Sales Day Book With GST and Trade Discount: Solved Format

You have calculated the customer’s bill correctly. The total is Rs 21,240. Then the question asks how much to credit to Sales Account, and suddenly that same number feels less certain.

That hesitation is useful. A customer’s bill and the business’s sales revenue are different amounts when GST is charged separately.

In this guide, we will build four original invoices, put them into one Sales Day Book, and follow the amounts into the ledger. By the end, you should be able to explain every column rather than simply copy a format.

What belongs in the Sales Day Book?

The Sales Day Book, also called the Sales Book or Sales Journal, records credit sales of trading goods. Use the seller’s copy of the sales invoice as the source document. Cash sales belong in the Cash Book; credit sales of fixed assets belong in Journal Proper. These are the basic distinctions in NCERT’s Recording of Transactions II, Section 4.4.

Try the rule from the perspective of a furniture dealer:

Transaction	Correct book	Reason
Dining tables from stock sold on credit	Sales Day Book	Credit sale of trading goods
Dining tables sold for immediate bank payment	Cash Book, bank column	Immediate receipt through bank
Old office computer sold on credit	Journal Proper	Disposal of an asset used by the business
Customer returns a table previously sold on credit	Sales Returns Book	Return of an earlier sale
Customer pays an outstanding invoice	Cash Book	Collection of a debt already recorded

The physical item alone does not decide the book. A computer is merchandise for a computer dealer, but an office asset for our furniture dealer.

If you need more practice with the exclusions, see which transactions go into Journal Proper.

Read an invoice as three different amounts

For the examples below, assume an ordinary registered seller making taxable sales on credit. There are no extra charges, exemptions, reverse-charge transactions or special place-of-supply cases. Prices are exclusive of GST unless expressly stated otherwise. All rates are assumed rates supplied for the exercises, not claims about the current tax rate of a particular product.

Keep these three amounts separate:

1. List value: quantity multiplied by the quoted price before trade discount.
2. Sales value: the price after trade discount, excluding GST.
3. Invoice total: sales value plus the GST charged to the customer.

With no additional taxable charges, the sales value in these exercises is also the taxable value.

For a list value of Rs 20,000 and a 10% trade discount:

• Trade discount = Rs 20,000 × 10% = Rs 2,000.
• Sales value = Rs 20,000 − Rs 2,000 = Rs 18,000.
• GST at an assumed 18% = Rs 18,000 × 18% = Rs 3,240.
• Invoice total = Rs 18,000 + Rs 3,240 = Rs 21,240.

The seller has earned Rs 18,000 from this sale before considering the cost of the goods. The additional Rs 3,240 is output tax, not extra sales revenue or profit.

Why does trade discount come before GST?

An invoice discount given before or at supply is excluded from taxable value when it is duly recorded on the invoice. That treatment is explained in CBIC’s sectoral FAQs on Section 15.

In the usual school-book treatment, trade discount reduces the recorded purchase or sale price. It does not create a separate Trade Discount Account. You may show the subtraction in a details column or working note, but do not post it as Discount Allowed.

For a closer comparison, use the guide to trade discount and cash discount entries.

Choose CGST and SGST, or IGST

For ordinary intra-state supplies in these examples, split the total GST rate equally between CGST and SGST. For inter-state supplies, use IGST at the full stated rate.

The underlying test generally compares the supplier’s location with the place of supply. A customer’s postal address alone is not a universal test. CBIC explains this distinction in its IGST overview.

Suppose the exercise states a taxable value of Rs 18,000 and GST at 18%:

Nature of supply	CGST	SGST	IGST	Total GST
Intra-state	Rs 1,620 at 9%	Rs 1,620 at 9%	Nil	Rs 3,240
Inter-state	Nil	Nil	Rs 3,240 at 18%	Rs 3,240

Do not charge CGST at 18% and SGST at another 18%. That would double the intended tax.

Also, do not fill all three columns for an ordinary single supply. The separate columns exist because a month can contain both kinds of sale.

The Sales Day Book format with GST

A practical analytical format has these columns:

Date | Invoice number | Customer and particulars | L.F. | Sales | Output CGST | Output SGST | Output IGST | Invoice total

Here, L.F. means Ledger Folio, the reference to the customer’s ledger account. Fill it when the posting reference is available; do not invent a page number in an exercise.

NCERT presents an analytical Sales Book that separates sales, tax components and the total. Individual customer accounts are debited, while the relevant periodic column totals are credited to Sales and output-tax accounts. See the chapter’s sales-book and analytical-book illustrations.

You can keep the quantity, price and discount calculations beneath each invoice in a details column. To keep our table readable, we will show those calculations first and enter one row per invoice.

