GST & accounting glossary.

Money a business owes to its suppliers for goods or services purchased on credit.

Money owed to a business by its customers for goods or services sold on credit.

A statement of a business’s assets, liabilities and equity at a point in time, where assets equal liabilities plus equity.

The process of matching a business’s book records against its bank statement to confirm they agree.

The movement of cash into and out of a business over a period, distinct from accounting profit.

The two equal halves of GST charged on an intra-state supply — Central GST collected by the centre and State GST collected by the state.

The organised list of all ledger accounts a business uses to classify its transactions.

A simplified GST option for small taxpayers to pay tax at a flat rate on turnover, with reduced compliance and no input tax credit.

The direct cost of the goods a business sold during a period, subtracted from revenue to find gross profit.

A document a seller issues to reduce the value of a previous invoice — for returns, discounts or corrections — reversing the related GST.

The two sides of every accounting entry; debits and credits must be equal for each transaction.

A document that increases the value of a previous invoice — for undercharges or additional supply — adding the related GST.

A bookkeeping method in which every transaction is recorded in at least two accounts, with total debits equal to total credits.

A GST invoice reported to the government portal and stamped with an Invoice Reference Number (IRN) and QR code.

An electronic document required for the movement of goods above a notified value, generated on the e-way bill portal.

A stock valuation method that assumes the earliest-purchased items are sold first.

The complete record of all financial transactions of a business, organised by account, from which the financial statements are produced.

India’s unified, destination-based indirect tax on the supply of goods and services, levied at each stage with credit for tax paid on inputs.

The 15-character GST Identification Number that uniquely identifies a registered taxpayer in a particular state.

The return reporting a taxpayer’s outward supplies (sales) for a tax period, filed monthly or quarterly.

A static, auto-drafted statement of the input tax credit available to a buyer for a period, based on suppliers’ filings.

A summary self-assessment return where a taxpayer declares total liabilities and input tax credit, and pays the net tax.

The annual GST return consolidating a financial year’s supplies, taxes and input tax credit for eligible taxpayers.

A standardised numeric code that classifies goods for taxation, determining the applicable GST rate.

A single GST component charged on inter-state supplies and imports, collected by the centre and later apportioned to the destination state.

A direct tax levied on the income or profits of individuals and businesses for a financial year.

The credit a business claims for GST paid on its purchases, set off against the GST it collects on sales.

The basic record of a transaction in accounting, capturing the accounts debited and credited and the amounts.

A ten-character alphanumeric identifier issued by the Income Tax Department to track financial transactions.

The rules that determine where a supply is deemed to occur, and therefore whether CGST/SGST or IGST applies.

A statement summarising income and expenses over a period to show the net profit or loss.

The stock quantity at which a business should reorder an item to avoid running out before new stock arrives.

A scenario where the recipient of a supply, rather than the supplier, is liable to pay GST to the government.

The Services Accounting Code that classifies services for GST and determines the applicable rate.

The process of assigning a monetary value to inventory on hand, using a method such as FIFO or weighted average.

Tax collected by a seller from the buyer on certain transactions and deposited with the government.

Income tax deducted by a payer at the time of certain payments and deposited with the government on the payee’s behalf.

A statement listing the closing balances of all ledger accounts to check that total debits equal total credits.

A stock valuation method that costs each unit at the average cost of all units available.