5.1 AND 5.

What is Goods and Service Tax Act 2017?

GST is an Indirect Tax which has replaced many Indirect Taxes in India. The
Goods and Service Tax Act was passed in the Parliament on 29th March 2017.
The Act came into effect on 1st July 2017; Goods & Services Tax Law in India is a
comprehensive, multi-stage, destination-based tax that is levied on every value
addition.

In simple words, Goods and Service Tax (GST) is an indirect tax levied on the
supply of goods and services. This law has replaced many indirect tax laws that
previously existed in India.

Types of taxes under GST

There are currently three types of GST

 CGST – Central GST – Applies to sales within the state – goes to Central
Government
 SGST – State GST – Applies to sales within the state – goes to State
Government
 IGST – Integrated GST – Applies to sales outside the state – goes to Central
Government

For example, if you sell something within the state, 50% of the GST will be CGST
and 50% of the GST will be SGST. But when you sell something outside a state,
100% of it will be IGST which will go to the Central Government.

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Now that you have a basic understanding of how GST works, we can go ahead to
understand the working of GST in Tally along with its accounting and calculation.

Watch video on how to set GST details in TallyPrime

How to begin Tally ERP 9?

In order to use Tally, following steps must be followed

To create a company in Tally

To enable GST Features

To create ledgers

Let’s discuss the above in detail

To create a company in Tally

Step 1 : - Go to Gateway of Tally > Alt + F3 > Create Company

Step 2 : - Enter the basic information, i.e., name, mailing name and address of the
company, currency symbol etc.

Step 3 : - In the ‘maintain field’, select Accounts Only or Accounts with Inventory as per
the company requirements.

Step 4 : - In the Financial Year from, the first day of the current financial year for e.g., 1-4-
2018 will be displayed by default, which can be changed as per requirement.

Step 5 : - Enter the Tally Vault Password if required.

Step 6 : - Press Y or Enter to accept and save.

To enable GST features in Tally

Step 1 : - Go to Gateway of Tally > F11: Features > F3 : Statutory & Taxation

Step 2 : - In the screen you will find the following options : -


o Enable goods and service tax (GST): Yes
o Set/alter GST Details: Yes.

This will display another screen where you can set GST details of the
company such as the state in which the company is registered, registration
type, GSTIN number etc.
Step 3 : - Press Y or Enter to accept and save.

To create ledgers

After creating a company and activating GST features, you need to create
ledgers that will enable you to pass accounting entries in Tally ERP 9.

Step 1 : - Go to Gateway of Tally > Accounts Info > Ledgers > Create

Step 2 : - Create ledgers such as Purchase, Sales, State GST, Central, Integrated GST, Stock
item names etc.

Step 3 : - Select the appropriate group to which such ledger belongs for example state tax
under duties and taxes group.

Step 4 : - Enter the other related information required and press Y or Enter to accept and
save.

After creating ledgers we can proceed with preparing Accounting entries in Tally
ERP 9. For that we have to follow : -
Gateway of Tally > Accounting Vouchers

There are many accounting vouchers in Tally such as Payment, Receipt, Contra,
Sales, Purchase, etc. After choosing the relevant voucher we start passing the
accounting entries.

How will GST work in Tally.ERP 9?

The functionality of GST in Tally is almost the same as prevalent during erstwhile
taxation laws such as VAT or CST or Service Tax.

The first step before passing an Accounting Entry in Tally is to make GST
Calculation. But first, let’s take an example for our understanding. For example:
M/s ABC Ltd of Mumbai sold goods worth Rs. 50,000/- to M/s XYZ Inc. of
Ahmedabad; GST rate applicable for the given product is 18%

GST Calculation - M/s ABC Ltd has to collect GST and say it is 18%. Then GST will come
at Rs. 9,000/-.

Taxable Value - This is the portion on which tax will be levied (i.e.,) Rs. 50,000/- in this
case.

Type of Tax to select - Since it is a transaction involving Inter-State trade, the ledger to
create and select while preparing Accounting entry is IGST ledger.

Rate of Tax to be fed during 18% IGST (Tax type : Integrated Tax) .
Tax Ledger creation screen -

Tax rate to key while 18% IGST and Tally will automatically bifurcate and distribute the tax
preparing Stock Item Ledger - rate to CGST and SGST as 9% each.

Other ledgers to create - Create XYZ Inc., ledger along with GSTIN number.