Complete worked example: four invoices

Aster Traders sells goods on credit during September. The following invoices are independent teaching examples. All amounts are in rupees, and every discount mentioned here is shown on the original invoice.

Invoice S101, 3 September: one discount and intra-state GST

Sold to Meera Stores: 40 units at Rs 500 each, less 10% trade discount. The supply is intra-state, with GST at an assumed total rate of 18%.

Calculation	Amount (Rs)
List value: 40 × 500	20,000
Less trade discount: 20,000 × 10%	2,000
Sales and taxable value	18,000
Output CGST: 18,000 × 9%	1,620
Output SGST: 18,000 × 9%	1,620
Invoice total	21,240

Meera Stores owes Rs 21,240. The Sales column receives Rs 18,000. Keep both figures visible; each will have a different destination in the ledger.

Invoice S102, 8 September: successive discounts and IGST

Sold to Kavya Retail: 30 units at Rs 800 each, less successive trade discounts of 10% and 5%. The supply is inter-state, with an assumed IGST rate of 12%.

Start with 30 × Rs 800 = Rs 24,000.

The first discount is Rs 24,000 × 10% = Rs 2,400, leaving Rs 21,600.

The second discount is Rs 21,600 × 5% = Rs 1,080, leaving Rs 20,520.

Then:

• Output IGST = Rs 20,520 × 12% = Rs 2,462.40.
• Invoice total = Rs 20,520 + Rs 2,462.40 = Rs 22,982.40.

The combined discount is Rs 3,480, or 14.5% of Rs 24,000. It is not 15%, because the second percentage applies to a smaller base.

A neat shortcut gives the same sales value:

Rs 24,000 × 0.90 × 0.95 = Rs 20,520.

Invoice S103, 15 September: two lines with different discounts

Sold to Naman Mart on credit:

• Product A: 25 units at Rs 400 each, less 10% trade discount.
• Product B: 10 units at Rs 600 each, less 5% trade discount.

Both products carry an assumed total GST rate of 18%, and the supply is intra-state.

Work out each product separately:

Invoice line	List value (Rs)	Discount (Rs)	Sales value (Rs)
Product A: 25 × 400	10,000	1,000	9,000
Product B: 10 × 600	6,000	300	5,700
Total	16,000	1,300	14,700

Since the assumed GST rate is the same for both products, we can calculate it on their combined taxable value:

• Output CGST = Rs 14,700 × 9% = Rs 1,323.
• Output SGST = Rs 14,700 × 9% = Rs 1,323.
• Invoice total = Rs 14,700 + Rs 1,323 + Rs 1,323 = Rs 17,346.

Applying 10% to the whole Rs 16,000 would give Product B a discount that was never offered. Let each invoice line keep its own terms.

Invoice S104, 22 September: a repeat customer

Sold to Meera Stores: 15 units at Rs 1,000 each, less 20% trade discount. The supply is intra-state, with an assumed total GST rate of 12%.

• List value = 15 × Rs 1,000 = Rs 15,000.
• Trade discount = Rs 15,000 × 20% = Rs 3,000.
• Sales value = Rs 12,000.
• Output CGST at 6% = Rs 720.
• Output SGST at 6% = Rs 720.
• Invoice total = Rs 13,440.

Even though Meera Stores appeared earlier, this is a separate invoice on a separate date. Give it its own row. The customer’s ledger will bring the two debts together.

Aster Traders: completed Sales Day Book

All amounts below are in rupees. The L.F. column is left blank because ledger page references have not been supplied.

Sept. date	Invoice	Customer	L.F.	Sales	CGST	SGST	IGST	Invoice total
3	S101	Meera Stores		18,000.00	1,620.00	1,620.00	0.00	21,240.00
8	S102	Kavya Retail		20,520.00	0.00	0.00	2,462.40	22,982.40
15	S103	Naman Mart		14,700.00	1,323.00	1,323.00	0.00	17,346.00
22	S104	Meera Stores		12,000.00	720.00	720.00	0.00	13,440.00
30		Totals		65,220.00	3,663.00	3,663.00	2,462.40	75,008.40

Before posting, prove the total in two directions.

Across the columns:

Rs 65,220 + Rs 3,663 + Rs 3,663 + Rs 2,462.40 = Rs 75,008.40.

Down the invoice totals:

Rs 21,240 + Rs 22,982.40 + Rs 17,346 + Rs 13,440 = Rs 75,008.40.

These checks agree. Now check whether each row uses the correct GST columns. Arithmetic agreement cannot reveal that an inter-state amount was accidentally entered as CGST and SGST.

