by Capital goods are assets that businesses purchase for long-term use, typically to facilitate production, expansion, or improvement of their operations. Under the GST framework, capital goods are treated differently than other supplies and services because of their significant value and long-term nature.
Your business purchases a new industrial machine for Rs. 5,00,000 for use in your manufacturing facility. The applicable GST rate is 18%. Here’s how you would record this capital goods purchase entry in Tally Prime:
- Record the purchase entry in Tally Prime:
- Debit: Capital Goods Account (Industrial Machine) – Rs. 5,00,000
- Credit: Supplier’s Account – Rs. 5,00,000
- GST (18%) – Rs. 90,000
- Verify that the purchase entry is correctly recorded.
- Ensure that the Input Tax Credit for the GST paid on the capital goods is claimed accurately in your financial records.