Now we have to go to the Accounting Voucher Screen and fit these details in
Sales Voucher screen (F8). We are also not required to worry about tax
calculation as Tally automatically calculates Tax amount portion based on the
details fed in Stock Item Creation Screen and Tax ledger creation screen.

5.3
Record Purchases - GST Related topics
Composition Stock Items and Ledgers

You can record purchase of goods or services with or Sales

without reverse charge, under composition scheme of
GST.

● Intrastate purchase of goods and services

● Interstate purchase
● Purchase of services under reverse charge
 ● Purchase of services with discount

Intrastate purchase of taxable goods

1. Go to Gateway of Tally > Accounting Vouchers > F9: Purchase .

2. Enter the Supplier invoice no. and Date as per the sales invoice received from
the supplier.
3. In Party A/c name , select the supplier's ledger or the cash ledger.
4. Select the purchase ledger.
5. Select the required stock items, and specify the quantities and rates.
6. Select the central and state tax ledgers.
7. Press Enter to save.

The invoice received from composition or unregistered dealers will not have tax in it.
Hence, you need not select tax ledgers on such purchases.

Intrastate purchase of taxable service

1. Go to Gateway of Tally > Accounting Vouchers > F9: Purchase >

press Alt+I .
 2. Enter the Supplier invoice no. and Date as per the sales invoice received from
the supplier.
3. Select the purchase (service) ledger predefined with the tax rates, and enter the
amount.
4. Select the central and state tax ledgers.
5. Press Enter to accept.

The invoice received from composition or unregistered dealers will not have tax in it.
Hence, you need not select tax ledgers on such purchases.

Purchase of services attracting reverse charge

1. Go to Gateway of Tally > Accounting Vouchers > F9: Purchase >

press Alt+I .
 2. Enter the Supplier invoice no. and Date as per the sales invoice received from
the supplier.
3. Select the party ledger with the Registration type set to Regular .

Note: If the Registration type is not Regular , the transaction will appear under Not
relevant for returns section of GSTR-4 and GST CMP-08 .
4. Select the purchase (service) ledger in which the option Is reverse charge
applicable? is set to Yes , and the tax rates are defined .
5. Enter the amount.
6. Press Enter to accept.

Interstate purchase from regular dealers

1. Go to Gateway of Tally > Accounting Vouchers > F9: Purchase .

2. Enter the Supplier invoice no. and Date as per the sales invoice received from
the supplier.
3. In Party A/c name , select the supplier's ledger.
4. Select the purchase ledger.
5. Select the required stock items, and specify the quantities and rates.
6. Select the integrated tax ledger.
7. Press Enter to save.

Purchase of services with discount

1. Go to Gateway of Tally > Accounting Vouchers > F9: Purchase >

press Alt+I .
 2. Enter the Supplier invoice no. and Date as per the sales invoice received from
the supplier.
3. Select the party ledger with the Registration type set to Regular .

Note: If the Registration type is not Regular , the transaction will appear under Not
relevant for returns section of GSTR-4 and GST CMP-08 .
4. Select the purchase (service) ledger in which the option Is reverse charge
applicable? is set to Yes , and tax rates are defined .
5. Enter the amount.
6. Select the discount ledger created for services , enter the percentage or amount.
7. Press Enter to accept.

When recording the sale of goods, choose cash or bank for cash sales and
the party ledger for credit sales. In TallyPrime, you can record sales of goods
or stock items using the Item Invoice mode, and specify the stock item
details, quantity, and rate. In the Party Details screen, the Place of Supply is
prefilled with the party ledger state. If the Place of Supply is the same as
your company states then the sales transaction is recorded as a local supply
of goods. To record the tax for local sales, you must use the CGST and SGST
ledgers.

1. Open the Sales Voucher in the Item Invoice mode.

a. Press Alt+G (Go To) > Create Voucher > press F8 (Sales).
Alternatively, Gateway of Tally > Vouchers > press F8 (Sales).
b. Press Ctrl+H (Change Mode) > select Item Invoice.

If you have created multiple registrations in TallyPrime Release

3.0 or later, then to change the registration,
press F3 (Company/Tax Registration) > type or select the
Registration under which you want to create the voucher and
press Enter.

