Tally and GST

GOODS AND SERVICE TAX

GST is a tax on goods and services. It is a path-breaking indirect tax reform which will create a common national market by dismantling inter-State trade barriers. GST has replaced many indirect taxes like excise duty, service tax, VAT, CST, luxury tax, entertainment tax, entry tax, etc. In India, the government rolled out the GST on 1st July 2017. It is comprehensive, multistage, destination-based tax.

TYPES OF GST

There are three types of GST:-

  • CENTRAL GOODS AND SERVICE TAX (CGST)
  • STATE GOODS AND SERVICE TAX (SGST)
  • INTEGRATED GOODS AND SERVICE TAX (IGST)

NOTE: Similarly, there is another type of GST i.e., UTGST for Union territories.This tax is a levy on the supply of goods and services in union territories like Daman and Diu, Chandigarh, Dadra and Nagar Haveli, Andaman and Nicobar Islands, Lakshadweep Island except for Delhi and Pondicherry.

Therefore Delhi and Pondicherry have their own legislative assembly so that’s why CGST and SGST are charged on them. And on remaining, UTGST and CGST are charged. UTGST is collected by the union government and CGST is collected by the central government.

SLAB RATES OF GST

TAX RATES PRODUCTS
0%50% of the consumer price basket, including food grains.
5%Items of mass consumption such as edible oil, sugar, spices, tea, and coffee are included.
12%It includes processed food items like butter, cheese, frozen meat products, sausage, fruit juices, Ayurveda medicines, umbrella, coloring books, cell phones, sewing machines, etc
18%Most items are under this tax slab which includes flavored refined sugar, pasta, cornflakes, pastries and cakes, jams, soups, ice creams, note books, steel products, printed circuits, camera, speakers and monitors.
28%Luxury items such as cars, AC and refrigerators, premium cars, cigarettes and aerated drinks, High-end motorcycles are included under this slab rate.

Thus, this is all about the basic theoretical knowledge of GST, now let’s get started with some practical procedure of its implementation in Tally.ERP9 step by step by using an example which definitely clears your concepts. Keep reading to know the complete procedures in detail.

What is Tally?

Tally is an accounting software which used for for recording details daily life Accounting transactions, creating balance sheet, maintaining Inventory and all. It is the most popular accounting software and highly demanded in india. Tally is widely used in every organisation doesn’t matters that it is small or large.

Implementation of GST in Tally ERP9

  • 1: To begin with, the implementation of GST, firstly you will have to create a company in tally.
    • To create in tally you will have to follow the steps given below-
      Go to the gateway of tally>Press Alt+F3 for Comp info.>Create Company  
Create company in Tally.ERP9
  • 2: Now enter the details of the company like its name, country, and state, currency symbol, etc. In the Books and financial year details enter the first day of the current financial year for e.g.:  1-4-2019, or you may change as per requirement.

Then press Y or enter to accept and save details of the company.

Note:-The date must be after the date of 1-July 2017, as GST was introduced in India after this date.

Company in GST
  • 3: After creating the company, you will have to enable features of GST. So to enable features of GST– Go to the gateway of tally >Press F11 for Company features >Press F3 for Statutory and Taxation.
    • Then in Statutory and Taxation option, you will find the following option-
      • Enable Goods And Services Tax (GST)-YES
      • Set/ alter GST details-YES
Enable GST in tally

This will show another screen in which you have to fill GST details of the company such as state in which the company is registered, its registration type, GSTIN number, etc. After that save the details by pressing Y or Ctrl + A to accept.

Settings of GST
  • 4: In the next step we have to create ledgers for further processing so, to create ledgers-

Go to the gateway of tally >Accounts info >Ledgers >Create-

create ledgers in tally
  • Than Create ledgers of following-
    • Purchase A/C under Purchase account, then in statutory information
      • Applicable GST >Set/alter GST details- YES, this will appear another window on your screen and there you will have to enter following details-
        • Nature of transactions-Purchase taxable in case of intrastate purchases and Inter-state purchase taxable in case of inter-state purchase.
        • Tax type– Mention GST slab rates as per the case for e.g. 12 %.

Then, save the details and exit the window and select goods in the Type of Supply option.

  • Similarly, in Sales case you have to create Sales A/c under Sales accounts, and in Nature of transactions you will have select sales taxable or inter-state sales taxable depending on the case and remaining all the configurations is similar as purchase. 
GST in tally
  • Also,create ledger of the sundry creditor in the purchase and Sundry debtor in sales and mention the state in the ledger to recognized intrastate and interstate trader.
  • Further under Duties and Taxes head create ledgers of Input/Output CGST, SGST and IGST and enter the necessary details.
Ledgers in tally
  • 5: Furthermore, create stock items, from Gateway of the tally >Inventory info. > Stock items >Create
  • 6: Than, pass the necessary transactions of PURCHASE (F9) and SALES (F8) from Gateway of the tally >Transactions >Accounting vouchers.
    • Enter PURCHASE/SALES amount, party and charged input/output CGST and SGST or IGST. For tax analysis press ALT+A from vouchers.
Intrastate trading in GST
Interstate trading in GST
  • 7: After that pass the necessary entries of payment to creditors and receive from debtors.
  • 8: At last in payment voucher press ALT+S for statutory payment of GST amount.

Rahul Dass

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