Volume 3

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Tally ERP Taxation Certificate Program (TTCP)
Volume - III
Version: 1.1
Last Updated: January 2018
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Tally.ERP 9 Volume-III book is designed to issue to the students enrolled with TallyAcademy Network Partner (TANP) and
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Contents
Lesson 1 Goods and Service Tax (For Goods) …....………………………………... 6
1.1 Introduction………………………………………………………………………………. 4
1.2 What is GST……………………………………………………….................................... 4
1.3 Why GST…….....………………………………………………….................................... 6
1.4 Structure of GST ………………………………………………….................................... 7
1.5 Registration of GST……………………………………………................................... 9
1.6 Types of Returns …………………………………………………................................... 12
1.7 Configuring GST in Tally.ERP 9……………………………………………………… 15
1.8 Creating Masters in Tally.ERP 9……………………….......................……………… 19
1.9 Entering Regular Transactions in Tally.ERP …………….………………………….. 29
1.10 Accounting for returns of the goods ……….………………………….............................. 49
1.11 Rate Difference in Purchase and Sales …………………………………........................... 51
1.12 Nil Rated Transactions under GST …………………………................................………… 54
1.13 Purchases from unregistered Dealers …………………………………........................ 58
1.14 Inter-State Sales and Purchase ……………………………….........................................… 62
1.15 Transaction with multi GST rate and multi inventory ………………………………… 66
1.16 Export Sales …………………………….....................................................................…… 68
1.17 Adjustment toward Tax Credit under GST …………………………………........................ 70
1.18 Payment of GST ………………………………...............................................................… 72
1.19 GST Reports ……………………………………………………………………..................... 74
Lesson 2 Tax Deducted at Source (TDS) ………………………………………… 85
2.1 Introduction……………………………………………………………………………. 85
2.2 Configuring TDS in Tally.ERP 9……………………………………………..........…… 86
2.3 TDS Statutory Masters………………………………………………...........................… 89
2.4 Recording Transactions in Tally.ERP 9………………………………………………… 91
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2.4.1 Booking Expenses and Deducting TDS ………………………………………………… 91
2.4.2 Booking Expenses and Deducting TDS Later …………………..................................… 101
2.4.3 TDS Deduction at Lower Rate ………………………………….......................................… 108
2.4.4 TDS Deduction at Zero Rate ………………………………..........................................…… 112
2.4.5 Deducting TDS on Advance Payment ……………………………………...................... 116
2.4.6 Payment of TDS …………………………………….................................................... 119
2.5 TDS Reports………………………………………………………………………….... 125
Lesson 3 Goods and Service Tax (For Services)...........................………………... 134
3.1 Introduction…………………………………………………………………………... 134
3.2 Configuring Service Tax in Tally.ERP ……………………………………………….. 134
3.3 Creating GST Ledgers……………………………………………………………........ 137
3.4 Recording of Transaction……………………………………........................................ 138
3.4.1 Purchase of Service Tax (Local)……………………………................................ 138
3.4.2 Purchase of Service Tax (Out of state)……………………………........................ 142
3.4.3 Sale of Service Tax (Local)…………………………............................................ 145
3.4.4 Sale of Service Tax (Out of state) ……………………………………................. 149
3.4.5 Inward Supply under Reverse Charge ……………………………………............ 154
3.4.7 Accounting for advance receipt ……………………………………...................... 158
3.4.8 Accounting for Opening Service Tax …………………………………….............. 164
3.4.9 Adjustment of Input Service tax credit ……………………………………............ 168
3.4.10 Payment of Goods and Service Tax……….......................................................... 169
3.5 Goods and Service Tax Reports …………………………………………………….... 171
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Lesson 1: Goods and Service Tax
1.1. Introduction
Goods and Services Tax (GST) is an indirect tax which was introduced in India on 1 July 2017
and was applicable throughout India which replaced multiple cascading taxes levied by
the central and state governments. It was introduced as The Constitution (One Hundred and First
Amendment) Act 2017, following the passage of Constitution 122nd Amendment Bill. The GST
is governed by a GST Council and its Chairman is the Finance Minister of India. Under GST,
goods and services are taxed at the following rates, 0%, 5%, 12% ,18% and 28%. GST can be
termed as “One Tax, One Nation and One Market”.
1.2. What is GST
GST stands for Goods and Services Tax which is concurrent levy of taxes on “Supply” of goods
and services. GST in India will be dual system, where the Central and State together will levy tax
on supply of goods and / or services, within the State (Intra-State) and Inter-State.
1.2.1 HIGHTLIGHTS of GST
 Common threshold limit across the country: GST-ensures a common threshold limit,
irrespective of whether your manufacturer or dealer, either dealing in goods and/ or
services. Under current regime different indirect taxes has varying threshold limit.
Example, the threshold limit for excise is 1.5 crore, service tax Rs.10 Lakhs and under
GST the threshold limit ranges from Rs.5 lakhs to 20 lakhs which are state specific.
 Continuity of tax credit across the supply chain till it reaches the consumer: GST
aims at providing seamless flow of tax-credits throughout the value-chain, and across
boundaries of States. This is one of the fundamental feature of GST.
 Elimination of tax cascading effect in the supply chain: with the availability of
seamless flow of input tax credit throughout the supply chain would ensure the
elimination of cascading of taxes.
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 Pan Based Registration: The registration of business will be PAN Based. In arriving the
aggregate turnover, all the business vertical operating across the country with same PAN
will be considered.
 Point of taxation will be ‘Supply’: Unlike the current indirect tax system, each tax
system has different taxable event like Excise duty on removal of goods, GST on sales
etc., supply is the single taxable event to discharge the duty liability.
 Valuation method broadly as ‘Transaction Value’: Transaction value is the sole
valuation method applied in determining the value of taxable supply. Transaction value is
the actual price paid or payable for the supply of goods/services
 Branch transfers taxable and credit eligibility: Branch transfers will be treated as
taxable supply and requisite levy needs to be charged on such a supply. However, such
levy is fully allowed as Input credit.
 Tax Credit on Interstate Inward supply of goods: under the current regime the tax on
Interstate purchase forms part of cost of goods. Under GST, Input tax credit is available
on interstate inward supply of goods and / or services.
1.3. Why GST
The current indirect tax system with multiplicity of taxes (Central Levy:-excise duty, Service
Tax, Various Cess and State Levies:- VAT, Entry Tax, Octroi, Luxury Tax, Entertainment taxes,
Purchase Tax etc.) - at different rates - at multiple points ( at the time of manufacture, trade,
rendering services etc.). This has led to several inefficiencies and limitation. One of the major
limitation is the cascading effect of tax. Under the current regime, Excise charged by the
manufacturer on billing to a Dealer, the credit of input cannot be claimed by a dealer, and thus
forming part of cost to dealer which leads to cascading of tax.
Under GST the credit utilization will be available across the supply chain till it reaches the end
consumer. Secondly, tax on tax is eliminated. Example:- Under the current tax regime, VAT is
charged on the assessable value plus on Excise duty.
 Simpler tax structure: As multiple taxes on a goods or service are eliminated and a
single tax comes into place, the tax structure is expected to be much simpler and easier to
understand and administer.
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 Eliminates cascading effect of taxes: One of the key feature of GST is seamless
availability of Input credit set-off mechanism. This helps in eliminating the cascading
effect and benefit is passed on to consumer.
 Increased Revenue: A simpler tax structure can bring about greater compliance, thus
increasing the number of tax payers and in turn tax revenues for the Government
 Technology Driven System: GST compliance is going to be transaction based and with
cross matching concept, where, outward supply and inward supply will be matched to
determine the net tax liability for a given dealer. Millions of dealers and Billions of
transaction need to be processed and ‘Technology’ will play a pivotal role in the
successful implementation and administration of compliance.
1.4. STRUCTURE OF GST
GST is a dual concept tax system. Under this system, tax is administered, collected and shared
by both Centre and states based on the nature of transaction (Within State or interstate).The tax
components of GST are:
1.4.1 WHY IS DUAL GST REQUIRED?

India is a federal country where both the Centre and the States have been assigned the powers to
levy and collect taxes through appropriate legislation. Both the levels of Government have
distinct responsibilities to perform according to the division of powers prescribed in the
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Constitution for which they need to raise resources. A dual GST will, therefore, be in keeping
with the Constitutional requirement of fiscal federalism.
While we now know the tax components of GST, it is equally important for you to know the
taxes existing in current regime and how this are subsumed under GST
1.4.2 CURRENT INDIRECT TAX STRUCTURE
3.2.3 TAXES SUBSUMED UNDER GST
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1.5 REGISTRATION
Every business carrying out a taxable supply of goods or services under GST regime and whose
turnover exceeds the threshold limit of Rs. 20 lakh/ 10 Lakh as applicable will be required to
register as a normal taxable person. This process is of registration is referred as GST
registration..
1.5.1 THRESHOLD LIMIT
This means that the day a dealer crosses Rs 10 lakh / Rs 20 lakh turnover, he is registered and
needs to start charging GST and is eligible to claim input tax credit. All existing dealers
registered with any of the current laws (VAT/Excise/ST) will also be required to be registered
under GST by default.
1.5.2 MANDATORY REGISTRATION

The following category of suppliers will be mandatorily required to be registered irrespective of
turnover:
 Taxable person carrying on interstate supply
 Casual and non-resident taxable persons
 Businesses liable to pay tax under reverse charge
 Agents supplying on behalf of taxable person
 Input service distributor
 Sellers on ecommerce platforms
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 Aggregator supplying services under his brand name (Ecommerce Companies)

 Persons responsible to deduct TDS(Government Departments)
Registration will be 15-digit PAN based GSTIN with following structure.
State Entity ‘Z’ by Check

PAN
Code Code default Digit
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
The entity code will be applicable for taxpayers having multiple business verticals within the
state.
1.5.3 REGISTRATION PROCESS

Regular and Composite Dealer
If you are a regular dealer or a composite tax payer, you need to do the following:
1. Fill Part-A of Form GST REG-01. Provide your PAN number, mobile number, and e-
mail ID, and submit the form.
2. The PAN number verified on the Portal. Mobile number, and e-mail ID are verified with
a one-time OTP.
3. You will receive an application reference number on your mobile and via e-mail.
4. Fill Part- B of Form GST REG-01 and specify the application reference number you
received. Attach other required documents and submit the form.
5. If additional information is required, Form GST REG-03 will be issued to you. You need
to respond in Form GST REG-04 with required information within 7 working days from
the date of receipt of Form GST REG-03.
6. If you have provided all required information via Form GST REG-01 or Form GST
REG-04, a certificate of registration in Form GST REG-06 will be issued within 3 days
from date of receipt of Form GST REG-01 or Form GST REG-04.
7. If the details submitted are not satisfactory, the registration application is rejected using
Form GST REG-05.
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1.5.4 COMPOSITION LEVY

Considering the compliance complexity for small dealers, the current state indirect tax regime
has provided a simpler compliance for their business called ‘composition scheme’. Under this
scheme,
 You are required to pay tax at certain percentage of turnover.
 You need not maintain the detailed records and documents nor required to follow the
rules and procedure of issuing tax invoice, maintaining stock, filing of invoice-wise sales
& purchase etc.
 You only need to file periodic return usually on quarterly basis.
 ITC will not allowed
 Not allowed to collect tax on sales.
Thus for small business, it is simpler to calculate tax liability and save lot of time and energy
involved in maintaining the detailed records.
In GST also, similar benefit is being extended to small dealers, who can opt for their compliance
under composition scheme. In GST, this is referred as ‘Composition Levy’ and the registered
taxable person who is allowed pay tax at certain percentage of turnover during the year is called
as Composition Tax payer.
Apart from the threshold limit, the following other conditions are also critical in determining the
eligibility for composition levy.
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1.6 TYPES OF RETURNS
All the returns under the Goods & Services Tax regime are required to be filed electronically
through GST Network portal. Chapter IX of the Central GST Act, 2017, read with CGST Rules,
2017 contains the provisions of returns to be filed by various taxable persons. The details of each
form are listed below along with details of applicability and periodicity
Regular Dealer
Form Type Frequency Due Date Details to be furnished

10th of succeeding Furnish details of outward supplies of
Form GSTR-1 Monthly
month taxable goods and/or services effected
Auto Populated details of inward
On 11th of succeeding supplies made available to the
Form GSTR-2A Monthly
Month recipient on the basis of Form GSTR-
1 furnished by the supplier
Details of inward supplies of taxable
goods and/or services claiming input
15th of succeeding
Form GSTR-2 Monthly tax credit. Addition or Modification in
month
Form GSTR-1 should be submitted in
Form GSTR-2
Details of outward supplies as added,
20th of succeeding corrected or deleted by the recipient in
Form GSTR-1A Monthly
month Form GSTR-2 will be made available
to supplier
Monthly return on the basis of
20th of succeeding finalization of details of outward
Form GSTR-3 Monthly
month supplies and inward supplies along
with the payment of amount of tax
Communication of acceptance,
Form GST ITC-1 Monthly -- discrepancy or duplication of input tax
credit claim
Notice to a registered taxable person
Form GSTR-3A -- -- who fails to furnish return under
section 27 and section 31
Annual Return - Furnish the details of
ITC availed and GST paid which
Form GSTR-9 Annually 31st Dec of next fiscal
includes local, interstate and
import/exports.
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Composite Tax payer
Return Type Frequency Due Date Details to be furnished

Form GSTR-4A Quarterly -- Details of inward supplies made
available to the recipient registered
under composition scheme on the basis
of Form GSTR-1 furnished by the
supplier
Form GSTR-4 Quarterly 18th of succeeding Furnish all outward supply of goods
month and services. This includes auto-
Populated details from Form GSTR-
4A, tax payable and payment of tax.
Form GSTR-9A Annual 31st Dec of next fiscal Furnish the consolidated details of
quarterly returns filed along with tax
payment details.
Foreign Non-Resident Taxpayer

Form GSTR-5 Monthly 20th of succeeding month Furnish details of imports, outward
or within 7 days after the supplies, ITC availed, tax paid, and
expiry of registration closing stock
Input Service Distributor

Form GSTR-6A Monthly 0n 11th of succeeding Details of inward supplies made
month available to the ISD recipient on the
basis of FORM GSTR-1 furnished
by the supplier
Form GSTR-6 Monthly 13th of succeeding month Furnish the details of Input Credit
distributed
Tax Deductor

Form GSTR-7 Monthly 10th of succeeding month Furnish the details of TDS deducted
Form GSTR-7A Monthly Made available to TDS Certificate – Capture details of
Download value on which TDS is deducted and
deposit on TDS deducted into
appropriate Govt
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E-commerce

Form GSTR-8 Monthly 10th of succeeding month Details of supplies effected through
e-commerce operator and the amount
of tax collected on supplies
Aggregate turnover exceeds 1 cr.