2. Specify the buyer details.

a. Party A/c name: Select Cash or Bank for cash sales and the party
name for credit sales, and press Enter.
You can create the Party A/c on the fly by pressing Alt+C.
The Dispatch Details screen appears.
b. Dispatch Details: Enter the Dispatch Details, as needed and
press Enter.
You can choose to enable the options for Order Details by
pressing F12 (Configure).
The Party Details screen appears.
c. Party Details: You can update the buyer details while recording the
transaction and print the same in the invoice.
The Place of Supply field is prefilled with the party ledger state. You
consider a sale as a local sale under GST if the buyer is from the same
state as your company state.

Your regular customer may need specific details, such as the

address with the landmark, alternative contact number, and so
on, to appear in the printed invoice. In such cases, create the
party account with the required details and select the same party
account in the Buyers field.
d. As always, you can press Ctrl+A to save and proceed.
3. In the Sales ledger, select the common sales ledger.
Ensure that GST applicability is set to Applicable and that no GST
rate is defined.
4. Enter stock item details.
a. Name of Item: Select the stock item.
For GST to be calculated in the voucher, ensure that the stock item is
configured with the correct GST Rate.
b. Specify Quantity and Rate.
In case you do not see the required item in the list, you can create the
stock item on the fly by pressing Alt+C.
5. Select the tax ledgers CGST and SGST for local sales.
GST is calculated based on the tax rates defined in the stock item
ledger.

If you are selling goods with the same GST rate then you can
define the GST rate at the time of creating the company. In such
cases, the GST gets calculated based on the rate defined when
creating the company.

6. To view the Tax Analysis, press Ctrl+O (Related Reports) > GST Tax
Analysis. Press Alt+F5 (Detailed) to view the detailed breakup of the
tax.

7. Provide Narration, if needed, and press Ctrl+A to save the sales

voucher.
8. Print the invoice.

a. In the sales voucher, press Ctrl+P.

Alternatively, press Alt+P (Print) > Current.
b. In the Print screen, press C (Configure) to configure the print options
for your invoice, if needed.
  To change the printer, C (Configure) > press F6 (Printer) > select a
printer from the List of Printers > and press Enter.
 To print multiple copies of the invoice, press F5 (No. of Copies) and
press Enter. You can also select the Type of Copy (for example,
Original, Duplicate, or Triplicate, as needed).
 To view the GST breakup of each item, go to C (Configure) > set Show
Item-wise GST details as Yes.

c. Press I (Preview) to check the invoice before printing if needed.

d. Press P (Print) to print the invoice.

To know more, refer to Print GST Details in Invoice

You can generate an e-Invoice and e-Way Bill, if needed . To know more about
e-Invoice and e-Way Bill, go to e-Invoice using TallyPrime and e-Way Bill
using TallyPrime.

The same transaction you can record using As Voucher mode if you are
familiar with the double entry mode of accounting. If you record the
transaction in Voucher Mode, it appears as below.
Now that you have recorded a local supply of goods with GST, you can see
the transaction in the Local Supplies under Outward Supplies of GSTR-1.
To know more about GST Returns, refer to GSTR-1.

If you are in Rel 2.1 and earlier, you can view the transaction in
the Local Sales under Outward Supplies of GSTR-1.

Local supply of services | Accounting

Invoice mode
When recording the sale of services, choose cash or bank for cash sales and
party ledger for credit sales. In TallyPrime, record sales of services and the
total amount using the Accounting Invoice mode. An accounting ledger is not
required as there is no stock item to allocate. In the Party Details screen, the
Place of Supply is prefilled with the party ledger state. If the Place of Supply
is the same as your company states then the sales transaction is recorded as
a local supply of services. To record the tax for local sales, you must use the
CGST and SGST ledgers.

1. Open the Sales Voucher in the Accounting Invoice mode.

a. Press Alt+G (Go To) > Create Voucher > press F8 (Sales).
Alternatively, Gateway of Tally > Vouchers > press F8 (Sales).
b. Press Ctrl+H (Change mode) > select Accounting Invoice.

If you have created multiple registrations in TallyPrime Release

3.0 or later, then to change the registration,
press F3 (Company/Tax Registration) > type or select the
Registration under which you want to create the voucher and
press Enter.

