TallyERP9 Tutorial Part-4: Ledgers for GST Transactions

For GST Transaction in Tally.ERP9, first we have to Activate GST in Tally.ERP9 as a Regular Scheme. Next, the following Ledgers are essential and required to Create for GST transactions..

  • Bank Account
  • Party Ledger (Debtor / Creditor)
  • GST Ledger
  • Sales Ledger
  • Purchase Ledger
  • Service Ledger
  • Rounded Off (+/-) Ledger
Tally.ERP9 Book (Advanced Usage) @ Rs.550
Tally.ERP9 Book (Advanced Usage) @ Rs.550

1- Activate GST for Your Company in Tally.ERP9

To use Tally.ERP 9 for GST compliance, you need to activate the GST feature. Once activated, GST-related features are available in ledgers, stock items, and transactions, and GST returns can be generated.

GST Registrations are of two types…

1. GST Regular Scheme ( for Regular Dealer)

The GST regular scheme is for the general taxpayers whose turnover is above the threshold limit.

Under the GST regular scheme, all individuals with turnover above 40 lacs are required to take GST Registration. They are required to pay GST on goods & services as per the applicable rates and do regular GST return filing

2. GST Composition Scheme ( for Composite Dealer)

The composition scheme is meant for small businesses whose turnover of taxable goods not more than₹1.5 crores, where GST has to be borne by the seller @1% of such turnover by traders, @2% bymanufacturers, 5% for Restaurants & 6% for Service Providers.

A Composition Dealer has to issue Bill of Supply. They cannot issue a Tax Invoice. This is because the tax has to be paid by the dealer out of pocket. A Composition Dealer is not allowed to recover the GST from the customers.

(A) Activate GST for Regular Dealers

1.            Open the company for which you need to activate GST.

2.            Press F11 F3 .

3.            Enable Goods and Services Tax (GST) – Yes .

4.            Set/alter GST details – Yes . The GST Details screen appears.

5.          State – shows the State name as selected in the Company Creation screen. This helps in identifying local and interstate transactions according to the party’s state.

6.            Set the Registration type as Regular .

7.         You can keep the rest default fields as same and don’t change ( but you can change as per your requirements)

(B) Activate GST for Composition Dealers

1.            Open the company for which you need to activate GST.

2.            Press F11 F3 .

3.            Enable Goods and Services Tax (GST) – Yes .

4.            Set/alter GST details – Yes .

5.            The State field helps in identifying local and interstate transactions according to the party’s state. If you change the state here, the company details will get updated.

6.            Set the Registration type as Composition .

7.            Based on your business type, select the Basis for tax calculation .

[ For outward supplies, the total of taxable, exempt and nil rated will be considered as the Taxable Value .

For inward supplies, the total value of purchases made under reverse charge will be considered as the Taxable Value . ]

You can record transactions using the ledgers with GST details, and print invoices with GSTIN.

2. Creating Bank Account Ledgers in Tally.ERP9

Bank ledgers contain relevant information about a bank that you use to make or receive payments. You can provide information such as Bank name, Account no., IFS code, and address while creating bank ledgers.

To create a bank ledger

1.  Go to Gateway of Tally > Accounts Info. > Ledgers > Create.

2.  Enter the Name of the bank for the bank ledger.

3.  Select Bank Account from the List of Groups, in the Under field.

Note: The Books Beginning date is pre-filled in Effective Date for Reconciliation field.

4.  Provide the following details in Bank Accounts details:

  • A/C holder’s name – It prefills the company name; however, you can alter this name by pressing Backspace.
  • A/c no. – Provide the account number of your bank.
  • IFS code – Provide the IFS code for your bank.

Note: If the IFS code in incorrect, the system prompts the warning message “Invalid IFS Code. The IFS Code must contain 4 alphabets, followed by 0 and 6 numbers/alphabets. For example, UTIB0000221.”

  •  Bank name – Select the bank name from the List of Banks.