Form GSTR-9B Annually Annual, 31st Dec of next Reconciliation Statement -audited annual
fiscal’ accounts and a reconciliation statement,
duly certified.
Final return -For taxable person whose registration has been surrendered or cancelled

Form GSTR-10 --- Within 3 Months from Furnish details inputs and Capital goods
date of Surrender held, tax paid and payable.
Registration or
cancellation order
Government departments and united Nation Bodies

Form GSTR-11 Monthly 28th of subsequent Details of inward supplies to be furnished
month by a person having UIN
1.6.1 FILING OF RETURN
Every ‘registered taxable person’ has to furnish their outward supply details in Form GSTR-1
by 10th of the subsequent month. Between the 11th and 15th day, the recipient of goods and
supply can view their Inward supplies in auto-populated GSTR-2A. This period will allow for
any corrections (additions, modifications and deletion) in Form GSTR-2 and submission by
15th of the subsequent month.
The addition, modification and deletion by the recipient in Form GSTR-2 will be made
available to supplier in Form GSTR-1A. The supplier has to accept or reject the adjustments
made by the recipient.
On 20th, auto-populated return GSTR-3 will be available for submission along with the
payment.
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GSTR – 1 GSTR – 2A GSTR – 2

th th th
10 of every month 11 to 15 of every month 15th of every
Details of outward Auto-Populated (Purchase month
sales view) Approved
/modified details
of GSTR – 2A
ITC finalized
matched GSTR – 3 GSTR – 1A
Purchaser’s th
20 of every month 16th to 20th of every
ITC ledger for
matched Final return with month
transactions payment of liability Approve or disapprove
the modification done
matched unmatched
by purchaser
Two months period for ITC reversed to be paid along
reconciliation of with Interest by Purchaser
unmatched transaction
unmatched
1.7 Configuring GST in Tally.ERP 9
Sony Sports is a dealer of Sports and music equipments. To record the GST transaction
(Products having different GST Rates) for the financial year 2017-18. Create a company Sony
Sports.
1.7.1 Company Setup
Create a company as shown below
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Figure 1.7.1 Company Creation – Sony Sports
 Press Enter twice to accept the company creation screen
1.7.2 Enabling Goods and Service Tax (GST)
To enable GST,
 Press F11: Features (F3: Statutory & Taxation Features) and set the following to Yes
o Enable Goods and Service Tax (GST)
o Set / Alter GST details
 On activating Set/Alter GST details, the Company GST Details screen appears as
shown:
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Figure 1.7.2 GST Details

 In GST Details screen please fill the details as above
o Press Enter to accept the screen
 In Tax information,
o Enter PAN/Income tax no as AABCS1425P
Figure 1.7.3 Statutory & Taxation Screen
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 In F11: Features (Accounting Features), ensure that Maintain Bill-wise details is set
to Yes
1.7.3 GST Classifications
For multiple product having different GST rates, we can create GST Classification in Tally.ERP
9 or you can defined the GST Rates in inventory level also.
To create GST Classifications in Tally.ERP 9,

Go to Gateway of Tally > Accounts Info > Statutory Info. > GST Classifications > Create
Figure 1.7.3.1 GST Classification Screen

Note : Similarly create without HSN/SAC Code, GST 18% with integrated tax 18% and GST
28%.
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1.8 Creating Masters in Tally.ERP 9
The ledgers that are affected by GST are:

 Purchase Ledger
 Sales Ledger
 GST Ledger
 Party Ledger
1.8.1 Creating Purchase Ledger
The following ledgers have to be created under Purchase Accounts group :

Ledger Under Inventory Is GST Set/Alter Classification Type
values are Applicable GST of
affected Details Supply
Purchase @ Purchase Yes Applicable Yes GST 12% Goods
12% Accounts
18% Accounts
28% Accounts
Go to Gateway of Tally > Accounts Info. > Ledger > Create (Under Single Ledger)
 Create the ledger as shown below
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Figure 1.8.1 Purchase @ 12%

 Retain the other fields as default and accept the screen
Similarly create the ledger Purchase @ 18% and Purchase @ 28%
1.8.2 Creating Sales Ledger
The following ledgers have to be created under Sales Accounts group :

Ledger Under Inventory Is GST Set/Alter Classification Type of
values are Applicable GST Supply
affected Details
Sales @ Sales Yes Applicable Yes GST 12% Goods
12% Accounts
18% Accounts
28% Accounts
Go to Gateway of Tally > Accounts Info. > Ledger > Create (Under Single Ledger)
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Note : Create the sales ledgers as per purchase ledgers only change the group (under) as Sales
Accounts
1.8.3 Creating GST Ledger
Type of Duty/ Tax Type

Ledger Under
Tax
SGST Duties & Taxes GST State Tax
CGST Duties & Taxes GST Central Tax
IGST Duties & Taxes GST Integrated Tax
Create the ledger SGST

Go to Gateway of Tally > Accounts Info. > Ledgers > Create (Under Single Ledger)
 Create the ledger under Duties and Taxes
 Select GST in the Type of Duty/Tax field
 Tax Type : State Tax
 The Percentage of Calculation set as 0 %
The ledger SGST appears as shown:
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Figure 1.8.3 Ledger Creation - SGST

Note : Similarly create the CGST and IGST ledgers
1.8.4 Creating Party Ledgers
The following ledgers have to be created:

Ledger Under Maintain Address Set/Alter GST No.
balances GST
bill-by-bill Details
Perfect Sundry Yes Chembur, Yes 27AAAHT1092H1Z5
Sports Ltd Creditors Mumbai
400071
Sachin Sundry Yes Mankhurd, Yes 27AABFH3364F1ZL
Sports Creditors Mumbai
400088
Sports Plus Sundry Yes Kinnigoli, Yes 29ADAPN7053M1Z4
Creditors Mangalore,
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Karnataka
574150
A1 Sports Sundry Yes Govandi, Yes 27AACFN4968Q1ZF
Equipment Debtors Mumbai
400043
Geeta Sundry Yes Kurla, Yes 27AACPD2496B1Z4
Sports & Debtors Mumbai
Music 400070
Neel Sports Sundry Yes Ahmedabad, Yes 24ADAFS2898B1Z6
Debtors Gujarat
380001
Note : Select Registration Type as Regular
Create the ledger as shown:
Figure 1.8.4 Ledger Creation – Perfect Sports Ltd

Note : Similarly create the other legers.
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1.8.5 Creating Stock Group
The following stock Groups have to be created:

Stock Group Under Set/alter GST Classification
details
Cycle Primary Yes GST 12%
Badminton Primary No -
Cricket Primary No -
Music Primary No -
Helmets Primary No -
o We can define the GST rate at stock group level or Stock Item Level.
o In above example GST rate, we will apply in Group Level for Group Cycle
by Selecting GST Classification.
o For other Stock items which are not under Cycle Group, we will defined at
Stock Item Level
Create the stock group as shown:

Go to Gateway of Tally > Inventory Info. > Stock Groups > Create
Figure 1.8.5 Stock Group Creation – Cycle

 Select the Classification as : GST 12%
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 Press Enter to Accept the Screen.

Note : Similarly create the other Stock Groups without Classification
1.8.6 Creating Units of Measure
Go to Gateway of Tally > Inventory Info. > Units of Measure > Create
Figure 1.8.6 Unit of Measure Creation – Nos
1.8.7 Creating Stock Items
The following stock items have to be created:

Stock Item Under Units GST Set/alte Class HSN Integ Type of
Name Applicable r GST ificat Code rated Supply
details ion Tax
BMX GST
Cycle Nos Applicable Yes - - Goods
Bicycle 12%
Badminton Badmint
Nos Applicable Yes - 95069970 12% Goods
Bat on
Cricket Bat Cricket Nos Applicable Yes - 95069920 12% Goods
Guitar Music Nos Applicable Yes - 92079000 28% Goods
Studds
Helmets Nos Applicable Yes - 65061010 18% Goods
Helmet
Create the stock item as shown:

Go to Gateway of Tally > Inventory Info. > Stock Items > Create
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 Name : BMX Bicycle

 Under : Cycle
 Units: Nos
 GST Applicable: Yes
 Set/Alter GST Details : Yes
o GST Classification : GST 12%
Figure 1.8.7.1 GST Details

o Press Enter to accept
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Figure 1.8.7.2 Stock Item Creation – BMX Bicyle
Go to Gateway of Tally > Inventory Info. > Stock Items > Create
 Name : Badminton Bat
 Under : Badminton
 Units: Nos
 GST Applicable: Yes
Press F12:Configuration : Allow HSN/SAC details to Yes if HSN/SAC code is not showing.
o HSN/SAC : 95069970
o Calculation Type : On Value
o Taxability : Taxable
o Is reverse charge applicable : No
o Integrated Tax : 12%
o Cess : 0%
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o Press Enter to accept
Figure 1.8.7.4 Stock Item Creation - Badminton Bat
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Similarly create the stock items Cricket Bat with integrated tax as 12%, Guitar with
integrated tax as 28% and Studds Helmet with Integrated tax as 18% without GST
Classification as details given above.
1.9 Entering Transactions in Tally.ERP 9
We will record the transactions for the Sony Sports to understand the GST feature.
1.9.1 Creating Purchase Invoice witht inventory in voucher mode
Example 1:
On 1-7-2017, Sony Sports purchased 80 Nos. of Badminton Bat from Perfect Sports Ltd.
Chembur, Mumbai at Rs.1200 each. GST @ 12% was charged additionally.
Setup :
 Ensure that V : As Voucher is activated
 In F12 : Purchase Configuration, Set Accept Supplementary details and Use Cr/Dr
instead of To/By during entry to Yes
Create Purchase Invoice

Go to Gateway of Tally > Accounting Vouchers > F9: Purchase (As Voucher)
 Press F2 and change the date to 01/07/2017
 Type Supplier Invoice No : PS/13/17-18 and Date as 01/07/2017
 Select the party Perfect Sports Ltd from the List of Ledger Accounts in Credit
Particulars.
 In Supplier’s Details Screen, Type the address if required and press Enter to accept
 Enter the Amount as Rs. 1,07,520 (Purchase + GST amount)
 In the Bill-wise details for screen, select New Ref as PS/13/17-18
 Select Purchase @ 12% in the Debit particulars and Press Enter
 In Inventory Allocation for screen, Select Badminton Bat as Stock Item and Type
Quantity as 80 and Rate as 1200 and Press Enter. By default Debit amount will come
as Rs. 96,000
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 Select GST ledger as SGST in the Debit particulars amount will come automatically in
debit field, retype the amount as Rs. 5760 press Enter
 Similarly Select CGST in the Debit particulars amount will come automatically in debit
field press Enter
 Enter the narration if required
The Purchase Voucher will appear as shown:
Figure 1.9.1 Purchase Voucher

 Press Enter to accept.
 Both the buyer and seller are from same state i.e. Maharashtra that’s why SGST and
CGST has charged in purchase bill
1.9.2 Creating Purchase Invoice with Inventory and default GST Class (Invoice Mode)
Example 2:
On 3-7-2017, Sony Sports purchased 50 Nos. of Cricket Bat from Perfect Sports Ltd.
Chembur, Mumbai at Rs.1800 each. GST @ 12% was charged additionally.
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Setup :
 Select As Invoice and press F12: Configure button to set the options as un under,
o Accept Supplementary Details to No
o Use Common Ledger A/c for Item allocation to No

Go to Gateway of Tally > Accounting Vouchers > F9: Purchase (As Invoice)
 Type Supplier Invoice No : PS/21/17-18 and Date as 03/07/2017
 Select the party Perfect Sports Ltd from the List of Ledger Accounts in Party's A/c
Name
 Select the stock item Cricket Bat in the Inventory Allocation screen
 Enter the quantity as 50 and rate as 1800 and Press Enter to accept the screen, amount
will come automatically in amount field.
 In Accounting Details for screen, select Purchase @ 12% and amount by default will
come. Press Enter Twice.
 Select the GST ledger SGST, GST amount will be calculated automatically
 Similarly select CGST Ledger , GST amount will be calculated automatically
 Press Alt +A Tax Analysis (and Alt +F1 for Detailed
The Tax Analysis Screen will appear as shown:
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Figure 1.9.2 Tax Analysis

 Press Esc Key to come out from Tax Analysis Screen
 Press Enter thrice
 In the Bill-wise details for screen, accept the default values
 Type the narration if required
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The Purchase Invoice will appear as shown:
Figure 1.9.2.1 Purchase Invoice

1.9.3 Creating Purchase Invoice with Selection of GST Class during Entry
Example 3:
On 4-7-2017, Sony Sports purchased 10 Nos. of BMX Bicycle from Sachin Sports, Mankhurd
at Rs.2200 each. GST @ 12% was charged additionally.
Setup :
 In the F12: Configure (Purchase Invoice) screen,
o Use Common Ledger A/c for Item allocation to Yes
o Allow modification of Tax Details for GST to Yes

