Purchases Day Book With GST, Carriage, and Net Invoice

A Purchases Day Book question can look like a crowded railway platform.

There is a list price, a trade discount, carriage, GST, an invoice total, and perhaps three different tax columns. Every amount seems to be waiting for a place, and one wrong turn can make the whole row disagree.

The solution is to stop treating the invoice as one large calculation.

Think of it as a journey through four stations:

1. Find the price of the goods after trade discount.
2. Add carriage charged on the same invoice, if any.
3. Calculate GST on the taxable value given by the invoice.
4. Add everything the buyer owes to find the net invoice amount.

Each stage has its own meaning. Once you keep those meanings separate, the columns almost fill themselves.

Let us build the format carefully and then solve complete examples.

What Is a Purchases Day Book?

The Purchases Day Book, also called the Purchases Book or Purchases Journal, is a book of original entry used for credit purchases of goods.

That definition contains three tests:

• there must be a purchase
• the purchase must be on credit
• the item must be goods in which the business deals

Suppose a stationery dealer buys notebooks on credit. Notebooks are trading goods, so the transaction belongs in the Purchases Day Book.

If the same dealer buys a cupboard on credit for office use, the cupboard is an asset, not trading goods. That transaction goes to Journal Proper.

If the dealer buys notebooks and pays immediately by cash or bank, it is a cash purchase. It goes to the Cash Book, not the Purchases Day Book.

If choosing between subsidiary books is still confusing, first revise this simple guide to selecting the correct subsidiary book.

The Source Document Is the Supplier’s Invoice

A credit purchase is recorded from the invoice received from the supplier. The invoice normally helps you identify:

• the invoice number and date
• the supplier’s name
• the goods, quantities, and rates
• trade discount
• packing, freight, or carriage charged by the supplier
• taxable value
• CGST and SGST, or IGST
• the final amount payable

This is why the invoice number appears in the Purchases Day Book. It creates a trail from the summary entry back to the original document.

Do not replace the invoice number with a voucher number unless the format or question specifically asks for one.

The Four Amounts Students Must Not Mix

Most mistakes disappear when you give each amount a distinct name.

Amount	How it is found	What it means
List price	Quantity multiplied by quoted rate	Price before trade discount
Net goods value	List price less trade discount	Recorded value of the goods
Taxable value	Net goods value plus taxable carriage or other invoice charges	Base on which GST is calculated
Net invoice amount	Taxable value plus GST	Total amount credited to the supplier

In formula form:

Net goods value = List price - Trade discount

Taxable value = Net goods value + Carriage charged on the invoice

Net invoice amount = Taxable value + CGST + SGST
or
Net invoice amount = Taxable value + IGST

The phrase net invoice is sometimes used loosely in questions. A printed format may use it for the final amount payable, while another working note may call the value after trade discount the net purchase value.

So do not depend on the word net alone. Look at what the column must contain.

In this guide:

• net goods value means the amount after trade discount but before carriage and GST
• net invoice amount means the final amount payable to the supplier

That language keeps the two figures from getting mixed up.

A Useful Analytical Purchases Day Book Format

When GST and carriage must be shown separately, the Purchases Day Book can be prepared with analytical amount columns.

Date	Invoice No.	Supplier	L.F.	Purchases	Carriage Inwards	Input CGST	Input SGST	Input IGST	Net Invoice

Here is what each amount column carries:

Column	Amount entered
Purchases	Net value of trading goods after trade discount
Carriage Inwards	Carriage related to bringing purchased goods in, when separately analysed from the same invoice
Input CGST	Central tax on an eligible same-state purchase
Input SGST	State tax on an eligible same-state purchase
Input IGST	Integrated tax on an eligible inter-state purchase
Net Invoice	Full amount owed to the supplier

Not every exercise gives all these columns. Use the headings printed in your question. The logic stays the same even when the layout is shorter.

Where Trade Discount Goes

Trade discount is deducted before the transaction is recorded.

Suppose goods have a list price of Rs. 80,000 and the supplier allows 10 percent trade discount.

List price                                  Rs. 80,000
Less: Trade discount at 10 percent          Rs.  8,000
Net goods value                             Rs. 72,000

The Purchases column receives Rs. 72,000, not Rs. 80,000.