The Ledger Creation screen appears as shown below:

Creating Bank Account in TallyERP9
Creating Bank Account in TallyERP9

Note: The List of Banks is displayed only when TSS and internet connectivity is available. Additionally, the Bank Configuration displays options that are applicable for the bank you select.

5.  Under Bank Configuration: o     Enable Set cheque books.  Enter the details of the cheque range in the Cheque Book Management screen as shown below:

Creating Bank Account in TallyERP9
Creating Bank Account in TallyERP9
  • Enter the correct cheque numbers and press Enter to navigate to the Ledger Creation screen.
  • Enable  Set cheque printing configuration? to Yes. [ If your want to Print Cheque]

[Practical Assignment]

Create the following Bank Ledger with Opening Balances given:

 Bank Account :Opening Balance
HDFC Bank                
Axis Bank                
ICICI Bank                
State Bank of India  
10,000
65,000
80,000
30,000

3. Creating Party Ledgers (Sundry Debtor / Sundry Creditor) in Tally.ERP9

A business deals with customers, wholesalers, retailers, Suppliers and many such business parties on a day-to-day basis. You need to create party ledgers to record transactions that you make, which may involve Sales , Purchase, Receipts or Payments, or Sales or Purchase from these parties.

To create a Party Ledger:

1.   Go to Gateway of Tally > Accounts Info. > Ledgers > Create.

2.   Enter the Name of the Party ledger

3.   Select Sundry Creditors / Sundry Creditors from the List of Groups in the Under field.

4.   Set the option Inventory values are affected? to No,.

5.  In Mailing details, the State is your default local State. You can change name of State from the State List  if your Suppliers belongs to Outside State.

Creating Party Ledgers
Creating Party Ledgers

6.   Enable the option Set/Alter GST Details? to open the GST Details screen.

  • Select the relevant Registration Type from the List of registration Types.
  • Enter the 15-digit GSTIN or UIN issued by the tax authority.
  • If the supplier is an e-commerce operator, then enable the option Behave as e-Commerce Operator?

The GST Details screen appears as shown below:

Creating Party Ledgers
Creating Party Ledgers
  • Press Ctrl+A to accept.

The Ledger Creation screen displays as shown below:

Creating Party Ledgers
Creating Party Ledgers

Important Points:

  • GST involves within State (Local) and Outside State (Outside).
  • GST within State transactions are classified into CGST & SGST & Outside State transaction is IGST.
  • Tally.ERP9 will select CGST , SGST (with state transaction) or IGST (outside State transaction) on the basis of Party Ledger Address i.e. State & Party Registration type i.e. Composition or Consumer or Regular or Unregistered. If Party is Registered either under Composition or Regular, then GSTIN / UIN No. has to be mentioned. Tally.ERP9 will validate the GSTIN / UIN No. on the basis of State selection under Mailing details.
  • So the most important part at the time creation of Party Ledger is its selection of State in Mailing Address and type of Registration under Tax Registration Details as per screen below:
  • Tally.ERP9 will calculate GST automatically on the basis of GST Rate given in Items & Goods in case of Accounts with Inventory and in case of Accounts only GST Rate given in Sales or Purchase Ledger:

Maintain Balances Bill-by-Bill & Default Credit Period (if you require) :

This functionality is available only, if you have Set Maintain Bill-wise details to Yes in F11: Features > F1: Accounting Features.

Creating Party Ledgers
Creating Party Ledgers
Creating Party Ledgers

This option is applicable when you want the balances to be maintained Bill by Bill or Bill wise. Normally, this option is useful for Ledgers falling under Sundry Debtors & Sundry Creditors. If you set this option to Yes, while entering the opening balance in the Opening Balance field at the end of Ledger Creation screen and press Enter, the Bill-wise Breakup screen of the Ledger created is displayed as shown.

Creating Party Ledgers
Creating Party Ledgers

If the total amount of all your bills covers the Opening Balance, the On Account becomes NIL. You could have Bills totalling beyond the Opening Balance. In the screen shown above, there are two bills 50,000, 25,000. Now, if the balance brought forward is 1,00,000/- , the On Account amount will reflect 25,000/-. If you obtain the bill particulars at a later date, you can alter the ledger to enter these details, which will nullify On Account.