 Type Supplier Invoice No : SS/130/17-18 and Date as 04/07/2017
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 Select the party Sachin Sports from the List of Ledger Accounts in Party's A/c Name
 Select the Purchase @ 12% ledger under Purchase Ledger. In Tax Classification
details screen select GST 12% from the list of Classifications screen
 Select the stock item BMX Bicycle in the Inventory Allocation screen
 Enter the quantity as 10 and rate as 2200 and accept the screen amount will come
automatically. Press Enter twice.
 Similarly select CGST Ledger , GST amount will be calculated automatically.
Figure 1.9.3 Purchase Invoice

1.9.4 Creating Purchase Invoice with Multiple GST Rates
Example 4
On 05-07-2017, Sony Sports purchased 50 nos of Badminton Bat at Rs. 1050 with a GST rate
of 12%, 50 nos of Cricket Bat at Rs. 1750 with a GST rate of 12%, 50 nos of Studds Helmet at
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Rs. 1100 with a GST rate of 18%, and 100 nos of Guitar at Rs.2000 with a GST rate of 28%
from Sachin Sports.
Setup :
 In F12: Configure (Purchase Invoice),
o Allow modification of Tax Details for GST to No

 Type Supplier Invoice No : SS/145/17-18 and Date as 05/07/2017
 Select the party Sachin Sports from the List of Ledger Accounts in Party's A/c Name
 Select the stock item Badminton Bat in the Inventory Allocation screen
automatically and press Enter.
 In the Accounting Details for screen of Badminton Bat, select Purchase @ 12% under
Particulars. Press Enter
 Select Cricket Bat as the second stock item in the Name of item field and press Enter.
 In the Accounting Details for screen of Cricket Bat, select Purchase @ 12% under
 Select Studds Helmet as the third stock item in the Name of item field and press Enter.
 In the Accounting Details for screen of Studds Helmet, select Purchase @ 18% under
 Select Guitar as the fourth stock item in the Name of item field and press Enter.
 In the Accounting Details for screen of Guitar, select Purchase @ 28% under
Particulars. Press Enter twice
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 Press Alt +A to see the Tax Analysis

 Press Esc Key to come to the Accounting Voucher Creation screen
 Similarly select CGST Ledger , GST amount will be calculated automatically
 In the Bill-Wise Details for screen, accept the default values.
The Purchase Invoice appears as shown:

1.9.5 Creating Sales Invoice with inventory in voucher mode
Example 5:
On 6-7-2017, Sony Sports sold 50 Nos. of Badminton Bat to A1 Sports Equipment, Govandi at
Rs.1450 each. GST @ 12% was charged additionally.
Setup :
 Ensure that V : As Voucher is activated
 In F12 : Sales Configuration, Set Use Cr/Dr instead of To/By during entry to Yes
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Create Sales Invoice

Go to Gateway of Tally > Accounting Vouchers > F8: Sales (As Voucher)
 Type Invoice No in Ref : SS/001/17-18 and Date as 06/07/2017
 Select the party A1 Sports Equipment from the List of Ledger Accounts in Dr.
Particulars
 Enter the Amount as Rs. 81,200 (Sales + GST amount)
 In the Bill-wise details for screen, select New Ref as SS/001/17-18 and Press Enter.
 Select Sales @ 12% in the Credit particulars and Press Enter.
 In Inventory Allocation for screen, Select Badminton Bat as Stock Item and Type
Quantity as 50 and Rate as 1450 and Press Enter. By default Credit amount will come
as Rs. 72,500 and Press Enter.
 Select GST ledger as SGST in the Credit particulars amount will come automatically in
credit field, retype the amount as Rs. 4,350 press Enter
 Similarly Select CGST in the Credit particulars amount will come automatically in credit
field press Enter
The Sales Voucher will appear as shown:
Figure 1.9.5 Sales Voucher

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1.9.6 Creating Sales Invoice with Inventory and default GST Class (Invoice Mode)
Example 6:
On 7-7-2017, Sony Sports sold 40 Nos. of Cricket Bat to A1 Sports Equipment, Govandi at
Setup :
 Select As Invoice and press F12: Configure button to set the options as un under,
o Enable Supplementary Details to No
Go to Gateway of Tally > Accounting Vouchers > F8: Sales (As Invoice)
 Select the party A1 Sports Equipment from the List of Ledger Accounts in Party's A/c
Name
 Enter the quantity as 40 and rate as 2050 amount will be calculated automatically, Press
Enter to accept the screen
 In Accounting Details for screen of Cricket Bat, select Sales @ 12% and amount by
default will come. Press Enter Twice.
 Select the GST ledger as SGST , GST amount will be calculated automatically
 Similarly Select CGST Ledger, GST amount will come automatically, press Enter
 In the Bill-wise details for screen, Select New Ref and type the ref as SS/002/17-18 and
accept the default values
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The Sales Invoice will appear as shown:
Figure 1.9.6 Sales Invoice

1.9.7 Creating Sales Invoice with Selection of GST Class during Entry
Example 7:
On 8-7-2017, Sony Sports sold 5 Nos. of BMX Bicycle to Geeta Sports & Music, Kurla at
Setup :
 In the F12: Configure (Sales Invoice) screen,
o Use Common Ledger A/c for Item allocation to Yes
o Allow modification of Tax Details for GST to Yes

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 Select the party Geeta Sports & Music from the List of Ledger Accounts in Party's A/c
Name
 Select the Sales @ 12% ledger under Sales Ledger. In Tax Classification details screen
select GST 12% from the list of Classifications screen
 Select the GST ledger as SGST, GST amount will be calculated automatically
 In the Bill-wise details for screen, Select New Ref and type the ref as SS/003/17-18 and
accept the default values

1.9.8 Creating Sales Invoice with Multiple GST Rates
Example 8
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On 10-07-2017, Sony Sports sold 30 nos of Badminton Bat at Rs. 1450 with a GST rate of
12%, 30 nos of Cricket Bat at Rs. 2050 with a GST rate of 12%, 30 nos of Studds Helmet at Rs.
2100 with a GST rate of 18%, and 60 nos of Guitar at Rs.2400 with a GST rate of 28% to
Geeta Sports & Music.
Setup :
 In F12: Configure (Sales Invoice),
o Allow modification of Tax Details for GST to No

Name
 In the Accounting Details for screen of Badminton Bat, select Sales @ 12% under
Particulars. Press Enter.
 In the Accounting Details for screen of Cricket Bat, select Sales @ 12% under
 In the Accounting Details for screen of Studds Helmet, select Sales @ 18% under
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 In the Accounting Details for screen of Guitar, select Sales @ 28% under Particulars.
Press Enter twice.
 Select the ledgers for GST as SGST. The GST amount would be automatically calculated
and displayed in the amount columns.
 In the Bill-Wise Details for screen, Select New Ref and type the ref as SS/004/17-18 and
accept the default values.
The Sales Invoice appears as shown:

1.9.9 Printing Sales Invoice
 Press Pg Up from the above screen

 Press Alt+P from the Accounting Voucher Alteration screen to go to Voucher Printing
screen
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 In the Voucher Printing screen, click on T: Titling (Alt + T) button on the button bar to
change the title of the report to Tax Invoice
 To print the company phone number set the option Print with Company Phone No. to
Yes
Figure 1.9.9 Report Title

 Press Enter to save the Report Title screen
 Click on F12 : Configure in Voucher Printing screen to go to Invoice Printing
Configuration Screen to change the following settings:
o Print Party’s PAN /Income Tax No. To Yes
o Print GST % Column
o Print HSN/SAC Column
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Figure 1.9.9.1 Standard Sales Configuration

 Click on F12 : for more option
o Print Declaration to Yes
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Figure 1.9.9.1 Advanced Sales Configuration

 Press Enter to accept the screen and to print
The printed GST Tax Invoice appears as shown:
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Figure 1.9.9.2 Tax Invoice
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1.9.10 Creating Sales Invoice using Voucher Class
Example 9
On 11-07-2017, Sony Sports sold 2 nos of BMX Bicycle at Rs. 2850 with a GST rate of 12% to
Geeta Sports & Music.
Setup :
 Create Voucher Class - Sales @ 12%
Go to Gateway of Tally > Accounts Info > Voucher Types > Alter > Select Sales
 In the Name of Class filed type Sales @ 12% (Press Enter for the rest of the fields)
 Enter the details in the Voucher Type Class screen as shown
Figure 1.9.10 Sales @ 12% Class

 Set/Alter Tax Class to Yes and Select GST Classification as GST 12%
 Press Enter to accept the Voucher Type Class
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 Press Ctrl + A to accept the Voucher Type Alteration Screen

 Select Sales @ 18% in Voucher Class field and the GST ledger will be pre-filled
automatically as GST ledger.
Name
 Enter the quantity as 2 and rate as 2850 and press Enter.
 The GST (SGST and CGST) amount is automatically calculated and will be displayed in
the amount columns of GST.
 In the Bill-Wise Details for screen, Select New Ref and type the ref as SS/005/17-18 and
accept the default values.

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1.10 Accounting for returns of the goods in Tally.ERP 9
Purchases returns, or returns outwards and Sales returns or returns inwards, are normal parts of
business. Goods may be returned due to numerous reasons such as defectiveness, expired or
short delivered and so on. We have to account for such transactions using Credit Notes and Debit
Notes.
1.10.1 Sales Returns
Example 10:
On 12-7-2017, Geeta Sports & Music returned 1 Nos. of BMX Bicycle to Sony Sports against
bill no SS/003/17-18, dated 08/07/2017.
Setup :
 To enable Debit / Credit Notes, press F11:Features (F1 : Accounting Features) and set
the options as un under,
o Use Debit/Credit Notes to Yes
o Record credit notes in invoice mode to Yes
o Record debit notes in invoice mode to Yes
Create Credit Note

Go to Gateway of Tally > Accounting Vouchers > F8: Credit Note (As Invoice)
 Type Credit Note Voucher No in Ref : CNSS/001/17-18 and Date as 12/07/2017
Name
automatically. Press Enter.
 In Accounting Details for screen of BMX Bicycle, select Sales @ 12% and amount by
 Select the ledgers for GST as SGST. The GST amount would be automatically calculated
and displayed in the amount columns.
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 Enable the Provide GST Details, Select the reason for Issuing Note as 01-Sales
Return
 In the Bill-wise details for screen, Select Agst Ref SS/003/17-18 and Press Enter to
accept the screen.
The Credit Note Voucher will appear as shown:
Figure 1.10.1 Credit Note

1.10.2 Purchase Returns
Example 11:
On 13-7-2017, Sony Sports returns 2 Nos. of BMX Bicycle to Sachin Sports, against purchase
dated 04/07/2017 bill No. SS/130/17-18.
Create Debit Note Voucher

Go to Gateway of Tally > Accounting Vouchers > F9: Debit Note (As Invoice)
 Type Debit Note Voucher No in Ref : DNSS/016/17-18 and Date as 29/05/2017.
 Select the party Sachin Sports from the List of Ledger Accounts in Party's A/c Name.
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 In Accounting Details for screen of BMX Bicycle, select Purchase @ 12% and
amount by default will come. Press Enter Twice.
 Enable the Provide GST Details, Select the reason for Issuing Note as 01-Sales
Return
accept the screen.
The Debit Note Voucher will appear as shown:
Figure 1.10.2 Debit Note Voucher

1.11 Rate Difference in Purchase and Sales in Tally.ERP 9
Due to change of demand and supply in the market price of commodity varies frequently. So to
get accurate tax liability, we have to record such transactions.
We have to account for such transactions using Credit Notes and Debit Notes.
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1.11.1 Rate Difference in Sales
Example 12:
On 14-7-2017, Sony Sports allowed a discount to A1 Sports Equipment for 40 Cricket Bat at
Rs. 50 each against bill no SS/002/17-18, dated 07/07/2017. GST @ 12% was reversed as per
discount.
Create Credit Note

Go to Gateway of Tally > Accounting Vouchers > F8: Credit Note (As Invoice)
 Type Credit Note Voucher No in Ref : CNSS/002/17-18 and Date as 14/07/2017
Name
 Enter the quantity as 0 and type Amount as 2000. Press Enter.
 In Accounting Details for screen of Cricket Bat, select Sales @ 12% and amount by
 Enable the Provide GST Details, Select the reason for Issuing Note as 04-Correction
in Invoice
accept the screen.
The Credit Note Voucher will appear as shown:
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Figure 1.11.1 Credit Note

1.11.2 Rate Difference in Purchase
Example 13:
On 15-07-2017, Perfect Sports Ltd allowed a rate difference of Rs.50 each for 50 Cricket Bat
against bill no PS/21/17-18, dated 03/07/2017. GST @ 12% was reversed as per discount.
Create Debit Note Voucher

Go to Gateway of Tally > Accounting Vouchers > F9: Debit Note (As Invoice)
 Type Debit Note Voucher No in Ref : DNSS/038/17-18 and Date as 15/07/2017.
 Select the party Perfect Sports Ltd from the List of Ledger Accounts in Party's A/c
Name.
 Enter the quantity as 0 and type Amount as 2500. Press Enter.
 In Accounting Details for screen of Cricket Bat, select Purchase @ 12% and amount
by default will come. Press Enter Twice.
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 Enable the Provide GST Details, Select the reason for Issuing Note as 04-Correction
in Invoice
 In the Bill-wise details for screen, Select Agst Ref PS/21/17-18 and Press Enter to
accept the screen.
The Debit Note Voucher will appear as shown:
Figure 1.11.2 Debit Note Voucher

1.12 Nil Rated Transactions under GST in Tally.ERP 9
The purchase of nil rated goods from a local or interstate supplier does not attract GST.
1.12.1 Nil Rated Purchase
Example 14:
On 17-7-2017, Sony Sports purchased 1000 nos of Slate Pencils at Rs. 5 each for education
purposes from A 1 Stationery.
Setup:
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 Create Nil Rated Purchases ledger

o Name : Nil Rated Purchases
o Under : Purchase Account
o Is GST Applicable : Applicable
o Set/Alter GST Details : Yes
o Classification : Undefined
o Nature of transaction : Purchase Nil Rated
o Taxability : Nil Rated
o Type of Supply : Goods
 Create the party ledger as A 1 Stationery
o Name : A 1 Stationery
o Under : Sundry Creditors
o Maintain balances bill-by-bill : Yes
o Address : Fort, Mumbai 400001
o Registration type : Regular
o GSTIN/UIN : 27AACPD2496B1Z4
 Create a Stock Item as Slate Pencils
o Name : Slate Pencils
o Under : Primary
o Units : Nos.
o GST Applicable : Applicable
o Set/alter GST Details : Yes
o HSN Code : 96099010
o Taxability : Nil Rated
Go to Gateway of Tally > Accounting Vouchers > F9: Purchase > Select As Invoice
 In F12: Configuration, set Use Common Ledger A/c for Item Allocation to Yes
 Press F2 and specify the voucher date to 17/07/2017
 Type Supplier Invoice No : A1S/031/17-18 and Date as 17/07/2017
 Select the party A 1 Stationery from the List of Ledger Accounts in Party's A/c Name
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 Select the Nil Rated Purchases ledger under Purchase Ledger.

