GST Accounting Entries in

Tally – Sales and

Purchases
In this post you are going to learn in detail step by step about how you can
easily create GST Accounting Entries in Tally.

Before creating GST

Accounting Entries in
Tally…
As I said, we need to create certain ledgers as well as alter certain
ledgers.

We have to create taxation ledgers for recording the GST.

Now, GST includes majorly 3 types.

 CGST – Central Goods and Services Tax

 SGST – State Goods and Services Tax
 IGST – Integrated Goods and Services Tax

So, coming back to the GST ledgers, we need to create the following
GST ledgers in Tally. They are:

 Output CGST Ledger – when you sell goods or services inside your state
 Output SGST Ledger – when you sell goods or services inside your state
 Output IGST Ledger – when you sell goods or services outside your
state
 Input CGST Ledger – when you buy goods or services inside your state
 Input SGST Ledger – when you buy goods or services inside your state
 Input IGST Ledger – when you buy goods or services outside your state
 All the ledgers will be under Duties and Taxes as all of them are
taxes.
Remember, when you sell goods or services, there will always
be Output Tax and when you buy goods or services, there will
always be Input Tax.
While creating GST taxation ledgers, you need to take extreme care
of one thing and that is rate of tax.
If you have already enabled and set up GST in Tally, you must have
set the GST rates in Statutory and Taxation in the Configuration
menu.
That rate will be automatically taken up when you create
a purchases or sales voucher in Tally.
Therefore, while creating GST ledgers, you need to put the tax rate
to zero.

Let me show you how you can create 1 ledger from the above list
because the rest of the ledgers have to be created in the same way.

How to create GST Taxation

Ledgers in Tally
Creating GST taxation ledgers in Tally is as easy as creating
ledgers in Tally. Let’s start.
 From Gateway of Tally, go to Accounts Info.
 Select Ledgers
 Select Create under Single Ledger. Now the real fun starts.
 How to create Input CGST Ledger in Tally

Take a look at the picture above because that is exactly, how you will
need to create the Input CGST Ledger in Tally.
 The name will be Input CGST as it is input tax which we pay when we
purchase goods or services attracting GST.

 As I said, it will be under Duties and Taxes.

 Now, in Type of Duty/tax option, select GST.
 For Tax type, select Central Tax for now.
o You have to select State Tax for SGST and Integrated Tax for
IGST and Cess for Cess.
 Tax Type while creating GST Ledger in Tally

 The option Inventory Values are affected will be set to No because it has
no use for this ledger.
 Percentage of calculation should be set to 0%. It is because Tally takes
the percentages from your configuration or the stock items or the
classification.
This is crucial to know because if you set the percentage here you will not
get the amount automatically calculated while creating an entry which
includes GST.
 Rounding method that I have selected is Normal Rounding. However,
you can select the method as per your choice.
 Rounding limit is set to zero. Again, it is my choice. You can select a
different number.
 Now, just press Enter till you save the ledger.
 Congo! You have created a GST ledger, specifically an Input CGST
ledger in Tally.

You can easily create all the GST Ledgers as in the list above by
following this method.

Just change the name, the Tax Type and you are done with
creating all the ledgers. Repeat the same method and in no time you
will have all the six ledgers required for passing the GST accounting
entries in Tally.

Now that you have created all the GST tax ledgers, we need to make
sure that certain other ledgers are configured for GST applicability
otherwise they won’t work as required.

Those ledgers are important for passing GST Accounting Entries in

Tally. They are:

 Sales and Purchases Ledger

 Stock Items Ledger
 Sundry Debtor and Sundry Creditors Ledger

We need to configure these ledgers so as to make them GST

enabled in Tally. Here is how you can do it.

Follow me.
 How to Set GST Details in Sales
Ledgers in Tally
Let us start with altering Sales Ledger to enable it for GST. You can
follow the steps even if you want to create a new GST Sales Ledger.
Please note that if you do not alter the Sales Ledger and do not
enable GST in that ledger, GST will not be automatically calculated
and will not get displayed while creating a Sales Voucher which
includes GST.
I have already created a Sales Ledger in Tally named Domestic
Sales. I will alter it right now in front of you.

Altering Sales Ledger in Tally for GST

Have a look at the Statutory Information section on the left hand

side. That is what we have to alter to enable the sales ledger for
GST.
 First Option – Is GST Applicable? should be set to Applicable.
 Second Option is Set/alter GST Details. Press Y and press Enter. You
will see a GST Details menu which is exactly the same as was at the time
we set the GST details for Tally in the previous post.
o Here is how it looks like:

GST Rate Details in Sales Ledger in Tally

o Enter the Description and the HSN Code which you can get from your
GST registration.
o Nature of Transaction is important here. There are different natures of
transaction. Have a look at in the picture below.
 Natures of Transaction in GST in Tally

o When you select Nature of Transaction, you will see the Natures of
Transaction on the right hand side of the screen as in the picture above.
o You will have to select the nature of transaction here according to your
business.