Define the Default Credit Period :

The credit period may be given for Sundry Debtors and Sundry Creditors. The number of credit days or period can be defined in various ways:

 SuffixExample
DaysNone5 is considered as 5 days.
WeeksW5 W is considered as 5 weeks.
MonthsM5 M is considered as 5 months.
YearY5 Y is considered as 5 years.

Set the option Check For Credit Days During Voucher Entry to Yes to get a warning message when the party ledger selected in a transaction has exceeded the credit period, and outstanding bills have not been cleared. The warning message appears as shown below:

Creating Party Ledgers
Creating Party Ledgers

This will ensure that there is better control over credit period and outstanding amounts to be received and paid.

[Practical Assignment]

Create the following Sundry Debtor and Sundry Creditor Party Ledgers with all information given:

Sundry Debtor

Name of PartyAddress with StateRegistration TypeGSTIN / UIN No.Opening Balance
Corporate Customer:    
Adarsh Tiles Pvt. Ltd.OdishaRegular21AAACC1206D2ZR   10,000
Kanan CoOdishaRegular21AAACC1206D2ZR      5,000
Lexsite Pvt. Ltd.OdishaRegular21AAACC1206D2ZR1,50,000
Rony Antony & CoOdishaRegular21AAACC1206D2ZR1,00,000
Sodexo Gift VoucherOdishaRegular21AAACC1206D2ZR1,20,000
     
Wholesale Customer:    
Adersh and ComputersOdishaRegular21AAACC1206D2ZR11,500.00
Eric LazarusOdishaRegular21AAACC1206D2ZR  2,000.00
Mr. SacharOdishaRegular21AAACC1206D2ZR10,000.00
Shweta & Co (Debtors)OdishaRegular21AAACC1206D2ZR  7,500.00
Stabilo ComputersOdishaRegular21AAACC1206D2ZR  9,000.00
Sudershan and CoOdishaRegular21AAACC1206D2ZR          8,000.00
Tams & CoOdishaRegular21AAACC1206D2ZR          5,000.00
     
Local  Customers:    
Chitra & Co.OdishaConsumer    10,000
DFG Co.OdishaConsumer      5,000
FGH PLOdishaUnregistered 1,50,000
Kanchan.ComOdishaComposition21AAACC1206D2ZR1,00,000
Laxmi & ComOdishaComposition21AAACC1206D2ZR1,20,000
Shailesh and SonsOdishaConsumer    10,000
     
Outside Customers (IGST):    
Akhil & CoKARNATAKARegular29AAACC1206C2ZB   6,000
Darshan and SonsPUNJABRegular03AAACC1206D1ZQ   8,000
Eric EnterpriseTAMIL NADURegular33AAACC1206D1ZN10,000
HJK IndustriesMAHARASHTRARegular27AAACC1206D1ZG10,000
Shrinivas & Co.WEST BENGALRegular19AAACC1206D2ZC  7,000
Shrinivas Pvt.Ltd.CHHATISGARHRegular22AAACC1206D1ZQ  5,000
     

Sundry Creditor

Name of PartyAddress with StateRegistration TypeGSTIN / UIN No.Opening Balance
Local Creditor:    
ACER India LtdOdishaRegular21AAACC1206D2ZR35,000
Ezone ComputersOdishaRegular21AAACC1206D2ZR35,000
HCL LimitedOdishaRegular21AAACC1206D2ZR75,000
i Ball IndustriesOdishaRegular21AAACC1206D2ZR40,000
Intel SolutionsOdishaRegular21AAACC1206D2ZR50,000
Radian Techno LtdOdishaRegular21AAACC1206D2ZR70,000
Samsung Pvt LtdOdishaRegular21AAACC1206D2ZR60,000
     