 Select the stock item Slate Pencils in the Inventory Allocation screen
automatically. Press Enter to accept the screen

1.12.2 SEZ Sales
The sale of goods and services to a party in an SEZ can be recorded using a sales vouchers. In
an SEZ sales transaction, taxes are applicable based on the type of sale:
 Taxable SEZ sale: In SEZ sales, integrated tax is applicable for both local and interstate
parties.
 Exempt SEZ sale: No tax is applicable.
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 SEZ sale under LUT/bond: No tax is applicable. SEZ sales under LUT/bond are allowed
when you have signed up a letter of undertaking with the department for the sale of goods
without the payment of duty.
Example 15:
On 18-07-2017, Sony Sports sold 5 Nos. of Guitars to Raj Music Shop, Seepz, Andheri at
Rs.2300 each.
Setup:
 Create Sales SEZ ledger
o Name : Sales SEZ
o Under : Sales Account
o Nature of transaction : Sales to SEZ - Taxable
 Create the party ledger as Raj Music Shop
o Name : Raj Music Shop
o Under : Sundry Debtors
o Address : Seepz, Andheri, Mumbai 400096
o Party Type : SEZ
o GSTIN/UIN : 27AADPP2654A1Z1

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 Select the party Raj Music Shop from the List of Ledger Accounts in Party's A/c Name
 Select the Sales SEZ ledger under Sales Ledger.
 Select the stock item Guitar in the Inventory Allocation screen
automatically. Press Enter to accept the screen.
 Select GST Ledger as IGST, GST amount will come automatically. Press Enter
 Enable the Provide GST Details, Type the shipping bill no as STAPL 4075
 In the Bill-wise details for screen, Select New and type the Ref as SS/006/17-18 and
Press Enter to accept the screen

1.13 Purchases from Unregistered Dealers in Tally.ERP 9
A dealer who has not registered for GST is called as an unregistered dealer. Unregistered dealers
cannot issue a tax invoice required for claiming input credit. When a registered dealer purchases
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from an unregistered dealer, he raises the liability on behalf of the unregistered dealer and pay
the tax to the department. The registered dealer then claim ITC for the tax paid.
1.13.1 Purchase from Unregistered Dealer
Example 16 :
On 19-7-2017, Sony Sports purchased 50 nos of Badminton Bat at Rs. 1050 each from an
unregistered dealer, Mahalaxmi Sports
Setup:
 Create the ledger Purchase from URD
o Name : Purchase from URD
o Nature of transaction : Purchase from Unregistered Dealer – Taxable
Set the option Enable reverse charge calculation? to Yes in the Configuration screen of GST
Details screen
o Is reverse charge applicable : Yes
 Create Mahalaxmi Sports ledger
o Name : Mahalaxmi Sports
o Address : Mumbai 400002
o Registration type : Unregistered

Go to Gateway of Tally > Accounting Vouchers > F9: Purchase
 Press F2 and specify the voucher date to 19/07/2017
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 Type Supplier Invoice No : MS/091/17-18 and Date as 19/07/2017

 Select the party Mahalaxmi Sports from the List of Ledger Accounts in Party's A/c
Name
 Select the Purchase from URD ledger under Purchase Ledger.
automatically. Press Enter to accept the screen
 Click A: Tax Analysis to view the tax breakup.
Figure 1.131. Tax Analysis
 Press Esc to come to Account Voucher Creation Screen.

The Purchase Voucher is as shown:
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Figure 1.13.1. Purchase Invoice

Recording a journal voucher to raise tax liability and Input Tax Credit
To record a journal voucher to raise the tax liability and Input Tax Credit
1. Go to Gateway of Tally > Accounting Vouchers > F7: Journal.

2. Click J: Stat Adjustment.
3. Select the options as shown below.
Figure 1.13.2. Stat Adjustment
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4. Click F2: Date and change the voucher date as 19/07/2017

5. In Debit Select CGST Ledge, Type rate as 6% and Taxable Value as 52500 and in
Amount field type the amount as 3150.
6. Once again do the Debit and Select SGST Ledge, Type rate as 6% and Taxable Value
as 52500 and in Amount field type the amount as 3150
7. In Credit Select CGST Ledge, Type rate as 6% and Taxable Value as 52500. In Amount
field retype the amount as 3150.
8. Once again do the Credit and Select SGST Ledge, Type rate as 6% and Taxable Value
as 52500 and in Amount field type the amount as 3150
Figure 1.13.3. Journal Voucher
9. Press Enter to save.
1.14 Inter-State Sales and Purchase in Tally.ERP 9
Business organizations do transact with different state. Purchase out of the state is called inster-
state purchase and attract IGST,
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1.14.1 Inter-state purchase
Example 17 :
On 20-7-2017, Sony Sports purchased 20 Nos. of Badminton Bat from Saina Nehwal Sports,
Jaipur at Rs.1050 each. GST @ 12% is applicable.
Setup :
 Create a Party ledger
o Name : Saina Nehwal Sports
o Address : Jaipur, Rajasthan 302020
o GSTIN/UIN : 08ANKPK4754G1ZR
 Create a Inter-State Purchase ledger
o Name : Inter-State Purchase
o Nature of transaction : Not Applicable

 Type Supplier Invoice No : SN/098/17-18 and Date as 20/07/2017
 Select the party Saina Nehwal Sports from the List of Ledger Accounts in Party's A/c
Name
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 Select the Inter-State Purchase ledger under Purchase Ledger.

 Select the GST ledger as IGST, amount will be calculated automatically. Press Enter.

1.14.2 Inter-State Sales
Example 18 :
On 21-7-2017, Sony Sports sold 10 Nos. of Studds Helmet Rs.2150 each to Mega Sports
Tamilnadu. GST is applicable.
Setup :
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o Name : Mega Sports

o Address : Chennai, Tamil Nadu 600018
o GSTIN/UIN : 33AAPFR4365N1ZK
 Create a Inter-State Sales ledger
o Name : Inter-State Sales
o Nature of transaction : Not Applicable

 Press F2 and change the date as 21/07/2017
 Type Invoice No in Ref : SS/007/17-18
 Select the party Mega Sports from the List of Ledger Accounts in Party's A/c Name
 Select the Inter-State Sales ledger under Sales Ledger.
 Select the stock item Studds Helmet in the Inventory Allocation screen
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1.15 Transaction with multi GST rate and multi inventory in Tally.ERP 9
Tally.ERP 9 allows you to pass Purchase and Sales entries having more than inventory plus
multi GST rate.
1.15.1 Sales with multiple GST rate and multi inventory
Example 19
On 22-07-2017, Sony Sports sold 50 nos of Badminton Bat at Rs. 1450 with a GST rate of
12%, 20 nos of Cricket Bat at Rs. 2050 with a GST rate of 12%, 5 nos of Studds Helmet at Rs.
2150 with a GST rate of 18% and 20 nos of Guitar at Rs.2500 with a GST rate of 28% to A1
Sports Equipment, Mumbai.
Setup :
 In F12: Configure (Sales Invoice),
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o Allow modification of Tax details for GST to No

Name
 In the Accounting Details for screen of Badminton Bat, select Sales @ 12% under
Particulars.
 In the Accounting Details for screen of Cricket Bat, select Sales @ 12% under
Particulars.
 In the Accounting Details for screen of Studds Helmet, select Sales @ 18% under
Particulars
 In the Accounting Details for screen of Guitar, select Sales @ 28% under Particulars.
Press Enter twice.
 Select the ledgers GST as SGST and amount would be automatically calculated and
displayed in the amount columns.
 Similarly Select CGST Ledger and amount would be calculated automatically. Press
Enter
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 In the Bill-Wise Details for screen, Select New and type the Ref as SS/008/17-18 and

1.16 Export Sales
In an export sales transaction, taxes are applicable based on the type of export:
 Taxable export: Integrated tax is applicable. Select Exports Taxable as the Nature of
transaction in the sales ledger created for taxable exports.
 Exempt export: No tax is applicable. Select Exports Exempt as the Nature of
transaction in the sales ledger created for exempt exports.
 Export under LUT/bond: No tax is applicable. Select Exports LUT/Bond as the Nature
of transaction in the sales ledger created for exports under LUT/bond.
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o Export under LUT/bond is applicable when you have signed up a letter of

undertaking with the department for the export of goods without the payment of
duty.
o To provide details of the LUT/bond, enable the options Enable Goods and
Services Tax (GST)? and Set/alter GST details? in Statutory and
Taxation features. In the Company GST Details screen that opens, enable the
option Provide LUT/Bond details?, and enter the details in the LUT/Bond
Details screen.
Example 20 :
On 23-7-2017, Sony Sports sold 25 Nos. of Badminton Bat Rs.1650 each to M N Sports Oman.
GST is applicable.
Setup :
o Name : M N Sports
o Country : Oman
 Create a Sales Export
o Name : Sales Export
o Nature of transaction : Exports Taxable

 Press F2 and change the date as 23/07/2017
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 Select the party M N Sports from the List of Ledger Accounts in Party's A/c Name
automatically. Press Enter
 In the Accounting Details for screen of Badminton Bat, select Sales Export under
Particulars.
 Enable the Provide GST Details, Type the shipping bill no as SS/009/17-18 and Port
Code as STAPL 7820

1.17 Adjustment toward Tax Credit Under GST in Tally.ERP 9

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The tax credits of central tax, integrated tax and state tax can be used to set-off the liability of
central tax, state tax/UT tax and integrated tax in the order specified under GST.
iv. Create Journal Voucher

Go to Gateway of Tally > Accounting Vouchers > F7: Journal
To record a journal voucher for cross utilisation of tax credits

2. Press F2 and change the date as 31/07/2017
4. In the Stat Adjustment Details screen, select the options as shown below:
Figure 1.17.1 Stat Adjustment
5. Press Enter to save and return to the journal voucher.

6. In the journal voucher, debit and credit the ledgers as per the mentioned below:
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Figure 1.17.2 Journal Voucher

1.18 Payment of GST in Tally.ERP 9
Example 21 :
On 02-08-2017, Sony Sports paid Rs. 23,155/- towards GST payable for the period from July
2017.
Setup :
 Create a ledger HDFC Bank
Name Under Opening Balance
HDFC Bank Bank Accounts 40,000 Dr
 Press F12: Payment Configuration and set Use Single Entry Mode for
Pymt/Rcpt/Contra to Yes
Create Payment Voucher

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1. Go to Gateway of Tally > Accounting Vouchers > F5: Payment.

2. Click S: Stat Payment and enter the required details.
Figure 1.18.1 Statutory Payment
Payment Type: Set the type of payment as Regular.
3. In Account field Select the Ledger HDFC Bank and Press Enter
4. In particular filed select ledger SGST and type amount Rs. 3667.50
5. In particular filed select one more ledger CGST and type amount Rs. 3667.50
6. In particular filed select one more ledger IGST and type amount Rs. 9520
7. Provide GST details: Enable this option to enter the bank details.
Figure 1.18.2 Bank Details
Note: If the bank details are not available, you can enter them later in the Challan
Reconciliation report.
8. Press Enter
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Figure 1.18.3 Payment Voucher