 For sales inside your state, select Sales Taxable, Exempt or Nil Rated.
 For sales outside your state, select Interstate Sales Taxable, Exempt
or Nil Rated.
 Similarly select a particular transaction type as per your business.

o Finally, set the tax rates under the option Tax Type as show in the picture
above and press Enter to save the details.
 Now comes another important option i.e. Type of Supply. There can be
either Goods or Services in your business. Select one of the options. I
have selected Goods.
 Next option is for Service Tax applicability. You can either put it
to Undefined or Not Applicable. I have put it Undefined as it was default
selection.
 Now just press Enter few times and save the ledger with all the details
that you have entered.

We have successfully created a Sales Ledger in Tally and have

enabled GST details for the ledger too.

It is good to name your GST Sales or Purchase Ledger according to

the GST percentage rates.

For example, for 28% GST on sales, the name of the ledger can
be GST Sales 28%. This will differentiate all the sales according to
the rates in Profit and Loss Account in Tally and it will be easy for you
to see sales in different rates of GST.

This will help us pass GST accounting entries in Tally, be it sales or

purchases with very much ease.

You have to create a Purchase Ledger. And guess what? You have
to follow the exact same method which I have described above.

The only difference will be that it will be a Purchase Ledger instead

of Sales Ledger.
 So, go ahead and create a Purchase Ledger and simply follow the
steps above. You will in no time have successfully created a GST
Purchase Ledger in Tally.

From now on I am assuming that you have created the required GST
Tax Ledgers and enabled GST in Purchase and Sales ledgers in
Tally.

These ledgers are required for passing GST Accounting Entries in

Tally so create or alter them with care for perfect entry at the end.

Now, comes Stock Items.

How to create GST Stock Items

in Tally
Anything you sell or purchase can be recorded in Tally in stock items
if you have created them.

Basically a stock item is a unit through which you can record the
number of items sold or purchased. For example, if you sell a
mobile, then stock item here is mobile.

We have to alter the stock items to enable them for GST so we can
pass the entry for GST Sales or Purchases.

Again, creating a stock item in Tally is almost same as altering it.

I will be explaining you here, how you can alter it or enable GST in
your stock item in Tally.

Here you go! Let’s start.

 From Gateway of Tally, go to Inventory Info.
 Select Stock Items
 Select Alter under Single Stock Item. (or you can select create for
creating a new stock item)
 I have already created a stock item called Mobile under a group called
Mobiles.
 What you have to look here is the GST details under Statutory
Information as shown in the picture below.

GST Stock Item Alteration in Tally

 If you notice, the statutory information menu is almost same as was while
we were creating a sales ledger.

 Now, select Applicable against GST Applicable option.

 Next option is Set/alter GST Details. Press Y and press Enter.
 You will see the same GST Tax Rate Details menu which you saw when
we were creating Sales Ledger and filling up the GST details in that
ledger.
 But, there is one single difference and that is Calculation type.
 GST Tax Rate Details in Stock Item in Tally

 For this post, select On Value because On Item Rate is an advanced

option and I want to explain GST in as simple manner as possible.
 Set the rates, the same way you had set while creating the Sales Ledger
above and press Enterto save the details.
 Now, you will come back in the outer menu. Select Type of Supply as
Goods or Services as per your requirement.
 Press Enter till you save the ledger.
 Congratulations! You have just created or altered a GST Stock Item in
Tally.
 Similarly, you can create as many as GST Stock Items in Tally as you
want.

Now, let us go and alter the Sundry Debtor and a Sundry Creditor
Ledger to make them GST supported in Tally.

This is necessary to pass GST Accounting Entries in Tally at the end.

How to create GST Sundry

Debtor/Sundry Creditor Ledger
in Tally
I already have a Sundry Debtor created in my Tally.
 I will alter it here and will show you how to add the GST details in the
Sundry Debtor ledger.

Even if you are creating Sundry Debtor Ledger for the first
time, the procedure is simple and almost the same.

Here you go. Let’s start.

 From Gateway of Tally, go to Accounts Info.

 Select Ledgers from the menu.
 Select Alter under Single Ledger or Create under Single Ledger if you
want to create a new Sales Ledger.
 There is a Sundry Debtor named Amit which I have created. I will be
altering it.