Other Creditors:    
Supreme FurnitureOdishaUnregistered  8,000
Excel IT CareOdishaComposition21AAACC1206D2ZR 4,500
Honda Motors Ltd.OdishaConsumer  3,500
Shree EnterprisesOdishaRegular21AAACC1206D2ZR0
N. Jatania & Co,OdishaRegular21AAACC1206D2ZR0
PD AdvertisingOdishaRegular21AAACC1206D2ZR0
     
Outside Creditor (IGST):    
Sarala & CoDELHI(UT)Regular07AAACC1206D1ZI   40,000
Shwetha & SonsRAJASTHANRegular08AAACC12061ZG   20,000
Sony India LimitedMAHARASHTRARegular27AAACC1206D1ZG   90,000
Tally DCPUTTARAKHANDRegular05AAACC1206D1ZM1,00,000
Tally MTPASSAMRegular18AAACC1206D1ZF   46,000
Thakral Infotech LtdTAMIL NADURegular33AAACC1206D1ZN   82,000
     

4. Creating GST Ledger (CGST / SGST / IGST) under Duty and Taxes Group in Tally.ERP9

Tax Ledgers should be created under Duties and Taxes group which contains all tax accounts like GST, and other trade taxes and total liability.

To account for the different taxes to be paid under GST (central tax, state tax, union territory tax, integrated tax, and cess), you have to create a tax ledger for each tax type.

The following GST Ledgers will be created :

i.  SGST     [ State Tax for both Purchase and Sale within State ]

ii. CGST    [ Central Tax for both Purchase and Sale within State ]

iii. IGST    [ Integrated Tax for both Purchase and Sale Outside State]

I. To create ‘SGST’ ledger

1.  Go to Gateway of Tally > Accounts Info. > Ledgers > Create.

Creating SGST Ledgers
Creating SGST Ledgers

2.   In Under, select Duties & Taxes.

3.   Select GST as the Type of duty/tax.

Creating SGST Ledgers
Creating SGST Ledgers

4.   Select State Tax as the Tax type.

Creating SGST Ledgers
Creating SGST Ledgers

Note : Percentage of Calculation should be 0% ( Don’t Change ) due to multiple Tax Rate

Similarly, you can create ledgers CGST & IGST by selecting the relevant Tax type under GST.

II. To Create CGST Ledger :

Creating CGST Ledgers
Creating CGST Ledgers

III. To Create IGST Ledger :

Creating IGST Ledgers
Creating IGST Ledgers

[Practical Assignment]

Create the following GST Ledgers :

Duties & Taxes:                
CGST                
SGST                
IGST  

5. Creating Sales and Purchase Ledgers for GST Compliance in TallyERP9

If many items you sell have the same tax rate, specify the tax rate and other GST details in your sales ledger. Similarly, if the items you purchase have the same tax rates, update your purchase ledger.

If you sell items with multiple tax rates, you can still maintain a single Sales Ledger for both within and outside State Sales, and record all GST details at the stock item or stock group level. You can create a single Purchase Ledger both for within as well as outside State Purchase, similarly.

I. Creating a Sales Ledger: Sales-GST/IGST (both for Local & Outside State)

To Create a Sales Ledger i.e. GST-Sales

1.  Go to Gateway of Tally > Accounts Info. > Ledgers > Create.

Creating Sales and Purchase Ledgers in TallyERP9
Creating Sales and Purchase Ledgers in TallyERP9

2.   Enter the Name of the Sales ledger i.e. GST-Sales

3.   Select  Sales Account  from the List of Groups in the Under field.

4.   Set the option Inventory values are affected? to Yes ,.

5.   Is GST Applicable – Applicable.

Creating Sales and Purchase Ledgers in TallyERP9
Creating Sales and Purchase Ledgers in TallyERP9

6.   Set/alter GST Details – No,

Don’t specify the details in the GST Details because GST Rate specified in all Items will automatically Calculate the CGST and SGST as well as IGST,.