2. Specify the buyer details.

a. Party A/c name: Select Cash or Bank for cash sales and the party
name for credit sales, and press Enter.
You can create the Party A/c on the fly by pressing Alt+C.
The Dispatch Details screen appears.
b. Dispatch Details: Enter the Dispatch Details, as needed and
press Enter.
You can choose to enable the options for Order Details by
pressing F12 (Configure).
The Party Details screen appears.
c. Party Details: You can update the buyer details while recording the
transaction and print the same in the invoice.
The Place of Supply field is prefilled with the party ledger state. You
consider a sale as a local sale under GST if the buyer is from the same
state as your company state.

Your regular customer may need specific details, such as the

address with the landmark, alternative contact number, and so
on, to appear in the printed invoice. In such cases, create the
party account with the required details and select the same party
account in the Buyers field.
d. As always, press Ctrl+A to save and proceed.
3. Enter Particulars details.
a. Select the service ledger.
For GST to be calculated in the voucher, ensure that the service is
configured with the correct GST Rate.
b. Specify the Amount.
Create the service ledger on the fly by pressing Alt+C.
4. Select the tax ledgers CGST and SGST for local sales.
GST is calculated based on the tax rates defined in the service ledger.

If you are selling services with the same GST rate then you can
define the GST rate at the time of creating the company. In such
cases, the GST gets calculated based on the rate defined when
creating the company.
5. To view the Tax Analysis, press Ctrl+O (Related Reports) > GST Tax
Analysis. Press Alt+F5 (Detailed) to view the detailed breakup of the
 tax.

6. Provide Narration, if needed, and press Ctrl+A to save the sales

voucher.
7. Print the invoice.
a. In the sales voucher, press Ctrl+P.
Alternatively, press Alt+P (Print) > Current.
b. In the Print screen, press C (Configure) to configure the print options
for your invoice, if needed.
 To change the printer, C (Configure) > press F6 (Printer) > select a
printer from the List of Printers > and press Enter.
 To print multiple copies of the invoice, press F5 (No. of
Copies) and Enter. You can also select the Type of Copy (for
example, Original, Duplicate, or Triplicate, as needed).
  To view the GST breakup of each item, go to C (Configure) > set Show
Item-wise GST details as Yes.

c. Press I (Preview) to check the invoice before printing if needed.

d. Press P (Print) to print the invoice.

To know more, refer to Print GST Details in Invoice

You can generate an e-Invoice and e-Way Bill, if needed . To know more about
e-Invoice and e-Way Bill, go to e-Invoice using TallyPrime and e-Way Bill
using TallyPrime.

Now that you have recorded a local supply of services with GST, you can see
the transaction in the Local Supplies under Outward Supplies of GSTR-1.
To know more about GST Returns, refer to GSTR-1.

If you are in Rel 2.1 and earlier, you can view the transaction in
the Local Sales under Outward Supplies of GSTR-1.
5.5

Introduction

One of the key aspects of the GST era is that most of the indirect taxes -
for which returns had to be filed separately for various businesses - have
been subsumed. Today, irrespective of whether one is a trader,
manufacturer, reseller or service provider, one needs to file GST returns
online, in the prescribed formats.

Under GST, there are 19 GST return forms, which tax payers can use
to file GST returns online. All these forms are required to be e-filed as per
the GST return filing process laid down in the GST return rules section of
the GST Act. The details of each of these GST return formats, along with
details of applicability and periodicity, are as follows -