Posting the Sales Day Book to the ledger

For Aster Traders, debit the customers with their individual invoice totals:

• Meera Stores: Rs 21,240 on 3 September and Rs 13,440 on 22 September.
• Kavya Retail: Rs 22,982.40 on 8 September.
• Naman Mart: Rs 17,346 on 15 September.

Meera’s two invoices total Rs 34,680. If there are no opening balances, collections or returns, that is the closing amount owed by Meera. It is not automatically the closing balance if the question includes other transactions.

Credit the September totals as follows:

Account	Side	Amount (Rs)
Sales Account	Credit	65,220.00
Output CGST Account	Credit	3,663.00
Output SGST Account	Credit	3,663.00
Output IGST Account	Credit	2,462.40

Here is the double-entry meaning of S101, shown for understanding:

Account	Debit (Rs)	Credit (Rs)
Meera Stores A/c	21,240
To Sales A/c		18,000
To Output CGST A/c		1,620
To Output SGST A/c		1,620

When the Sales Day Book is maintained, do not also enter and post this same sale through Journal Proper. That would duplicate it. Similarly, do not credit each invoice to Sales and then credit the monthly total again.

The output-tax totals here are the taxes arising from these four sales. They do not by themselves calculate the final amount payable to the government after input-tax adjustments and other transactions.

Three invoice variations worth practising

1. Different GST rates within one invoice

Suppose a new inter-state invoice has two already-discounted taxable lines:

• Product P: Rs 8,000 at an assumed IGST rate of 5%.
• Product Q: Rs 6,000 at an assumed IGST rate of 18%.

IGST on P = Rs 400. IGST on Q = Rs 1,080.

The Sales column receives Rs 14,000, the IGST column receives Rs 1,480, and the invoice total is Rs 15,480.

Do not apply either rate to the entire Rs 14,000. Calculate tax by rate group, then combine the amounts for the invoice row. This example is separate from Aster Traders’ September book.

2. A price already includes GST

Suppose the question says the final amount after trade discount is Rs 11,800, inclusive of GST at 18%.

The Rs 11,800 represents 118% of the taxable value, so:

Taxable value = Rs 11,800 × 100 ÷ 118 = Rs 10,000.

GST is Rs 1,800. For an ordinary intra-state supply, that becomes CGST Rs 900 and SGST Rs 900.

Adding another 18% to Rs 11,800 would charge tax twice. Read the phrase “inclusive of GST” before reaching for the calculator.

3. A cash discount offered for prompt payment

Suppose Meera’s S101 invoice also offers a later payment discount, but Meera has not paid yet. Do not guess that the condition will be fulfilled and reduce the original receivable immediately.

For a separate classroom settlement example, assume Meera later pays Rs 20,880 against S101 and receives a cash discount of Rs 360. The exercise expressly states that there is no GST adjustment.

The settlement is:

• Bank A/c Dr Rs 20,880.
• Discount Allowed A/c Dr Rs 360.
• To Meera Stores A/c Rs 21,240.

This records collection and settlement, not a second sale. The original Sales Day Book row remains Rs 21,240.

What if the question adds packing or delivery charges?

Do not silently force a more detailed invoice into the simple formula used above.

Supplier-charged incidental expenses such as packing can form part of taxable value under Section 15. Check the question’s terms, any stated tax treatment and the account to which the charge is to be credited. The official Section 15 valuation provisions identify these inclusions.

If a question requires a separate packing-recovery account, provide a separate analytical column. Then the invoice total must reconcile with sales, that recovery and the taxes. The taxable base and the Sales Account figure need not be identical in every possible invoice.

For instance, under expressly stated assumptions, goods of Rs 10,000 plus taxable packing recovery of Rs 500 at 18% produce GST of Rs 1,890 and an invoice total of Rs 12,390. If packing is credited separately, Sales receives Rs 10,000 and Packing Recovery receives Rs 500. This is why the four-invoice example began by excluding extra charges.

Find the mistake before it reaches the ledger

Use S101 to diagnose these common errors:

Sales credited with Rs 21,240: GST has been treated as sales revenue. Sales should be Rs 18,000.

Meera debited with Rs 18,000: the customer account omits Rs 3,240 of tax owed under the invoice.

GST calculated on Rs 20,000: the trade discount has not reduced the tax base. Under the exercise assumptions, GST should be calculated on Rs 18,000.

Discount Allowed debited with Rs 2,000: the original trade discount has been incorrectly treated as a cash discount expense.

CGST Rs 3,240 and SGST Rs 3,240: the full 18% has been applied twice instead of split into 9% and 9%.

S101 entered again when Meera pays: a collection has been mistaken for a fresh credit sale.

Practice questions with checked answers

Try the calculations first. Assume ordinary taxable credit sales, no extra charges, and prices exclusive of GST unless stated otherwise. Rates are supplied solely for these exercises.