7.   Select the Type of supply. By default the type of supply is set to Goods.

Creating Sales and Purchase Ledgers in TallyERP9
Creating Sales and Purchase Ledgers in TallyERP9

8.   Press Ctrl + A to save.

[ Note : Only one Ledger i.e. GST-Sale will be created for all type of GST Sales ]

II. Creating a Purchase Ledger: Purchase-GST/IGST (both for Local & Outside State)

To Create a Purchase Ledger i.e. GST – Purchase (Local)

  • Follow the steps used for Creating the Sales Ledger i.e. GST-Sales as above.
Creating Sales and Purchase Ledgers in TallyERP9
Creating Sales and Purchase Ledgers in TallyERP9

1.   Go to Gateway of Tally > Accounts Info. > Ledgers > Create.

2.   Enter the Name of the Sales ledger i.e. GST-Purchase (Local)

3.   Select Purchase Account  from the List of Groups in the Under field.

4.   Set the option Inventory values are affected? to Yes ,.

5.   Is GST Applicable – Applicable.

Creating Sales and Purchase Ledgers in TallyERP9
Creating Sales and Purchase Ledgers in TallyERP9

6.   Set/alter GST Details – No,

Don’t specify the details in the GST Details because GST Rate specified in all Items will automatically Calculate the CGST and SGST as well as IGST.

7.   Select the Type of supply. By default the type of supply is set to Goods.

Creating Sales and Purchase Ledgers in TallyERP9
Creating Sales and Purchase Ledgers in TallyERP9

8.   Press Ctrl + A to save.

[ Note : Only one Ledger i.e. GST-Purchase (Local) will be created for all type of GST Purchase within State ]

[Practical Assignment]

Create the following Purchase & Sales Ledgers:

Sales Account:                
Sale – GST/IGST
Purchase Account:                       
Purchase – GST/IGST

6. Creating Service Ledger with GST Compliance in Tally.ERP9

In case of Service oriented Business like…Chartered Accountant, Lawyer, Advertising Agency, Consultant, Architectures etc.. they provide Service to the customer and provide Bill / Invoice with GST Compliance. So in this case, Tally.ERP9 provides Accounting Invoice with auto GST Calculations, provided all Service Ledgers has to be created with GST Rate ( as applicable).

For Example:

Create a Ledger – Audit Free with GST 28%

Setup: Create a Ledger, ‘Audit Fee’ under Direct Income with GST Applicable and Set/Alter  GST Details – YES , with Type of Supply – Service as per screen below:

Creating Service Ledgers in TallyERP9
Creating Service Ledgers in TallyERP9

1.  Set/alter GST Details – Yes , specify the details in the GST Details screen below, and save.

Creating Service Ledgers in TallyERP9
Creating Service Ledgers in TallyERP9

Nature of transaction : Select Sales Taxable from the Natures of Transactions List as above.

[Select Sales Exempt , if the type of supply is exempted from tax under GST, or select Sales Nil Rated , if the tax rate applicable to the type of supply is 0% under GST.]

To specify further GST-related details , click F12: Configure .

Creating Service Ledgers in TallyERP9
Creating Service Ledgers in TallyERP9

2.  Type of supply – Services .

3.  Press Ctrl + A to save.

[Practical Assignment]

Create the following Service Ledger under Direct Income with GST Compliance :

Direct IncomeGST Rate
Service Charges (12%)12%
Installation Charges (5%)5%
AMC Charges (15%)18%

7. Creation of Rounded off (+/-) Ledger for rounding the Invoice Value in Tally.ERP9

 You can create a Ledger ‘Rounded off (+/-)’ to round-off the invoice value automatically. 

1.  Go to Gateway of Tally Accounts Info. Ledgers Create / Alter .

Note : If you already created the given Ledger Rounded Off (+/-), you can alter as below
Creating Rounded off Ledgers in TallyERP9
Creating Rounded off Ledgers in TallyERP9

2.  Set Type of Ledger? as Invoice Rounding .

3.  Select the Rounding method as Normal Rounding and enter the Rounding limit to 1 .

4.  Under Statutory Information, all options should be set to Not Applicable .

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