GST Returns Forms - At a Glance

Category GST Return Frequency Due Date Details to be

Types Furnished

Regular Dealer Form GSTR- Monthly 10th of Furnish details of

1 succeeding outward supplies of
month taxable goods
and/or services
affected
Form GSTR- Monthly On 11th of Auto-populated
2A succeeding details of inward
Month supplies made
Category GST Return Frequency Due Date Details to be
Types Furnished
available to the
recipient on the
basis of Form
GSTR-1 furnished
by the supplier
Form GSTR- Monthly 15th of Details of inward
2 succeeding supplies of taxable
month goods and/or
services for
claiming the input
tax credit. Addition
(Claims) or
modification in
Form GSTR-2A
should be
submitted in Form
GSTR-2.
Form GSTR- Monthly 17th of Details of outward
1A succeeding supplies as added,
month corrected or
deleted by the
recipient in Form
GSTR-2 will be
made available to
the supplier
Form GSTR- Monthly 20th of Monthly return on
3 succeeding the basis of
month finalization of
details of outward
supplies and inward
supplies along with
the payment of the
amount of tax
Form GST Monthly — Communication of
MIS-1 acceptance,
discrepancy or
duplication of input
tax credit claim
Form GSTR- — 15 Days from Notice to a
3A Default registered taxable
person who fails to
furnish returns
Form GSTR- Annually 31st Dec of Annual Return –
9 next fiscal furnish the details
of ITC availed and
GST paid which
includes local,
interstate and
import/exports
Category GST Return Frequency Due Date Details to be
Types Furnished
Composite Tax Form GSTR- Quarterly — Details of inward
Payer 4A supplies made
available to the
recipient registered
under composition
scheme on the
basis of Form
GSTR-1 furnished
by the supplier
Form GSTR- Quarterly 18th of Furnish all outward
4 succeeding supply of goods and
month services. This
includes auto-
populated details
from Form GSTR-
4A, tax payable and
payment of tax.
Form GSTR- Annual 31st Dec of Furnish the
9A next fiscal consolidated details
of quarterly returns
filed along with tax
payment details.

Foreign Non- Form GSTR- Monthly 20th of Furnish details of

Resident 5 succeeding imports, outward
Taxpayer month or within supplies, ITC
7 days after the availed, tax paid,
expiry of the and closing stock
registration

Persons Form GSTR- Monthly 20th of Details of outward

providing online 5 succeeding supplies of online
information and month information and
database access database access or
or retrieval retrieval services
services by a person located
outside India made
to non-taxable
persons in India

Input Service Form GSTR- Monthly 0n 11th of Details of inward

Distributor 6A succeeding supplies made
month available to the ISD
recipient on the
basis of Form
GSTR-1 furnished
by the supplier
Form GSTR- Monthly 13th of Furnish the details
Category GST Return Frequency Due Date Details to be
Types Furnished
6 succeeding of input credit
month distributed

Tax Deductor Form GSTR- Monthly 10th of Furnish the details

7 succeeding of TDS deducted
month
Form GSTR- Monthly TDS certificate TDS Certificate –
7A to be made capture details of
available for value on which TDS
download is deducted and
deposit on TDS
deducted into
appropriate Govt.

E-commerce Form GSTR- Monthly 10th of Details of supplies

8 succeeding effected through e-
month commerce operator
and the amount of
tax collected on
supplies
Form GSTR- Annually 31st Dec of An annual
9B next fiscal statement
containing the
details of outward
supplies of goods or
services or both
effected through an
e-commerce
operator, including
the supplies of
goods or services or
both returned and
the amount
collected under

Aggregate Form GSTR- Annually Annual, 31st Reconciliation

Turnover Exceeds 9C Dec of next Statement –
INR 2 Crores fiscal audited annual
accounts and a
reconciliation
statement, duly
certified.

Final Return Form GSTR- Monthly Within 3 Furnish details of

(for taxable persons 10 months from inputs and capital
whose registration the date of goods held, tax
has been cancellation of paid and payable.
Category GST Return Frequency Due Date Details to be
Types Furnished
surrendered or registration or
cancelled) date of
cancellation
Order,
whichever is
later

Specialised Form GSTR- Monthly 28th of Details of inward

agency of the 11 succeeding supplies to be
United Nations month furnished by a
Organisation or person having UIN
any multilateral
Financial
Institution and
notified United
Nations Bodies,
Consulate or
Embassy of
foreign countries

Who Should File GST Return

According to the GST Act, a taxable person has established a business in

India, in any state, and is eligible to be registered under the act. This
person must be a part of a trade or commerce or any economic activity.
This includes local authority, LLP, HUF, individuals, cooperative society,
trust, and an AOP/BOI. All such entities must then file GST returns as
specified by the GST scheme.

The GST regime has stated that all businesses need to file GST returns but
the frequency of the returns and when to file depends on the total annual
turnover and the type of business. The businesses that have an aggregate
turnover of up to Rs. 5 crores can choose to file their GST returns under
the QRMP scheme. They will need to file 9 GST returns per year; 4 GSTR-1
returns, 4 GSTR-3B returns, and one annual return must be submitted.

The businesses that have an aggregate annual turnover of over Rs. 5

crores and those who have not chosen the QRMP scheme are required to
file GST returns twice per month. Moreover, they must file one annual
return. That makes up a total of 25 GST returns per year. Note that in
many cases such as composition dealers, there are other returns required
to be filed and submitted according to the GST regime.