There is no separate Trade Discount column in the standard Purchases Day Book because trade discount is not posted to a separate ledger account. It is shown in the details or working and then removed before the recorded value is found.

If you want a fuller explanation of why this discount disappears before the entry, read trade discount versus cash discount in journal entries.

Where Carriage Goes

Carriage inward is the cost of bringing purchased goods into the business. It is connected with acquiring the goods, so it contributes to their cost.

But its place in a question depends on who charged it and where it appears.

Case 1: The supplier charges carriage on the same invoice

If the supplier adds carriage to the purchase invoice, it forms part of the amount owed to that supplier.

In a detailed Purchases Day Book, show it in the Carriage Inwards column. Add it to the goods value before calculating GST when the invoice treats it as part of taxable value.

Case 2: The buyer pays carriage separately

Suppose the goods invoice comes from one supplier, but the buyer later pays a transporter in cash. That payment is a separate transaction.

It does not become part of the supplier’s row in the Purchases Day Book. Record the separate cash payment in the Cash Book, with Carriage Inwards Account debited.

Case 3: The amount is carriage outward

Carriage outward is the cost of delivering goods sold to customers. It is a selling expense, not a purchase cost. It does not belong in the Purchases Day Book.

Wording in the question	Treatment
Carriage charged by supplier on purchase invoice	Include in supplier invoice and analyse as carriage inward
Carriage paid separately in cash to transporter	Record separately in Cash Book
Carriage paid on goods sold	Treat as carriage outward, not a purchase entry

Choosing CGST and SGST or IGST

For the usual classroom question, the location of the supplier and the place of supply guide the tax columns.

Nature of supply	Tax columns used
Same-state supply	Input CGST and Input SGST
Inter-state supply	Input IGST

If the total GST rate for a same-state purchase is 18 percent, it is commonly split into:

CGST = 9 percent
SGST = 9 percent

For an inter-state purchase at 18 percent:

IGST = 18 percent

Do not put an amount in all three columns for one ordinary purchase. A row normally uses either CGST plus SGST or IGST.

For a stronger foundation on input and output tax, see this step-by-step guide to GST journal entries.

Solved Example 1: Same-State Purchase With Trade Discount and Carriage

Mira Stationers buys trading goods on credit from Riverstone Papers, a supplier in the same state.

List price of goods                         Rs. 1,20,000
Trade discount                              10 percent
Carriage charged on the invoice             Rs.    2,000
GST                                         18 percent
Invoice number                              RP-418

Step 1: Find the net goods value

List price                                  Rs. 1,20,000
Less: Trade discount at 10 percent          Rs.   12,000
Net goods value                             Rs. 1,08,000

Step 2: Find the taxable value

Net goods value                             Rs. 1,08,000
Add: Carriage charged by supplier           Rs.    2,000
Taxable value                               Rs. 1,10,000

Step 3: Calculate GST

Because this is a same-state purchase, the 18 percent GST is split equally.

Input CGST at 9 percent                     Rs. 9,900
Input SGST at 9 percent                     Rs. 9,900

Step 4: Find the net invoice amount

Taxable value                               Rs. 1,10,000
Add: Input CGST                             Rs.    9,900
Add: Input SGST                             Rs.    9,900
Net invoice amount                          Rs. 1,29,800

Entry in the Purchases Day Book

Date	Invoice No.	Supplier	L.F.	Purchases	Carriage Inwards	Input CGST	Input SGST	Input IGST	Net Invoice
Sep. 4	RP-418	Riverstone Papers		Rs. 1,08,000	Rs. 2,000	Rs. 9,900	Rs. 9,900		Rs. 1,29,800

Now check the row:

Rs. 1,08,000 + Rs. 2,000 + Rs. 9,900 + Rs. 9,900
= Rs. 1,29,800

The analytical columns agree with the supplier’s total. That agreement is your best error check.

Journal logic behind the row

The day book is a compact form of this entry:

Particulars	Debit	Credit
Purchases A/c Dr.	Rs. 1,08,000
Carriage Inwards A/c Dr.	Rs. 2,000
Input CGST A/c Dr.	Rs. 9,900
Input SGST A/c Dr.	Rs. 9,900
To Riverstone Papers A/c		Rs. 1,29,800

You usually do not write this journal entry when the question asks for the Purchases Day Book. It is shown here so that every column has a reason.