1.19 GST Reports in Tally.ERP 9
In Tally.ERP 9, the following GST reports are available for registered dealers:
 GSTR-1
 GSTR-2
 Challan Reconciliation
 GST Rate Setup
 Update Party GSTIN
1.19.1 GSTR1
GSTR-1 is the monthly GST return to be filed by taxable person registered under GST. GSTR-1
will include the details of all outward supplies made in the given period. In the standard format
released by the department, GSTR-1 return form is divided into multiple tables, each table is
used for a different type of outward supply. In Tally.ERP 9, GSTR-1 can be viewed in a report
format with tax computation details. This report can be changed to table-wise
format (department format) with the click of a button.
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All transactions, whether recorded correctly, incorrectly or inadequately, are captured and
categorised in this report. Further, to help you verify the tax details before exporting the returns,
the GSTR-1 report in Tally.ERP 9 provides you with options to resolve exceptions in
transactions that are not forming part of the returns due to incomplete information or mismatch.
The report also enables you to update the status of each transaction in the return based on the
acceptance and reconciliation status of the transaction on GSTN portal using the Status
Reconciliation option.
To view the report
● Go to Gateway of Tally > Display > Statutory Reports > GST > GSTR–1.
The GSTR-1 report appears as shown:
Figure 1.19.1 GSTR-1
The different sections of the report are:
Returns Summary: This section displays a snapshot of business operations in the given period.
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Particulars (computation details): This section displays the taxable value and tax amount from
outward supplies considered in the returns.
Drill down from any part to display detailed information at the subsequent levels.
F12: Configure
Show break-up of net values?: Enable this option to display Gross Value, Returns, and
Addition/Deduction values in detailed mode of the report. This option is disabled by default.
Show tax types in separate columns?: Enable this option to view all GST tax types in separate
columns. This option is enabled by default. When this option is displayed, tax amount is
displayed in a single column without the Central Tax, state tax and integrated tax break-up.
1.19.2 GSTR-2
will include the details of all inward supplies made in the given period. In the standard format
used for a different type of inward supply. In Tally.ERP 9, GSTR-2 can be viewed in a report
To view the report
1. Go to Gateway of Tally > Display > Statutory Reports > GST > GSTR–2.
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inward supplies considered in the returns.
F12: Configure
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1.19.3 GSTR-3B
Form GSTR-3B is an interim return form the GST dealers with regular registration should use,
to file monthly returns. From Tally.ERP 9, you can generate GSTR-3B, export the data in the
JSON format, and upload it to the portal to file the returns.
In Tally.ERP 9, you can view GSTR-3B in the report format with tax computation details. This
report can be changed to the return format view (specified/prescribed by the department) with
the click of a button.
To view the GSTR-3B report
● Go to Gateway of Tally > Display > Statutory Reports > GST > GSTR-3B.
1.19.4 Challan Reconciliation
It displays the transaction details of tax payment vouchers recorded for paying GST dues are
displayed in Tax Payment Reconciliation report. If the payment details were not provided in
the payment voucher, the same can be entered directly in this report. Details of payments made
towards tax dues - GST and other liabilities, during the return period is displayed here.
To view Challan Reconciliation report,
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Go to Gateway of Tally > Display > Statutory Reports > GST > Challan Reconciliation
All the tax payment vouchers recorded for paying GST and other liabilities are displayed
in Challan Reconciliation report. For each payment, the bank and challan details can be
provided from this report.
To view the Challan Reconciliation report
● Go to Gateway of Tally > Display > Statutory Reports > GST > Challan
Reconciliation.
Press F12 Configuration : Show transactions having challan details to Yes
Figure 1.19.4 Challan Reconciliation
The description of each column of Challan Reconciliation report is given below:
Column Names Description
Date Displays the payment voucher date.
Particulars Displays the bank or cash ledger selected in payment voucher.
Vch Type Displays the name of the voucher type as Payment.
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Vch No. Displays the payment voucher number.
Displays GST (which is selected as the Tax Type in the Stat

Type of Tax Payment
Payment Details screen of payment voucher).
Displays the From and To dates entered in Stat Payment

Payment Period
Details screen of Challan Reconciliation report.
Displays the payment type based as Interest, Late

Type of Payment Fee, Others or Penalty, selected for the first ledger in the payment
voucher.
Displays the Mode of payment selected in the payment voucher or

Mode of payment
in the Challan Reconciliation report.
Displays the Bank Name entered in the payment voucher or in

Bank Name
the Challan Reconciliation report.
Common Portal Displays the Common Portal Identification Number

Identification Number (CPIN) entered in the payment voucher or in theChallan
(CPIN) Reconciliation report.
Challan Identification Displays the Challan Identification Number (CIN) entered in the
Number (CIN) payment voucher or in the Challan Reconciliation report.
Displays the BRN/UTR entered in the payment voucher or in

BRN/UTR
Displays the Instrument number (if the mode of payment is

Instrument Number selected as cheque or demand draft) entered in the payment voucher
or in the Challan Reconciliation report.
Displays the Instrument date (if the mode of payment is selected
Instrument Date as cheque or demand draft) entered in the payment voucher or in
Displays the Payment date entered in the payment voucher or in

Payment Date
Amount Displays the amount entered in the payment voucher.
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1.19.5 Purchase Register
The Purchase Register provides complete details of all the purchases made in a particular tax
period.
To view Purchase Register report,

1. Go to Gateway of Tally > Display > Account Books > Purchase Register
2. Select July Month and Press Enter
3. Press F2:Period and change period from 01/04/2017 to 31/07/2017
4. Click on F5 : Columnar
Figure 1.19.5.1 Columnar Registrar

5. Press Enter
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The Purchase Register appears as shown:
Figure 1.19.5.2 Purchase Columnar Register
1.19.6 Sales Register
The Sales Register provides complete details of all the sales made in a particular tax period.
To view Sales Register report,
1. Go to Gateway of Tally > Display > Account Books > Sales Register
2. Select July Month and Press Enter
3. Press F2:Period and change period from 01/07/2017 to 31/07/2017
4. Click on F5 : Columnar
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Figure 1.19.6.1 Columnar Registrar

5. Press Enter
The Sales Register appears as shown:
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Figure 1.19.6.2 Sales Columnar Register
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Lesson 2: Tax Deducted at Source
2.1 Introduction
Tax deducted at source is one of the modes of collecting Income Tax from the assesses. In
simple terms, TDS is the tax deducted from the third parties (deductee) by the payer (deductor)
and deposited into the designated banks within the specified period. The Assessee who deducts
tax at source is liable to issue a certificate to the deductee for the amount deducted alongwith
payment details, so that the same can be submitted to Income Tax authorities.
2.1.1. TDS Process

1. Deductee (Seller) provides Services and Bill to the Deductor (Buyer).
2. Deductor makes the payment after deducting TDS.
3. Deductor remits the TDS amount into Bank (Treasury).
4. Bank (Treasury) remit the amount to the Government Account.
5. Deductor Issues Form 16A to Deductee for the TDS amount deducted.
6. Deductor Files the e-TDS to NSDL.
7. NSDL uploads the e-TDS information to Income Tax Department.
8. Deductee Files the Return with Form 16A to Income tax Department.
1. Bill No 1 Rs. 50,000 3.Remitting

Deductee Deductor TDS in Bank Bank
(Seller) 2. Payment after deducting TDS (Buyer) Rs. 5,000
(Rs. 50,000 – Rs. 5,000 = Rs. 45,000)
5. Deductor issue Form 16A 4. Bank

6. Deductor filing
Remit TDS to
e-tds to NSDL
Govt
NSDL
7. NSDL Upoload
information to IT Dept
8. Deductee filing
the IT Return
Income Tax Department
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2.1.2 Features of TDS compliant Tally.ERP 9

 Simple, quick & User friendly.
 Maintains complete tracking of each transaction.
 Allows deduction of TDS at the time of booking expenses in the same voucher or
separately at a later date.
 Allows deduction of TDS at Lower / Zero Rate and deduction of TDS on multiple
expenses of single nature of payment type in a single voucher.
 Allows computation of TDS on expenses partly subject to tax and on advance payments.
 Provides facility to compute TDS with / without considering Surcharge Exemption
Limits for parties.
 Provides retrospective surcharge calculations for prior / current period.
 Allows partial / full payment of Tax deducted at source.
 Provides automatic computation of TDS amount for each nature of payment.
 Generates TDS Certificates, TDS Outstanding report and various other TDS related MIS
Reports.
 Facilitates automatic generation of quarterly as well as annual eTDS returns in the
physical as well as e-Return formats.
 Allows Challan reconciliation facility to keep track of issue of TDS certificates and
remittance through challans.
 Also generates consolidated TDS Certificates, Challans and Annual Returns for statutory
and tax audit purposes.
2.2 Configuring TDS in Tally.ERP 9
TDS in Tally.ERP 9 manages all the TDS and eTDS requirements of the business and automates
the TDS management with accurate tax computation. It further assists you to file tax returns in
electronic format, thus minimizing the errors during entry.
2.2.1 Company Setup
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Figure 2.2.1 Company Creation – R & V Solutions Pvt Ltd
2.2.2 Enabling TDS in Tally.ERP 9

Go to Gateway of Tally > F11: Features > F3: Statutory & Taxation
 Set Enable Tax Deducted at Source (TDS) to Yes

 Enable Set/Alter TDS Details and press Enter
 In Company TDS Deductor Details screen,
o Specify TAN registration number : T12254321PBC
o Specify Tax Deduction Account Number (TAN) : RVMH35641C
o Select the Deductor Type : Company
o Deductor branch/division : Mumbai
o Enable the option Set/alter details of person responsible.
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Enter the details as shown below:
Figure 2.2.2.1. Person Responsible Details
o Press Enter.
o Enter the Rate of TDS if PAN not available : 20%
o Enable the option Ignore IT Exemption Limit for TDS Deduction, if required.
o Enable the option Activate TDS for stock items, if required.
The TDS Deductor Details screen appears as shown below:
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Figure 2.2.2.2 Company TDS Deductor Details
o Press Enter.
o Press Ctrl + A to save the details.
o Press Enter to Accept the screen
The Statutory and Taxation screen is as shown:
Figure 2.2.2.3. Statutory and Taxation Features screen
2.3 TDS Statutory Masters
The statutory masters contains details of TDS nature of payments, Deductee Types, rate of TDS
for each nature of payment and period of applicability.
2.3.1 TDS Nature of Payments

To create TDS nature of payment
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o Go to Gateway of Tally > Accounts Info. > Statutory Info. > TDS Nature of
Pymts > Create
o Enter the Name : Fees for Professional or Technical Services
o Enter the Section number : 194J
o Enter the Payment Code : 94J
o Enter the Rate of TDS : 10%
o Enter the Threshold/exemption limit : 30,000
o Click F12: Configure to configure more options if required.
The TDS Nature of Payment Creation screen appears as shown below:
Figure 2.3.1. Statutory and Taxation Features screen
7. Press Enter to save the details.
Similarly create following TDS Nature of Payment

Name Payment to Commission Or Rent of Land,
Contractors (Other Brokerage Building or
than Individual or Furniture
HUF)
Section 194C 194H 194I
Payment Code 94C 94H 94I
Rate 2% 5% 10%
Threshold/exemption 30,000 15,000 1,80,000
limit
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2.4 Recording Transactions
2.4.1 Booking Expenses and Deducting TDS

Illustration 1 :
On 01-04-2017, R & V Solutions Pvt Ltd received a bill (Vide No. PCS/001/17-18) from Prithvi
Consulting Services, for Rs. 48,000/- towards Consultancy Charges. Consultancy Charges is
subject to TDS under ‘Fees for Professional or Technical Services’ Nature of Payments.
The applicable Income tax rates for payment of ‘Fees for Professional or Technical Services’
to ‘Company Resident Deductee’ Type is TDS – 10%
Setup :
Go to Gateway of Tally > Accounts Info. > Ledgers > Create.
 Create the ledger Prithvi Consulting Services under Sundry Creditors with
o Maintain balances bill-by-bill to Yes
o Is TDS Deductable to Yes
o Deductee Type as Company – Resident
o Deduct TDS in Same Voucher to Yes
o In List of Nature of Payment select All Items
o Use Advance TDS Entries to No
o PAN/IT No. as AGBPP8210B
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The Ledger Creation screen appears as shown below:
Figure 2.4.1.1 Ledger Creation- Prithvi Consulting Services
 Create the ledger Consultation Charges under Indirect Expenses with

o Inventory Values are affected as No
o Is TDS Applicable as Applicable
o Nature of Payment as Fees for Professional Or Technical Services
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Figure 2.4.1.2 Ledger Creation - Consultation Charges
 Create the TDS tax ledger TDS on Consultancy Charges under Duties & Taxes with
o Type of Duty/Tax as TDS
o Nature of Payment as Fees for Professional Or Technical Services
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Figure 2.4.1.3 Ledger Creation - TDS on Consultancy Charges
Create Journal Voucher

Go to Gateway of Tally > Accounting Vouchers > Press F7: Journal
1. Press F2 and specify the voucher date as 01/04/2017

2. Select the expense ledger as Consultation Charges in the Debit field and press Enter
3. Enter the Amount as 48,000/-
4. Select the ledger as Prithvi Consulting Services in the Credit field. The amount after
TDS deduction will appear in the Amount field automatically. Press Enter.
5. In Bill–wise Details screen,
 Select New Ref as the Type of Ref
 In the Name field, enter the bill name PCS/001/17-18
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 Skip the Due Date or Credit Days field

 Accept the default amount allocation and Dr/Cr
The Bill-wise Details screen appears as shown:
Figure 2.4.1.4 Bill-wise Details
Note : In the above screen, the amount payable to the party after deduction of TDS is displayed
separately and the TDS deducted amount is displayed separately for easy identification of bill
amount in the outstanding statement.
6. Press Enter
7. Select the TDS ledger as TDS on Consultancy Charges in the Credit field. The TDS
amount will automatically filled in the Amount field. Press Enter.
8. Enter Narration, if required.
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The Journal Voucher is displayed as shown:
Figure 2.4.1.5 Journal Voucher
9. Press Enter to accept
Illustration 2 :
On 13-04-2017, R & V Solutions Pvt Ltd received a single advertisement contract, Bill (Vide
No. SAA/102) for Rs. 80,000/- from Southern Advertisement Agency towards Advertisement
Expenses. The applicable Income tax rates for ‘Advertisement Expenses’ payable to
‘Contractors’ is TDS - 2%
Setup :
 Create the ledger Southern Advertising Agency under Sundry Creditors with
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o Deductee Type as Partnership Firm

o Deduct TDS in Same Voucher to Yes
o Select All Items as Nature of Payment
o PAN/IT No. as AQBGG8570B
Figure 2.4.1.6 Ledger Creation- Southern Advertising Agency
 Create the ledger Advertisement Expenses under Indirect Expenses with

o Default Nature of Payment as Payment to Contractors (Other than Individual or
HUF)
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Figure 2.4.1.7 Ledger Creation - Advertisement Expenses
 Create the TDS tax ledger TDS on Advertising Expenses under Duties & Taxes with
o Nature of Payment as Fees for Payment to Contractors (Other than Individual
or HUF)
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Figure 2.4.1.8 Ledger Creation - TDS on Advertising Expenses
 In F12: Purchase Invoice Configuration, set Enable Supplementary Details, Use

Common Ledger A/c for Item Allocation and Use Defaults for Bill Allocations to No
Create Purchase Voucher
1. Press Alt + I for Account Invoice mode