Question 1: a straightforward intra-state invoice

Sell 50 units at Rs 200 each, less 10% trade discount, with GST at 12%. Find sales, CGST, SGST and invoice total.

Answer: List value Rs 10,000; discount Rs 1,000; sales Rs 9,000; CGST Rs 540; SGST Rs 540; invoice total Rs 10,080.

Question 2: successive discounts

An inter-state sale has a list value of Rs 40,000, successive discounts of 20% and 5%, and IGST at 18%.

Answer: Rs 40,000 × 0.80 × 0.95 = sales Rs 30,400. IGST = Rs 5,472. Invoice total = Rs 35,872. The effective discount is 24%, not 25%.

Question 3: identify the correct book

A stationery dealer sells an old office cupboard on credit for Rs 4,000. Does it enter the Sales Day Book?

Answer: No. It is a credit sale of an office asset, so use Journal Proper. The amount does not change the classification.

Question 4: work backwards

An inter-state invoice totals Rs 26,880 inclusive of IGST at 12%. There are no extra charges. Find the taxable sales value and IGST.

Answer: Rs 26,880 ÷ 1.12 = Rs 24,000 sales. IGST = Rs 2,880.

Question 5: reconcile the monthly columns

Sales total Rs 1,20,000; CGST Rs 4,500; SGST Rs 4,500; IGST Rs 7,200. What total should be debited across the customers’ accounts for these invoices?

Answer: Rs 1,20,000 + Rs 4,500 + Rs 4,500 + Rs 7,200 = Rs 1,36,200. Credit Sales with Rs 1,20,000 only.

Question 6: separate the invoice lines

Line A has a list value of Rs 12,000 with a 10% trade discount. Line B has a list value of Rs 8,000 with a 15% trade discount. Both are inter-state supplies taxed at an assumed IGST rate of 5%.

Answer: Line A becomes Rs 10,800; line B becomes Rs 6,800. Sales = Rs 17,600; IGST = Rs 880; invoice total = Rs 18,480.

Question 7: a collection after the sale

A customer pays the full Rs 10,080 from Question 1 through bank a week later. What is recorded now?

Answer: Bank A/c Dr Rs 10,080; To Customer A/c Rs 10,080. Record the receipt in the Cash Book. Do not add another Sales Day Book row.

Question 8: an incorrect but balanced invoice

A student records sales Rs 9,000, CGST Rs 1,080, SGST Rs 1,080 and total Rs 11,160 for Question 1. The row adds correctly. Is it right?

Answer: No. The total GST rate was 12%, requiring 6% CGST and 6% SGST. Both tax amounts should be Rs 540. A balanced row can still apply the wrong tax rate.

Frequently asked questions

1. Are the Sales Book and Sales Account the same?

No. The Sales Book records individual credit sales of trading goods. Sales Account is a ledger account that accumulates sales revenue, including amounts posted from other relevant books such as the Cash Book for cash sales.

2. Is trade discount entered in a separate column?

It can appear in invoice workings or a details column. The amount carried to the Sales column is after trade discount. A separate Trade Discount ledger posting is not made in the usual school treatment.

3. Does the customer owe the amount before or after GST?

The customer owes the invoice total including GST charged. In S101, that is Rs 21,240, even though the sales value is Rs 18,000.

4. Why do we write Output GST rather than Input GST?

These entries are in the seller’s books and concern tax charged on sales. Input-tax accounts relate to eligible tax on purchases, subject to the applicable conditions.

5. Can one Sales Day Book contain both CGST-SGST and IGST?

Yes. A month can include intra-state and inter-state invoices. Use the applicable columns for each invoice and total the three tax columns separately.

6. Do two trade discounts of 10% and 5% equal 15%?

No, when they are successive discounts. Multiply the original value by 0.90 and then 0.95. The amount retained is 85.5%, giving an effective discount of 14.5%.

7. Should sales returns be subtracted inside the original Sales Book?

When separate subsidiary books are maintained, record returns in the Sales Returns Book using the relevant credit note. Keep the original invoice traceable; do not erase its history.

8. What happens if the same customer buys twice?

Record each invoice separately by date and number. Post both invoice totals to that customer’s account. S101 and S104 together debit Meera Stores with Rs 34,680.

9. Is the Sales Book total carried forward as a balance?

Its periodic column totals are posted to the relevant ledger accounts. It is not balanced like a customer’s account with a debtor balance carried down. Distinguish a subtotal carried to another page from a ledger balance carried to another period.

10. What is the quickest final check?

Check each invoice’s eligibility, discount base and tax split. Then confirm that sales plus the separate tax columns equals the invoice totals, and that customers receive the full invoice debits. All four checks matter; correct addition alone is not enough.