Meaning of Closing Balance

What is Closing Balance under GST

 

This post explains about Closing Balance, relevance of closing balance in GST 

Closing Balance

Closing Balance is 'The positive or negative amount remaining in an account at the conclusion of an accounting period that will be carried forward to the next period'. A closing balance is the amount remaining in an account within your chart of accounts, positive or negative, at the end of an accounting period or year end.

 Closing entries are journal entries made at the end of an accounting period to transfer temporary accounts to permanent accounts. An "income summary" account may be used to show the balance between revenue and expenses, or they could be directly closed against retained earnings where dividend payments will be deducted from. This process is used to reset the balance of these temporary accounts to zero for the next accounting period.

Relevance of Closing Balance in GST:

Closing balance of the credit in the last returns:

The closing balance of the CENVAT credit/VAT in the last returns filed under the existing law can be taken as credit in electronic credit ledger. Such credit would be available only when returns for the previous last six months have been filed under the existing law. In order to claim this credit, declaration in form GST TRAN 1 is required to be furnished on the common portal within ninety days from the appointed day i.e. the day on which the GST law would come into force.

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