3. Supplier Invoice No : SSA/102
4. In Party’s A/c Name field, select the party ledger as Southern Advertising Agency
from the List of Ledger Accounts
5. Under Particulars, select the expense ledger as Advertisement Expenses and press
Enter
6. Type the Amount as 80,000 and press Enter.
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7. Select the TDS ledger as TDS on Advertising Expenses from the List of Ledger
Accounts in Particulars field. The TDS amount will automatically filled in
the Amount field. Press Enter twice.
8. In the Bill-wise Details screen,
 In the Name field, enter the bill name as SAA/102
 Accept the default amount allocation and Dr/Cr and press Enter
Figure 2.4.1.9 Bill-wise Details screen
 Press Enter to accept the amount
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The Purchase Voucher is displayed as shown:
Figure 2.4.1.10 Purchase Voucher
 Press Enter to accept
2.4.2 Booking Expenses and Deducting TDS Later

Illustration 3 :
On 20-04-2017, R & V Solutions Pvt Ltd received a Bill (Vide No. CE/001) for Rs. 25,000/-
from Citi Enterprises towards commission charges. The company intends not to deduct TDS
on the above transaction at the time of booking the expenses.
Setup :
 Create the ledger Citi Enterprises under Sundry Creditors with

o Deductee Type as Body of Individuals
o Deduct TDS in Same Voucher to No.
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o In F12: Configure (Ledger Configuration), set Allow Advanced entries in TDS

Master to Yes
o Use Advanced TDS Entries to Yes
o Ignore Surcharge Exemption Limit to No
o Set Ignore Income Tax Exemption Limit to Applicable
o In Ignore Income Tax Exemption Limit screen select All Items.
o Set/Alter Zero / Lower Deduction to No
o PAN/IT No. as ARTBB4560C
Figure 2.4.2.1 Ledger Creation- Citi Enterprises
 Create the ledger Commission Expenses under Indirect Expenses with

o Nature of Payment as Commission or Brokerage
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Figure 2.4.2.2 Ledger Creation - Commission Expenses
 Create the TDS tax ledger TDS on Commission under Duties & Taxes with
o Nature of Payment as Commission or Brokerage
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Figure 2.4.2.3 Ledger Creation - TDS on Commission

Go to Gateway of Tally > Accounting Vouchers > Press F7 : Journal

2. Select the expense ledger as Commission Expenses in the Debit field and enter the
amount.
3. Enter the Amount as 25,000/-
4. Select the party ledger as Citi Enterprises in the Credit field. The amount will appear in
the Amount field automatically.
5. Press Enter to view Bill–wise Details screen
 In the Name field enter the bill name as CE/001
 Press Enter to accept Bill-wise Details screen
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7. Enter Narration, if required
Illustration 4 :
On 22-04-2017, R & V Solutions Pvt Ltd paid Rs. 78,400/- to Southern Advertisement Agency
towards Advertisement Expenses against bill no. SAA/102 (vide Ch. No. 145687).
Setup :
 In Payment Voucher : F12: Configure, set Use Single Entry mode for
Pymt/Rcpt/Contra to No and Use defaults values for bank details to Yes
 Create the ledger ICICI Bank under Bank Accounts with Opening Balance 10,00,000 Dr.

Go to Gateway of Tally > Accounting Vouchers > Press F5: Payment
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2. In Debit field, select the Southern Advertisement Agency ledger from the List of
Ledger Accounts
3. Enter the Amount as 78,400 and press Enter to view Bill-wise Details screen
4. In Bill-wise Details screen
 Select Agst Ref in the Type of Ref
 Select the Pending Bills as SAA/102 in Name field, Amount is defaulted
automatically
The Bill-wise details screen is as shown:
Figure 2.4.2.5 Bill-wise Details screen
5. In Credit field, select the bank account ledger as ICICI Bank from the List of Ledger
Accounts, the amount is defaulted automatically
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The Payment Voucher is displayed as shown:
Figure 2.4.2.6 Completed Payment Voucher
Illustration 5 :
On 24-04-2017, R & V Solutions Pvt Ltd paid Rs. 43,200/- (vide Ch. No. 145690) to Prithvi
Consulting Services towards final settlement of Bill No. PCS/001/17-18 dt. 01/04/2017.


2. In Debit field, select the Prithvi Consulting Services ledger from the List of Ledger
Accounts
3. Enter the amount as 43,200/- and press enter to view Bill-wise Details screen
4. In Bill-wise Details screen,
 Select the Pending Bills as PCS/001/17-18 in Name field, Amount is defaulted
automatically
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 Press Enter to accept the screen

5. In Credit field, select the bank account ledger as ICICI Bank from the List of Ledger
Accounts, amount is defaulted automatically.
Figure 2.4.2.7 Completed Payment Voucher
2.4.3 TDS Deduction at Lower Rate

The Income Tax Act, as per section 197 allows the benefit of deduction of tax at source at a
lower rate on filing of declaration in the prescribed form, with the payer.
Illustration 6 :
On 25-04-2017, R & V Solutions Pvt Ltd received a bill for Rs. 50,000/- from Cegon
Enterprises towards Commission Charges. Cegon Enterprises has been granted a lower
deduction certificate for deduction of Tax @ 2% on commission.
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Setup :
 Create the ledger Cegon Enterprises under Sundry Creditors with

o Deductee Type as Partnership Firm
o Deduct TDS in Same Voucher to Yes (Select All Items)
o In Advanced TDS Entries screen, Set/Alter Zero / Lower Deduction to Yes
o In Zero / Lower Deduction Details sub-screen
 Select Nature of payment as Commission or Brokerage
 Select Section Number as 197
 Enter the Certificate No./ Date as CE/17-18, Applicable From as 01/04/2017,
Applicable To as 31/03/2018 and TDS rate as 2%.
Figure 2.4.3.1 Zero / Lower Deduction Details
 Press Enter to accept the screen

 PAN/IT No. as ACBGG2312P
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Figure 2.4.3.2 Ledger Creation : Cegon Enterprises
 Press Enter to accept
ii. Create Journal Voucher

2. Select the ledger Commission Expenses in the Debit field and press Enter
3. Enter the amount as 50,000/-
4. Select the ledger as Cegon Enterprises in the Credit field. The amount after TDS
deduction will appear in the Amount field automatically. Press Enter.
 In the Name field, enter the bill name CE/001/17-18
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Figure 2.4.3.3 Bill-wise Details
6. Press Enter
7. Select the TDS ledger as TDS on Commission in the Credit field. The TDS amount will
automatically filled in the Amount field. Press Enter.
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9. Press Enter to accept.
2.4.4 TDS Deduction at Zero Rate

The Income Tax Act, as per section 197A allows the benefit of non-deduction of tax at source to
an individual payee on filing of declaration in the prescribed form with the payer.
Illustration 7 :
On 27-04-2017, R & V Solutions Pvt Ltd received a bill for Rs. 15,000/- from Edens Advisory
Services towards Fees for Professional Services. Edens Advisory Services has been granted a
No Deduction Certificate.
Setup :
 Create the ledger Edens Advisory Services under Sundry Creditors with
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o Deductee Type as Association of Persons
o In Advanced TDS Entries screen, Set/Alter Zero / Lower Deduction to Yes
o In Zero / Lower Deduction Details sub-screen
 Select Nature of payment as Fees for Professional Or Technical Services
 Select Section Number as 197A
 Enter the Certificate No./ Date as EAS/17-18, Applicable From as
01/04/2017, Applicable To as 31/03/2018 and TDS rate as 0%.
Figure 2.4.4.1 Zero / Lower Deduction Details

o PAN/IT No. as ADPGA1567Q and accept the screen

2. Select the ledger as Consultation Charges in the Debit field and press Enter
3. Enter the amount as 15,000/-
4. Select ledger as Edens Advisory Services in the Credit field. The amount will appear in
the Amount field automatically and press Enter.
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 In the Name field, enter the bill name EAS/001/17-18

Illustration 8 :
On 29-04-2017, R & V Solutions Pvt Ltd deducts TDS at the following rates on Commission
payable to Citi Enterprises (vide B.No. CE/001 dt. 20/04/2017). The applicable Income tax
rates for Commission is TDS @ 5%.

2. Press Ctrl +P or click on S: TDS Deduction button, to view TDS Deductions screen
3. In TDS Deductions screen,
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 In Till Date field, enter the date as 29/04/2017 till which the TDS deduction is to be
made
 Select the party ledger as Citi Enterprises from the List of Ledger(s) in the Party
field
 Select the expense ledger as Commission or Brokerage from the List of TDS
Nature of Payments
 Select the Duty Ledger as TDS on Commission from the List of TDS Ledgers
Figure 2.4.4.3 TDS Deduction
 Press Enter to accept the TDS Deductions sub-screen

4. The TDS amount with the respective bill details will be prefilled automatically as
shown:
Figure 2.4.4.4 Journal Voucher with Auto filled TDS values
5. In the Bill-wise Details screen,

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 Select CE/001 dated 20-Apr-2017 in the Name field and press Enter
 The amount is defaulted
 Press Enter to accept the screen
2.4.5 Deducting TDS on Advance Payments

Illustration 9 :
On 29-04-2017, R & V Solutions Pvt Ltd paid Rs. 2,00,000/- to Mr. Vijay Kumar (Landlord)
towards Rent for the month of May and June 2017 (vide Ch. No. 145787). The applicable
Income tax rates for payment of ‘Rent’ to ‘Individual / HUF - Resident’ Deductee Type is
TDS - 10%
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Setup :
 Create the ledger Vijay Kumar under Sundry Creditors with
o Deductee Type as Individual / HUF –Resident
o Use Advanced TDS Entries to No
o PAN/IT No. as ABQPM5437K
 Create the ledger Rent under Indirect Expenses with
o Nature of Payment as Rent of Land, Building Or Furniture
 Create the TDS tax ledger TDS on Rent under Duties & Taxes with
o Nature of Payment as Rent of Land, Building Or Furniture

2. In Debit field, select the ledger as Vijay Kumar from the List of Ledger Accounts
3. Enter the Amount as Rs 2,00,000 and press Enter to view Bill-wise Details screen
4. In Bill-wise Details screen,
 Select Advance in the Type of Ref field
 Enter the Bill name as May & June 17
 Press Enter to skip the Due Date, or Credit Days field
 Press Enter to accept the Amount
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Figure 2.4.5.1 Bill-wise details Screen
 Press Enter to accept the Bill-wise Details screen

5. In the Credit field, select TDS on Rent from the List of Ledger Accounts. The TDS
amount will automatically filled in the Amount field. Press Enter.
6. Once again In Credit field, select the bank account ledger as ICICI Bank from the List
of Ledger Accounts, the balance Amount is defaulted automatically
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Figure 2.4.5.2 Payment Voucher
2.4.6 Payment of TDS

As per Income Tax Act, corporate & non- corporate entities (deductors) making payments to
third parties (deductees) are required to deduct tax at source at the prescribed rates on such
payments. The TDS so deducted should be deposited to the credit of the central government
within one week from the last day of the month in which the deduction is made, into any of the
designated branches of banks authorized to collect taxes on behalf of government accompanied
by Income Tax Challan ITNS 281.
Illustration 10:
On 05-05-2017, M/s. National Enterprises paid Rs. 4,800/- to Government towards TDS on
Consulting Charges for the month of April 2017.
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Setup :
 In F12: Configure (Payment Configuration), set Use Single Entry mode for
Pymt/Rcpt/ Contra to Yes

2. Press Alt+S or click S: Stat Payment button, to view Statutory Payment screen
3. In the Statutory Payment screen,
 Select TDS from the list in the Type of Duty/Tax field
 Enter the Period From as 01/04/2017 and To as 30/04/2017
 Enter Deducted Till Date as 30/04/2017
 Select 194J in the Section field
 Select the Fees for Professional or Technical Services as Nature of Payment
 Select the Deductee Status as All Items
 Select the Residential Status as Resident
 Select the bank account ledger as ICICI Bank from the List of Ledger Accounts
4. The Statutory Payment screen is displayed as shown:
Figure 2.4.6.1 TDS Statutory Payment
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 Press Enter to accept the Statutory Payment screen

5. The bank ledger selected in the Statutory Payment screen is defaulted automatically in
the Account field
6. Press Enter and Enter Narration, if required
The TDS Payment voucher is displayed as shown:
Figure 2.4.6.2 TDS Payment Voucher
Illustration 11:
On 05-05-2017, R & V Solutions Pvt Ltd paid Rs. 1,600/- to Government towards TDS on
Advertisement Expenses for the month of April 2017.

1. Press F2 and specify the date as 05/05/2017

3. In Statutory Payment screen,
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 Select 194C in the Section field
 Select the Payment to Contractors (Advertisement Contractors) as Nature of
Payment
The Statutory Payment screen is displayed as shown:

4. The Bank Ledger selected in the Statutory Payment screen is defaulted automatically in
the Account field
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The Payment voucher will appear as shown:
Illustration 12:
On 05-05-2017, M/s. National Enterprises paid Rs. 2,250/- to Government towards TDS on
Commission for the month of April 2017.


