries. To start, you'll need to edit the existing service type or create a new one. Let me show you how. 

 

  1. Go to the Sales tab, then choose Product and services
  2. Click the existing service item or the New button on the right side. Then pick Service.
  3. Choose Rent a cab in the Service Type drop-down. 
  4. Check the box which says I purchase this product/service from a supplier.
  5. Type the Reverse charge % in the box. 
  6. Complete the needed fields and tap Save and close

 

After that, I'd recommend creating a sample Purchase bill or Expenses. This way, we can review the entries accordingly. Let me give you the steps.

 

  1. Select the + New on the upper left side. 
  2. Choose either Purchase bill or Expenses
  3. In the Item details, pick the correct service item and complete the necessary information. The charges will calculate automatically. 
  4. Click Save.
  5. Tap More and choose Transaction journal. Ensure this following: 

Credit

  • Bank account
  • Output Service Tax RCM
  • Swachh Bharat Cess Payable
  • Output RCM account

 

Debit

  • Expense account
  • Input Service Tax
  • Input Service Tax RCM
  • Swachh Bharat Cess Expense
  • Input Krishi Kalyan Cess
  • Input Krishi Kalyan Cess RCM

     

    6. Make sure that the Debit and Credit is equal. 

 

For more knowledge, check out this link: How to enter transactions with reverse charge service tax in QuickBooks.

 

Also, I'd recommend consulting an accountant. They can explain and help you adjust the Input Service Tax, Output Service Tax, Input Service Tax RCM against Service Tax Payable. Once the adjustment entry is passed, the correct Service Tax liability will be visible.

 

Check out these articles below to know how the reverse charge mechanism works and when it is applicable in GST Input Tax.

 

 

Do you have questions about other processes? Add them to your reply, and I'll help you as soon as I can. I hope you remain safe and healthy in this unprecedented period.