Solved Example 2: Inter-State Purchase With IGST

Mira Stationers buys goods on credit from Northstar Supplies in another state.

List price                                  Rs. 80,000
Trade discount                              5 percent
Carriage charged on invoice                 Rs. 1,500
IGST                                        12 percent
Invoice number                              NS-205

Working

List price                                  Rs. 80,000
Less: Trade discount at 5 percent           Rs.  4,000
Net goods value                             Rs. 76,000
Add: Carriage                               Rs.  1,500
Taxable value                               Rs. 77,500
Add: IGST at 12 percent                     Rs.  9,300
Net invoice amount                          Rs. 86,800

Entry in the Purchases Day Book

Date	Invoice No.	Supplier	L.F.	Purchases	Carriage Inwards	Input CGST	Input SGST	Input IGST	Net Invoice
Sep. 12	NS-205	Northstar Supplies		Rs. 76,000	Rs. 1,500			Rs. 9,300	Rs. 86,800

Only Input IGST is used. The CGST and SGST columns remain blank.

Solved Example 3: Carriage Paid Separately

Mira Stationers buys goods on credit from Brightline Traders in the same state.

List price                                  Rs. 50,000
Trade discount                              10 percent
GST                                         18 percent
Carriage later paid in cash to QuickMove    Rs. 1,200

First record the supplier’s invoice.

List price                                  Rs. 50,000
Less: Trade discount at 10 percent          Rs.  5,000
Taxable value                               Rs. 45,000
Input CGST at 9 percent                     Rs.  4,050
Input SGST at 9 percent                     Rs.  4,050
Net invoice amount                          Rs. 53,100

The Purchases Day Book row is:

Date	Invoice No.	Supplier	L.F.	Purchases	Carriage Inwards	Input CGST	Input SGST	Input IGST	Net Invoice
Sep. 18	BT-611	Brightline Traders		Rs. 45,000		Rs. 4,050	Rs. 4,050		Rs. 53,100

The Rs. 1,200 paid to QuickMove does not enter this row. It is recorded separately in the Cash Book:

Particulars	Debit	Credit
Carriage Inwards A/c Dr.	Rs. 1,200
To Cash A/c		Rs. 1,200

This is an important distinction. Carriage still increases the cost of bringing the goods in, but it does not increase Brightline Traders’ balance because Brightline did not charge it.

A Complete Monthly Purchases Day Book

Now combine three credit invoices for Mira Stationers.

Date	Invoice No.	Supplier	L.F.	Purchases	Carriage Inwards	Input CGST	Input SGST	Input IGST	Net Invoice
Sep. 4	RP-418	Riverstone Papers		Rs. 1,08,000	Rs. 2,000	Rs. 9,900	Rs. 9,900		Rs. 1,29,800
Sep. 12	NS-205	Northstar Supplies		Rs. 76,000	Rs. 1,500			Rs. 9,300	Rs. 86,800
Sep. 24	BT-722	Brightline Traders		Rs. 48,000		Rs. 1,200	Rs. 1,200		Rs. 50,400
Sep. 30		Total		Rs. 2,32,000	Rs. 3,500	Rs. 11,100	Rs. 11,100	Rs. 9,300	Rs. 2,67,000

The final check is:

Purchases                                   Rs. 2,32,000
Carriage Inwards                            Rs.    3,500
Input CGST                                  Rs.   11,100
Input SGST                                  Rs.   11,100
Input IGST                                  Rs.    9,300
Total analytical columns                    Rs. 2,67,000

Total of Net Invoice column                 Rs. 2,67,000

Both sides agree.

That is not a coincidence. The net invoice column is the total creditor amount, while the other columns explain what makes up that amount.

How to Post the Purchases Day Book to the Ledger

Posting follows the same two-story idea.

Post each supplier individually

Every supplier is credited with the net invoice amount of that supplier’s row.

Supplier	Amount credited
Riverstone Papers	Rs. 1,29,800
Northstar Supplies	Rs. 86,800
Brightline Traders	Rs. 50,400

The supplier is credited because the business owes that amount.

Post each analytical column total

At the end of the period:

• debit Purchases Account with Rs. 2,32,000
• debit Carriage Inwards Account with Rs. 3,500
• debit Input CGST Account with Rs. 11,100
• debit Input SGST Account with Rs. 11,100
• debit Input IGST Account with Rs. 9,300

These debit totals together equal the Rs. 2,67,000 credited to all suppliers.