3. In the Statutory Payment Screen,
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 Select 194H in the Section field

 Select the Commission or Brokerage as Nature of Payment
The Statutory Payment screen is displayed as shown:

4. The Bank Ledger selected in the Statutory Payment screen is defaulted automatically in
the Account field
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The completed Payment voucher will appear as shown:
2.5 TDS Reports
The following TDS Reports can be generated in Tally.ERP 9:
 Form 26Q
 Form 27Q
 Return Transaction Book
 TDS Challan
 TDS Statutory Returns
To view the TDS Reports,
Go to Gateway of Tally > Display > Statutory Reports > TDS Reports
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Figure 2.5.1 TDS Reports
Challan Reconciliation
As per Income Tax Act, the details of payment of Tax Deducted at Source are required to be
furnished in the TDS certificate issued to the deductee. For this purpose, the Challan details
containing the information in respect of Bank Challan No. & Date, Bank Name, BSR Code etc.,
are required to be specified.
Tally.ERP 9 allows the user to enter all the required information as specified by the statutes, by
using the Challan Reconciliation facility.
Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > Challan
Reconciliation
 Press F5: Challan Reconcile

 Enter the Challan details as mention in below
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Figure 2.5.2 Challan Reconciliation
 Press Enter to accept the Challan Details
Return
Corporate & non- corporate entities (deductors) responsible for making payments to third parties
(deductees) and deducting tax at source at the prescribed rates on such payments are required to
furnish TDS returns containing details of deductee(s) and the payment details relating to the
deposit of such tax to Income Tax Department. Tally.ERP 9 allows you to generate and print
statutory returns in physical as well as uploadable formats as prescribed by the government. In
Tally.ERP 9, you can generate the following Quarterly/Annual Returns
 Form 26Q
 Form 27Q
Form 26Q,
is the Quarterly return of TDS in respect of all payments other than salaries. This is applicable
for Resident and the due date for Government entities is July 31st, October 31st, January 31st,
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and May 15th; for non-government entities the due dates for filing returns are July 15th, October
15th, January 15th, and May 15th.
To Generate Form 26Q
Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > Form 26Q
Figure 2.5.3 Form 26Q
The Form 26Q report has the following sections:
Statistics of Vouchers :
All transactions, whether recorded correctly, incorrectly, or inadequately will be captured and
categorized in the Form 26Q report as follows:
Included
These are transactions that will be a part of Form 26Q. Transactions that will be considered as
Included for generating Form 26Q are:
 Booking entries, with or without TDS deduction
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 TDS deduction entries
 Advance payments made to parties
 TDS adjustment entries (in the case of government entities)
 Entries accounting for TDS reversals and TDS deduction w.r.t escalations and de-
escalations
Excluded
These are transactions that do not carry the TDS details that are requisite to generate Form 26Q,
and hence will be excluded while generating the form. Transactions that will be considered as
Excluded for generating Form 26Q:
 All entries where TDS is not applied
 Entries recorded using any of the following Voucher Types:
o Payment
o Contra
o Inventory Vouchers
o Sales Order
o Purchase Order
o Debit Note (recorded for purchases with no TDS implications)
o Credit Note (entries with no TDS implications)
o Vouchers marked as Optional
o Payroll Vouchers
Uncertain Vouchers
These are transactions that do not fulfill the criteria of the Included and Excluded categories. A
voucher will be listed as Uncertain when there is insufficient information entered in:
 Masters
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 Transactions
Deduction Details :
This section denotes the type of deduction under which each of the Included transaction is
grouped.
 Deduction details are classified into:
 Deduction at Normal Rate
 Deduction at Higher Rate
 Lower Rated Taxable Expense
 Zero Rated Taxable Expense
 Under Exemption Limit
 Exempt in lieu of PAN Available
The assessable value, tax deductible, and the tax deducted for transactions grouped in the above
categories are displayed here.
Payment Details :
This will contain the statistics of all TDS payments (deemed or actual) that exist in the data till
date. This will not contain any of the payment entries that are not related to the current period.
Any payment entries other that TDS payment entry will not appear here.
The section will display the payments against two fields:
 Included Transactions
 Excluded Transactions
Form 27 Q
Form 27Q is a Quarterly return for deduction of tax in respect of payments made to non-
residents other than salary.
To print Form 27Q,
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 Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > Form 27Q
Figure 2.5.4Form 27Q
eTDS Returns
In Tally.ERP 9, the e-Return button displays the eTDS Quarterly Forms, which can be exported
and validated with the File Validation Utility.
To view the E-TDS Forms,
Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > Form 26Q >
Press Ctrl + A to Accept
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Figure 2.5.6. Save the Return
Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > Form 26Q > E–
Return (Ctrl + E)
 In Exporting eTDS Forms, press Backspace and enter the following details:
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Figure 2.5.7. Exporting eTDS Forms
The exported file (Tally.txt) is required to be validated with the File Validation Utility (a freely
downloadable utility from NSDL website) and after validation, the returns should be submitted
to the department in CD along with Form 27A in Physical Form.
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Lesson 3: Goods and Service Tax (For Services)
3.1 Introduction
Service tax is the tax payable on services that are taxable. While in most cases, the service
provider is liable to pay this tax, in certain cases the recipient of the service is liable to pay tax.
This is known as the reverse charge mechanism.
Goods and Services Tax (GST) is an indirect tax which was introduced in India on 1 July 2017
and was applicable throughout India which replaced current tax such as Service Tax, VAT etc.
3.1.1. Salient Features of Goods and Service Tax compliant Tally.ERP 9

 Tally.ERP 9 tracks the details bill-wise and automatically calculates the GST payable and
Input Credit
 It generate proper service tax with SAC Code
 Eliminates error-prone information and incorrect remittances
 It generates reports in the government suggested formats.
3.2. Configuring Tally.ERP 9 for Goods Service Tax
ICON Enterprises is a Consultation firm. To record the service tax transaction for the financial
year 2017-18 create a company ICON Enterprises.
3.2.1 Company Setup
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Figure 3.2.1 Company Creation – ICON Enterprises
Note : Create a company with Number of Decimal places to 0 and Decimal places for printing
amount in words to 0
To enable Accounts only company

Go to F11: Features > Accounting Features > Maintain accounts only to Yes
3.2.2 Enabling Goods and Service Tax
To enable GST,
 Press F11: Features (F3: Statutory & Taxation Features) and set the following to Yes
o Enable Goods and Service Tax (GST)
o Set / Alter GST details
 On activating Set/Alter GST details, the Company GST Details screen appears as
shown:
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 In GST Details screen please fill the details as above
 In Tax information,
o Enter PAN/Income tax no as AAVPM7023N
Figure 3.2.2.2 Statutory & Taxation Screen
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 In F11: Features (Accounting Features), ensure that Maintain Bill-wise details is set
to Yes
3.3 Creating GST Ledger
Type of Duty/ Tax Type

Ledger Under
Tax
SGST Duties & Taxes GST State Tax
CGST Duties & Taxes GST Central Tax
IGST Duties & Taxes GST Integrated Tax
Create the ledger SGST

Go to Gateway of Tally > Accounts Info. > Ledgers > Create (Under Single Ledger)
 Name : SGST
 Under : Duties and Taxes
 Select GST in the Type of Duty/Tax field
 Tax Type : State Tax
 The Percentage of Calculation set as 0 %
The ledger SGST appears as shown:
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Figure 3.3.1 Ledger Creation — SGST

Note : Similarly create the CGST and IGST ledgers
3.4 Recording Transactions
3.4.1 Purchase of Service Tax :

Illustration 1:
On 01-07-2017, ICON Enterprises received Professional Services (towards Advertisement)
from Ronak Advertising worth Rs. 2,00,000. The services are subject to Goods Service Tax
(GST @ 18%).
Setup :
1. Create the party ledger - Ronak Advertising under Sundry Creditors
 Under : Sundry Creditors
 Maintain Balances bill-by-bill: Yes
 Address : Andheri, Mumbai, Maharashtra 400069.
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o Registration Type : Regular

o Is a e-commerce operator : No
o Party Type : Not Applicable
o GSTIN/UIN : 27ACFPP8015P1Z1
The ledger Ronak Advertising appears as shown
Figure 3.4.1.1 Ledger Creation — Ronak Advertising

 Accept the rest of the field as default values
2. Create the purchase ledger – Advertising Charges under Purchase Accounts

 Name : Advertising Charges
 Under: Purchase Accounts
 Is GST Applicable: Applicable
In F12 Configuration Set All HSN/SAC Details to Yes
o Nature of Transaction : Not Applicable
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o Cess : 0%

 Press Enter
 Type of Supply : Services
Figure 3.4.1.3 Ledger Creation — Advertising Charges
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3. Create Bank Account Ledger - HSBC Bank under Bank Account with opening balance
as Rs. 10,00,000 Dr.
Setup :
 Ensure that V: As Invoice and I: Acct Invoice modes are activated
 Ensure that in F12: Purchase Invoice Configuration, Use Defaults for Bill Allocations
is set to No

 Type Supplier Invoice No : RA/56/17-18 and Date as 01/07/2017
 Select the party Ronak Advertising from the List of Ledger Accounts in Party's A/c
Name and Press Enter
 In Particulars column, select the Advertising Charges ledger.
 Enter 2,00,000 in the Amount field
 Select the second ledger as SGST in Particulars column, SGST amount will get
calculated automatically. Press Enter
 Select the third ledger as CGST in Particulars column, amount will get calculated
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Figure 3.4.1.4. Purchase Invoice

Note : Both the parties are from Maharashtra that’s why SGST and CGST will be applicable
3.4.2 Purchase of Service Tax (IGST)

Illustration 2:
On 03-07-2017, ICON Enterprises received Professional Services (towards Advertisement)
from Star Advertising worth Rs. 1,00,000. GST will charges on the above Service.
Setup :
1. Create the party ledger - Star Advertising under Sundry Creditors
 Name : Star Advertising
 Address : Kinnigoli, Mangalore, Karnataka 574150.
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o GSTIN/UIN : 29ADAPN7053M1Z4

 Type Supplier Invoice No : SA/35/17-18 and Date as 03/07/2017
 Select the party Star Advertising from the List of Ledger Accounts in Party's A/c
Name and Press Enter
 In Particulars column, select the Advertising Charges ledger.
 Select the second ledger as IGST in Particulars column, SGST amount will get
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Figure 3.4.2.1 Purchase Invoice

Note : Both the parties are from different state that’s why only IGST will be applicable
Illustration 3:
On 05-07-2017, ICON Enterprises issue a cheque of Rs. 2,36,000 to Ronak Advertising
against bill no. RA/56/17-18.

Go to Gateway of Tally > Accounting Vouchers > F5: Payment
 Ensure that in F12: Payment Configuration, set Use Single Entry mode for
 Press F2 and specify the voucher date as 05/07/2017
 In the Account field, select the bank account ledger as HSBC Bank
 In the Particulars field, select Ronak Advertising as party ledger
 Enter 2,36,000 in the Enter Amount field and Press Enter
 In Bill-wise Details screen
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 Select the Pending Bills as RA/56/17-18 in Name field, Amount is defaulted
automatically
The Payment Voucher appears as shown:

3.4.3 Sale of Service Tax

Illustration 4:
On 05-07-2017, Advertising Services worth Rs. 4,00,000 was provided to A1 Advertising. The
services are subject to Goods and Service Tax (GST @ 18%).
Setup :
1. Create the party ledger - A1 Advertising under Sundry Debtors
 Name : A1 Advertising
 Under : Sundry Debtors
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 Address : Chembur, Mumbai, Maharashtra 400074.
o GSTIN/UIN : 27CTKPK8675E1Z5
2. Create the Sales ledger – Advertising Fees under Sales Accounts
 Name : Advertising Fees
 Under: Sales Accounts
o HSN/SAC : 440013
o Cess : 0%

 Press Enter
 Type of Supply : Services
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3. Ensure that V: As Invoice and I: Acct Invoice modes are activated

 Go to Gateway of Tally > Accounting Vouchers > F8: Sales
 Type Invoice No in Ref : ICE/001/17-18 and Date as 05/07/2017
 Select the party A1 Advertising from the List of Ledger Accounts in Party's A/c Name
 In Particulars column, select the Advertising Fees ledger.
 In the Bill-wise details for screen,
o Under the Type of Ref. field, select New Ref
o In Name field, type reference number as ICE/001/17-18 and accept the default
values. Press Enter to accept the screen
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Figure 3.4.3.2 Sales Invoice

Illustration 5:
On 07-07-2017, ICON Enterprises received a cheque of Rs. 4,72,000 from A1 Advertising
against bill no. ICE/001/17-18.
Create Receipt Voucher

Setup :
 In F12: Receipt Configuration, set Use Single Entry mode for Pymt/Rcpt/Contra to
Yes
Go to Gateway of Tally > Accounting Vouchers > F6: Receipt
 In the Particulars field, select A1 Advertising as party ledger
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 Select the Pending Bills as ICE/001/17-18 in Name field, Amount is defaulted
automatically
The Receipt Voucher is displayed as shown:
Figure 3.4.3.3 Receipt Voucher

3.4.4. Sale of Service Tax (IGST)

Illustration 6
On 10-07-2017, Advertising Services worth Rs. 3,00,000 was provided to Global World, Tamil
Nadu.
Setup :
 Create the party ledger – Global World under Sundry Debtors
 Name : Global World
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 Address : Tripur, Tamil Nadu 641652.

o GSTIN/UIN : 33AADPR8294C1ZM

Go to Gateway of Tally > Accounting Vouchers > F8: Sales
 Select the party Global World from the List of Ledger Accounts in Party's A/c Name
 In Particulars column, select the Advertising Fees ledger. Press Enter
 Enter 3,00,000 in the Amount field and Press Enter,
 Select the second ledger as IGST in Particulars column, IGST amount will get calculated
automatically. Press Enter
 In the Bill-wise details for screen,
o Under the Type of Ref. field, select New Ref
o In Name field, type reference number as ICE/002/17-18 and accept the default
values. Press Enter to accept the screen
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Illustration 7:
On 12-07-2017, ICON Enterprises issue a cheque of Rs. 1,18,000 to Star Advertising against
bill no. SA/35/17-18.

 In the Particulars field, select Star Advertising as party ledger
 Select the Pending Bills as SA/35/17-18 in Name field, Amount is defaulted
automatically
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Illustration 8:
On 14-07-2017, ICON Enterprises received a cheque of Rs. 3,54,000 from Global World
against bill no. ICE/002/17-18.

 In the Particulars field, select Global World as party ledger
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 Select the Pending Bills as ICE/002/17-18 in Name field, Amount is defaulted

automatically
The Receipt Voucher is displayed as shown:

Illustration 9:
On 15-07-2017, Advertising Services worth Rs. 50,000 was provided to Raj Advertising and
immediately they issue the cheque. The services are subject to Service

Go to Gateway of Tally > Accounting Vouchers > F8: Sales
 Select the ledger HSBC Bank from the List of Ledger Accounts in Party's A/c Name
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 In Particulars column, select the Advertising Fees ledger.