Creating or Altering GST Sundry Debtors Ledger in Tally

 In the picture above, go to Set/Alter GST Details under the Tax

Registration Details option on the bottom right.
 Press Y and press Enter.
 GST Details in Sundry Debtors Ledger in Tally

 Here, select the Registration type as per the details from your debtor. In
most cases it will be Regular.
 Enter the GSTIN or UIN

 Select the Party Type. There will be 3 options which are

o Not Applicable – Most cases

o Deemed Export and

o SEZ (Special Economic Zone)

 Last option is for E-Commerce Operator. E-commerce operators are sites

like Amazon or Flipkart who allow other people to sell their goods on their
sites. If you are selling your own goods from your site and no one else is
selling goods except you on your own site than you are not an e-
commerce operator.
 Save the details and press Enter until you save the whole ledger.
 Congratulations, you have successfully created or altered a GST Sundry
Debtor Ledger.

The best thing is, you can similarly create or alter the GST Purchases
Ledger in Tally. I have already created GST Sundry Creditor Ledgers
in my Tally.

But, if you face any difficulty in creating GST Sundry Creditor

Ledger, you can always comment below and I’ll be happy to
help.

Now, let us quickly recap what we have done till now.

 By the way, if you have followed this post till now and you have
simultaneously created or altered all the ledgers in Tally, then hats
off to you.
Only a few handful of people are able to do this.

Coming back to the recap, here is what we have completed till now.

 Created/Altered GST Taxation Ledgers in Tally

 Entered GST Details in Sales as well as Purchase Ledgers in Tally
 Created/Altered Stock Items in Tally for GST in Tally
 Created/Altered GST Sundry Debtors and Sundry Creditors Ledgers in
Tally.
Now it is the time to create an actual sales and a purchase entry in
Tally which will include GST.

This was what I was talking about till now. The real time to create
GST Accounting Entries in Tally.

Creating GST Accounting

Entries in Tally
For this post, we will be creating a sales entry as well as a purchases
entry which will include GST in Tally.

I am assuming that you have created all the ledgers above and are
ready to pass sales and purchases entry in Tally.

In short, everything is set and we are ready to go to pass the sales

entry along with the GST in Tally or one of the GST accounting
entries in Tally.

Creating GST Sales Entry in

Tally
 From Gateway of Tally, go to Accounting
Vouchers under Transactions.
 Press F8 to select Sales Voucher.
 In Party A/c name, select the Sundry Debtor. In my case, I am
selecting Amit.
 In Sales Ledger, select the GST Sales Ledger that we have created
above. Here it is Domestic Sales.
 Now, you need to select a Stock Item you have created. Here, it is Mobile.
 Enter the quantity and rate for the Stock Item which here is 1 Mobile
for ₹20,000.
 Press Enter 2 times after entering the Amount and you have to select
the GST Tax Ledgers.
 Select Output CGST as well as Output SGST. You will notice that the
amount of GST will be calculated automatically.
 Enter the Narration and press Enter to save the voucher.
 Congratulations! You have successfully created a GST Sales Entry in
Tally. Have a look at the picture below to see what I am talking about.

GST Sales Entry with Stock Items in Tally

You can click on the image above to see it clearly.

Now, similarly, we will create a GST Purchases Voucher in Tally. The

procedure is almost the same and the only difference is that it is a
Purchase Voucher.

Basically both Purchases and Sales vouchers are a type of

accounting entries and therefore you can also call them GST
Accounting Entries in Tally.
 Creating GST Purchases Entry in
Tally
 From Gateway of Tally, go to Accounting
Vouchers under Transactions.
 Press F9 to select Purchases Voucher.
 Enter the Supplier Invoice no, enter the Date and press Enter.
 Select the Sundry Creditor with GST Details which in our case is Rohan.
 Select a Purchase Ledger as we created/altered above with GST Details
which in our case is Domestic Purchases.
 Select a Stock Item from the List of Stock Items. In our case it is Mobile.
 Enter the Quantity and Rate. The Amount column then will automatically
get filled in.
 Press Enter exactly 2 times when in Amount column.
 Select Input CGST and Input SGST and the GST amount will be
automatically calculated in Tally.
 Enter the Narration and save the voucher.
 Congratulations! You have created a GST Purchases Entry in Tally.

GST Purchase Voucher with Stock Item in Tally

You have also created second of the most important GST accounting
entries in Tally which is GST Purchases Entry in Tally.
At the End…
A huge congratulations to you because you have successfully,
with flying colors learned how you can create GST Purchase
Vouchers or Entries in Tally as well as GST Sales Vouchers or
Entries in Tally.

In short, you have learned how to create GST Accounting Entries in

Tally.

If you remember, I asked you to create IGST ledgers also.

Well, they are used whenever you are selling outside the state or
purchasing from the other state.

In Tally, just select IGST ledgers whenever you want to pass entry
in Tally which involves sales or purchase outside the state instead of
CGST and SGST ledgers.

That’s it.