The L.F. column can be filled with ledger folio references after posting. It is not another amount column.

What if the Format Has No Separate Carriage Column?

This is where students sometimes think two books are giving opposite answers.

The truth is that Purchases Day Book formats can be designed with different levels of analysis. A short format may have only one amount column. A GST format may separate purchases and input taxes. A more detailed format may also separate carriage inward.

Use these priorities:

1. Follow the column headings given in the question.
2. Show the full invoice working in the Details column or as a working note.
3. Make sure the final supplier amount equals all applicable components.
4. Keep recoverable GST separate from the purchase value.
5. If carriage has its own column, do not bury it inside Purchases.

If a supplied format has only Purchases, GST, and Total columns, follow the expected classroom treatment for that format. Your working should still clearly show the goods value, carriage, taxable value, tax, and amount payable.

The purpose of the columns is analysis. The purpose of the total is control. Neither should be lost.

When an Invoice Has More Than One GST Rate

Sometimes one invoice contains items taxed at different rates.

Do not apply one convenient rate to the whole invoice unless the question clearly allows it. Work item by item:

1. calculate the net value of each group after its trade discount
2. add or allocate invoice charges as instructed
3. apply the correct rate to each taxable group
4. combine the tax amounts under the correct GST columns
5. check the final invoice total

In most introductory questions, a single rate is provided so that the focus remains on the book format. If several rates appear, your invoice working becomes even more important.

A Fast Decision Test for Mixed Transactions

Use this table before preparing the book.

Transaction	Purchases Day Book?	Reason
Bought trading goods on credit	Yes	Credit purchase of goods
Bought trading goods for cash	No	Cash Book transaction
Bought machinery on credit	No	Asset purchase, so Journal Proper
Bought office stationery on credit	Usually no	Expense item unless stationery is the business’s trading goods
Returned goods to supplier	No	Purchases Return Book
Supplier charged carriage on the same goods invoice	Yes, as part of that invoice	Amount is owed to the supplier
Paid a transporter separately by bank	No	Separate Cash Book transaction
Received cash discount while paying supplier	No	Settlement transaction in Cash Book

Notice how the word purchase is not enough. You must identify the item, the payment terms, and the document.

The Seven-Step Method for Any Question

When the question feels crowded, follow the same route every time.

Step 1: Select only eligible transactions

Keep credit purchases of trading goods. Remove cash purchases, asset purchases, returns, and separate expenses.

Step 2: Identify the supplier and invoice number

Each eligible invoice normally creates one row.

Step 3: Calculate the list price

For every item:

Quantity x Rate = List price

Add the item values if the invoice has several goods.

Step 4: Deduct trade discount

The result is the net goods value for the Purchases column.

Step 5: Add invoice carriage

Add carriage charged by the supplier when the invoice includes it in taxable value. Put it in the Carriage Inwards column if one is provided.

Step 6: Calculate the correct GST

Use Input CGST and Input SGST for the ordinary same-state case, or Input IGST for the ordinary inter-state case.

Step 7: Prove the row

Add the purchases, carriage, and applicable GST columns. The result must equal the net invoice amount.

Common Mistakes and Their Fixes

Mistake	Why it goes wrong	Correct habit
Recording a cash purchase	The book is only for credit purchases	Move it to Cash Book
Recording furniture bought on credit	Furniture is an asset for most traders	Use Journal Proper
Entering list price in Purchases	Trade discount has not been removed	Record net goods value
Creating a Trade Discount Account	Trade discount is not separately recorded	Show it only in working
Calculating GST before deducting trade discount	The tax base becomes too high	Deduct invoice discount first
Leaving supplier carriage out of the invoice total	Creditor balance becomes too low	Add invoice carriage before finding total
Putting separate cash carriage in supplier’s row	Supplier is credited with an amount not owed	Record that payment separately
Using CGST, SGST, and IGST together	Ordinary supply uses the wrong tax pattern	Choose one tax route
Crediting supplier with taxable value only	GST is also payable to the supplier	Credit the full net invoice
Posting every purchase separately to Purchases A/c	The advantage of the day book is lost	Post the column total periodically

How to Check Your Answer in One Minute

Before you finish, run these five checks.