 Enter 50,000 in the Amount field

3.4.5 Inward Supply of Services Under Reverse Charge

Illustration 10:
On 17-07-2017, ICON Enterprises received transport Services from Rohit Transport Agency
for Rs. 60,000. (reverse charge will be applicable).
Setup :.
 Create the party ledger - Rohit Transport Agency under Sundry Creditors
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 Address : Andheri, Mumbai, Maharashtra 400069.
o Registration Type : Unregistered
 Create the purchase ledger – Transport Charges under Purchase Accounts
 Name : Transport Charges
 Under: Purchase Accounts
o HSN/SAC : 996511
o Is reverse charge applicable : Yes
o Cess : 0%
o Type of Supply : Services

 Type Supplier Invoice No : RTA/121/17-18 and Date as 17/07/2017
 Select the party Rohit Transport Agency from the List of Ledger Accounts in Party's
A/c Name and Press Enter
 In Particulars column, select the Transport Charges ledger.
 Enter 60,000 in the Amount field
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Figure 3.4.5.1. Purchase Invoice

Illustration 11:
On 18-07-2017, ICON Enterprises raise the tax liability of purchase of transport service on
17/07/2017
Setup :.
Create the Tax on Reverse Charges Under Direct Expenses GST – Not Applicable
To record a journal voucher to raise the liability

3. Select the options as shown below:
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Figure 3.4.5.2. Stat Adjustment
4. Debit the Reverse Charge ledger,

5. In credit Select SGST ledgers with Rate 9%, Taxable Value as 60000 and type the
amount as 5400.
6. In credit Select one more CGST ledgers with Rate 9%, Taxable Value as 60000 and
type the amount as 5400.
Figure 3.4.5.3. Journal Voucher

Illustration 12:
On 19-07-2017, ICON Enterprises issue a cheque of Rs. 60,000 to Rohit Transport Agency
Express against bill no. RTA/121/17-18.
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 In the Particulars field, select Rohit Transport Agency as party ledger
 Enter 60,000 in the Enter Amount field and Press Enter
 Select the Pending Bills as RTA/121/17-18 in Name field, Amount is defaulted
automatically

3.4.6 Accounting for Advance Receipts
The advance amount received from customers can be recorded in a receipt voucher. The receipt
voucher that is marked as an advance receipt can be printed with the required GST details.
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For any advance received for goods or services, if the corresponding sales invoice is not raised
in the same month, the dealer who has received the advance has to pay the GST.
Illustration 13:
On 22-07-2017, ICON Enterprises received an advance of Rs. 90,000 from Raj Solutions
towards Advertisement Services.
Setup :
 Create Raj Solutions under Sundry Debtors group
 Address : Mankhurd, Mumbai, Maharashtra 400088.
o GSTIN/UIN : 27AADPP2654A1Z1
 F11 : F3 Statutory and Taxation : Set /alter GST details : Enable tax liability on
advance receipt to Yes

 Click V: Advance Receipt to mark the voucher for advance receipt.
 Select the Raj Solutions as party ledger.
 The Advance Receipt Details screen appear.
 Press Alt + L to Show the ledger
 Select Advertising Fees as a ledger,
 Enter the Advance Amount as 90,000/-, which is inclusive of GST.
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 Based on the amount entered, the break-up of the GST amount gets auto calculated
for Central Tax, State Tax, and Cess, if applicable. The Advance Receipt
Details screen appears as shown below:
Figure 3.4.6.1 Advance Receipt Details

 Press Ctrl+A to accept the Advance Receipt Details screen and return to the receipt
voucher.
 Select the type of reference as Advance and enter the reference details as RAJ/Adv-01 in
the Bill-wise Details screen.
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 Accept the receipt voucher.
 To Print the Advance Receipt, Press Pg Up Key
 Click P: Print.
 Press BackSpace to Edit
 Set Print GST Advance Receipt? to Yes, as shown below:
Figure 3.4.6.3 Voucher Printing

 The printed receipt voucher with the GST details appears as shown below:
The Receipt Voucher appears as shown:
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Figure 3.4.6.4. Receipt Voucher

Illustration 14:
On 24-07-2017, ICON Enterprises raise the tax liability of advance receipt from Raj Solutions
Setup :.
Create the Tax on Tax on Advances Under Indirect Expenses, GST : Not Applicable
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To record a journal voucher to raise the liability

3. Select the options as shown below:
Figure 3.4.6.5. Stat Adjustment

4. Debit the Tax on Advances ledger and type the amount as 13728,
5. In credit Select SGST ledgers with Rate 9%, Taxable Value as 76272 and type the
amount as 6864.
6. In credit Select one more CGST ledgers with Rate 9%, Taxable Value as 76272 and
type the amount as 6864.
7. Provide GST Details : Select Ledger Name as Raj Solutions
Figure 3.4.6.6. Journal Voucher

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3.4.8 Accounting for Opening Service Tax Credit

In Tally.ERP 9, Service Tax payable and excess Input Credit on Service Tax of previous periods
can be transferred from the previous financial year to the current financial year.
Illustration 15:
As on 01-07-2017, the books of ICON Enterprises revealed the following opening balance
details pertaining to Service Tax :
Particulars Amount
Input Service Tax Credit 5,600 Dr
Service Tax payable 3,500 Cr
Setup :
Create the following ledgers:
 Input Service Tax Credit under Duties & Taxes with an opening balance of Rs. 5,600
as Dr. balance (Select the Type of Duty/Tax as Others)
Figure 3.4.8.1 Ledger Creation Input Service Tax Credit

 Service Tax Payable under Duties & Taxes with an opening balance of Rs. 3,500 as Cr.
balance (Select the Type of Duty/Tax as Others)
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Figure 3.4.8.2 Ledger Creation Service Tax Payable
i. Create Journal Voucher

 Click J: Stat Adjustment
Figure 3.4.8.3 Stat Adjustment

 Select SGST ledger in the Debit field and type the amount as 2,800/-
 Select CGST ledger in the Debit field and type the amount as 2,800/-
 Select Input Service Tax Credit in the Credit field, amount will come automatically.
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The Journal Voucher appears as shown:


Pass a Journal Voucher for transferring the previous years Service Tax liability towards
Advertising Agency service category to the Service Tax Payable ledger
 Click J: Stat Adjustment
 Select GST in the field Type of duty/tax.
 Select Opening Balance in the field Nature of Adjustment.
The Stat Adjustment screen appears as shown below:
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Figure 3.4.8.5 Stat Adjustment

 Select Service Tax Payable ledger in the Debit field and enter the amount as 3,500/-
 Select SGST ledger in the Credit field and type the amount as 1,750/-
 Select CGST ledger in the Credit field and type the amount as 1,750/-
 Press Enter to accept the screen.
The Journal Voucher appears as shown:

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3.4.9 Adjustment of Input Service Tax Credit

In Tally.ERP 9, to set off Service Tax Input Credit an adjustment entry is required to be passed
wherein Service Tax ledgers will be debited and credited accordingly. Upon adjusting the Input
Service Credit against Service Tax Liability, the net balance in the service tax ledgers will be
payable to the Government.
The tax credits of central tax, integrated tax and state tax can be used to set-off the liability of
central tax, state tax/UT tax and integrated tax in the order specified under GST.
iv. Create Journal Voucher

To record a journal voucher for cross utilisation of tax credits

3. In the Stat Adjustment Details screen, select the options as shown below:
4. Press Enter to save and return to the journal voucher.

5. In the journal voucher, debit and credit the ledgers as per the mentioned below:
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3.4.10 Payment of Goods and Service Tax

In Tally.ERP 9, payment of Goods and Service Tax is made through Payment voucher.
Illustration 16:
On 05-08-2017, ICON Enterprises paid Goods and Service Tax of Rs.1,03428/- .
Setup :
 Press F12: Payment Configuration and set Use Single Entry Mode for
1. Go to Gateway of Tally > Accounting Vouchers > F5: Payment.

2. Click S: Stat Payment and enter the required details.
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Figure 3.4.10.1 Statutory Payment
Payment Type: Set the type of payment as Regular.
3. In Account Select Bank ledger as HSBC Bank.

4. In Particulars Select SGST and type amount Rs. 33714
4. Select one more ledger CGST and type amount Rs. 33714
5. Select one more ledger IGST and type amount Rs. 36,000
6. Select Credit Ledger as HSBC Bank, amount will come automatically.
7. Provide GST details: Enable this option to enter the bank details.
Figure 3.4.10.2 Bank Details
Note: If the bank details are not available, you can enter them later in the Challan
Reconciliation report.
7. Press Enter
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3.5 GST Reports in Tally.ERP 9
In Tally.ERP 9, the following GST reports are available for registered dealers:
 GSTR-1
 GSTR-2
 Update Party GSTIN
3.5.1 GSTR1
will include the details of all outward supplies made in the given period. In the standard format
used for a different type of outward supply. In Tally.ERP 9, GSTR-1 can be viewed in a report
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To view the report
● Go to Gateway of Tally > Display > Statutory Reports > GST > GSTR–1.
Figure 3.5.1 GSTR-1
outward supplies considered in the returns.
F12: Configure
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3.5.2 GSTR-2
will include the details of all inward supplies made in the given period. In the standard format
used for a different type of inward supply. In Tally.ERP 9, GSTR-2 can be viewed in a report
To view the report
1. Go to Gateway of Tally > Display > Statutory Reports > GST > GSTR–2.
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Figure 3.5.2 Payment Voucher
inward supplies considered in the returns.
F12: Configure
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3.5.3 GSTR-3B
Form GSTR-3B is an interim return form the GST dealers with regular registration should use,
to file monthly returns. From Tally.ERP 9, you can generate GSTR-3B, export the data in the
JSON format, and upload it to the portal to file the returns.
In Tally.ERP 9, you can view GSTR-3B in the report format with tax computation details. This
report can be changed to the return format view (specified/prescribed by the department) with
the click of a button.
To view the GSTR-3B report
● Go to Gateway of Tally > Display > Statutory Reports > GST > GSTR-3B.
Figure 3.5.3 GSTR - 3B
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Tally ERP Taxation Certificate Program (TTCP)

Last Updated: January 2018

Lesson 1 Goods and Service Tax (For Goods) …....………………………………... 6

1.2 What is GST……………………………………………………….................................... 4

1.3 Why GST…….....………………………………………………….................................... 6

1.4 Structure of GST ………………………………………………….................................... 7

1.5 Registration of GST……………………………………………................................... 9

1.6 Types of Returns …………………………………………………................................... 12

1.7 Configuring GST in Tally.ERP 9……………………………………………………… 15

1.8 Creating Masters in Tally.ERP 9……………………….......................……………… 19

1.9 Entering Regular Transactions in Tally.ERP …………….………………………….. 29

1.10 Accounting for returns of the goods ……….………………………….............................. 49

1.11 Rate Difference in Purchase and Sales …………………………………........................... 51

1.12 Nil Rated Transactions under GST …………………………................................………… 54

1.13 Purchases from unregistered Dealers …………………………………........................ 58

1.14 Inter-State Sales and Purchase ……………………………….........................................… 62

1.16 Export Sales …………………………….....................................................................…… 68

1.17 Adjustment toward Tax Credit under GST …………………………………........................ 70

1.18 Payment of GST ………………………………...............................................................… 72

1.19 GST Reports ……………………………………………………………………..................... 74

Lesson 2 Tax Deducted at Source (TDS) ………………………………………… 85

2.2 Configuring TDS in Tally.ERP 9……………………………………………..........…… 86

2.3 TDS Statutory Masters………………………………………………...........................… 89

2.4 Recording Transactions in Tally.ERP 9………………………………………………… 91

2.4.1 Booking Expenses and Deducting TDS ………………………………………………… 91

2.4.2 Booking Expenses and Deducting TDS Later …………………..................................… 101

2.4.3 TDS Deduction at Lower Rate ………………………………….......................................… 108

2.4.4 TDS Deduction at Zero Rate ………………………………..........................................…… 112

2.4.5 Deducting TDS on Advance Payment ……………………………………...................... 116

2.4.6 Payment of TDS …………………………………….................................................... 119

2.5 TDS Reports………………………………………………………………………….... 125

Lesson 3 Goods and Service Tax (For Services)...........................………………... 134

3.1 Introduction…………………………………………………………………………... 134

3.2 Configuring Service Tax in Tally.ERP ……………………………………………….. 134

3.3 Creating GST Ledgers……………………………………………………………........ 137

3.4 Recording of Transaction……………………………………........................................ 138

3.4.1 Purchase of Service Tax (Local)……………………………................................ 138

3.4.2 Purchase of Service Tax (Out of state)……………………………........................ 142

3.4.3 Sale of Service Tax (Local)…………………………............................................ 145

3.4.4 Sale of Service Tax (Out of state) ……………………………………................. 149

3.4.5 Inward Supply under Reverse Charge ……………………………………............ 154

3.4.7 Accounting for advance receipt ……………………………………...................... 158

3.4.8 Accounting for Opening Service Tax …………………………………….............. 164

3.4.9 Adjustment of Input Service tax credit ……………………………………............ 168

3.4.10 Payment of Goods and Service Tax……….......................................................... 169

3.5 Goods and Service Tax Reports …………………………………………………….... 171

Lesson 1: Goods and Service Tax

1.2. What is GST

1.2.1 HIGHTLIGHTS of GST

1.3. Why GST

1.4. STRUCTURE OF GST

1.4.1 WHY IS DUAL GST REQUIRED?

1.4.2 CURRENT INDIRECT TAX STRUCTURE

3.2.3 TAXES SUBSUMED UNDER GST

1.5.1 THRESHOLD LIMIT

1.5.2 MANDATORY REGISTRATION