The eligibility check

Every row must be a credit purchase of trading goods.

The discount check

The Purchases column must show value after trade discount.

The carriage check

Carriage charged on the invoice must be part of the invoice route. Separately paid carriage must stay separate.

The tax check

Each row must use either CGST plus SGST or IGST, as applicable.

The agreement check

For each row and for the final totals:

Purchases + Carriage + Input GST = Net Invoice

If the two sides do not agree, inspect the order of discount, carriage, and GST. That is where the error usually sits.

Quick Practice

Try these without looking at the answers first.

Question 1

Goods with a list price of Rs. 40,000 are bought on credit within the same state. Trade discount is 10 percent and GST is 18 percent. There is no carriage.

Find the Purchases, Input CGST, Input SGST, and Net Invoice amounts.

Question 2

Goods worth Rs. 60,000 after trade discount are bought from another state. The supplier charges carriage of Rs. 2,000 and IGST is 12 percent.

Find the taxable value, Input IGST, and Net Invoice amount.

Question 3

A business buys goods on credit from Tara Traders. It separately pays Rs. 900 carriage in cash to a transporter. Should Rs. 900 appear in Tara Traders’ Purchases Day Book row?

Question 4

A cloth dealer buys an office computer on credit. Does the transaction go to the Purchases Day Book?

Answers

1. Purchases: Rs. 36,000; Input CGST: Rs. 3,240; Input SGST: Rs. 3,240; Net Invoice: Rs. 42,480.
2. Taxable value: Rs. 62,000; Input IGST: Rs. 7,440; Net Invoice: Rs. 69,440.
3. No. The Rs. 900 is a separate cash payment and goes to the Cash Book as Carriage Inwards.
4. No. The computer is an asset for the cloth dealer, so the credit purchase is recorded in Journal Proper.

Trusted References for Further Reading

The accounting foundation in this guide follows the official NCERT chapter on Recording of Transactions II, which explains that the Purchases Journal records credit purchases of goods and shows how analytical GST columns work.

The treatment of discounts and invoice charges follows the Central Goods and Services Tax Act and the government’s guide to valuation under GST. For the accounting meaning of inward freight as part of inventory cost, see ICAI’s Accounting Standard 2 on valuation of inventories.

Frequently Asked Questions

What is recorded in a Purchases Day Book?

It records credit purchases of goods in which the business normally trades. It does not record cash purchases, credit purchases of assets, or purchase returns.

Is Purchases Day Book the same as Purchases Journal?

Yes. Purchases Day Book, Purchases Book, and Purchases Journal are commonly used names for the special book that records credit purchases of goods.

Is trade discount shown in the Purchases Day Book?

Trade discount may be shown in the details or working, but it is not entered in a separate amount column or posted to a Trade Discount Account. The Purchases column shows the goods value after deducting it.

Is GST calculated before or after trade discount?

When the trade discount is recorded on the invoice and reduces taxable value, deduct it first. GST is then calculated on the taxable value after the discount and applicable invoice charges.

Is carriage included before calculating GST?

When the supplier charges carriage on the same invoice and includes it in taxable value, add it before calculating GST. Always follow the information shown in the question or invoice.

What if carriage is paid separately by the buyer?

Record it as a separate transaction. If it is paid by cash or bank to a transporter, it goes to the Cash Book and does not increase the amount credited to the goods supplier.

What is entered in the Purchases column?

Enter the net value of trading goods after trade discount. If carriage has a separate analytical column, keep it out of Purchases and show it in that column.

What is the net invoice amount?

In the format used here, it is the final amount owed to the supplier. It equals purchases value plus invoice carriage plus the applicable GST.

When are Input CGST and Input SGST used?

They are used for the ordinary same-state purchase when input credit is available. The total GST rate is divided between the two taxes.

When is Input IGST used?

It is used for the ordinary inter-state purchase when input credit is available. In that row, the CGST and SGST columns remain blank.

How is the Purchases Day Book posted to the ledger?

Credit each supplier individually with the net invoice amount. At the end of the period, debit Purchases, Carriage Inwards, and the applicable Input GST accounts with their respective column totals.

What is the quickest way to check a Purchases Day Book row?

Add the Purchases, Carriage Inwards, and applicable Input GST amounts. Their sum must equal the Net Invoice amount credited to the supplier.