Tally Erp9 Lesson 5 Managing Goods And services Tax In Tally Erp9

  Module 5: Managing Goods and Services Tax (GST) in Tally ERP9

In this module, you will learn the basics of Goods and Services Tax (GST) and how to manage it effectively in Tally ERP9. The module covers enabling GST in Tally, recording GST-related transactions, and generating various GST returns such as GSTR-1 and GSTR-3B. Along with theoretical concepts, practical examples and lab exercises are provided to give a hands-on understanding of GST implementation in Tally.

1. Introduction to GST: Basics of GST and its Structure in Tally ERP9

What is GST? Goods and Services Tax (GST) is a comprehensive, multi-stage, destination-based tax levied on every value addition. It replaced several indirect taxes such as VAT, excise duty, and service tax. GST is classified into the following components:

CGST (Central GST): Collected by the Central Government.

SGST (State GST): Collected by the State Governments.

IGST (Integrated GST): Collected on inter-state transactions by the Central Government.

GST in Tally ERP9: Tally ERP9 offers comprehensive support for GST accounting, including automatic tax calculations, filing GST returns, and GST reporting. Tally is equipped to handle different GST scenarios, such as intra-state, inter-state, reverse charge, input tax credit (ITC), and more.

2. Enabling GST in Tally: Setting Up GST Details in the Company Profile

Before recording GST transactions, you need to enable GST in Tally ERP9 and configure GST details.

Steps to Enable GST in Tally:

Open Company:

Go to Gateway of Tally > F3: Company Info > Select Company.

Activate GST:

Navigate to Gateway of Tally > F11: Features > F3: Statutory & Taxation.

Set Enable Goods and Services Tax (GST) to Yes.

In the GST Details window, enter the GST Registration Number, GST Applicable From date, and State of the company.

Set GST Rates for Items:

Go to Gateway of Tally > Inventory Info > Stock Items > Create/Alter.

Select the item and set the GST Rate in the Tax Classification section.

Define Tax Ledgers:

Create tax ledgers for CGST, SGST, and IGST:

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

Create ledgers such as CGST, SGST, and IGST under Duties & Taxes with the type of duty set to GST.

Practical Example:

Scenario: A business registered in Karnataka needs to enable GST. They are registered for GST with a GSTIN of "29AABCDE1234F1Z5."

Steps: Follow the steps mentioned above to activate GST and enter this GSTIN in the GST details section. Set GST rates for each stock item depending on its applicable tax rate, such as 5%, 12%, or 18%.

3. Recording GST Transactions: How to Create and Apply GST to Transactions

Once GST is enabled, Tally allows you to record transactions with GST. There are two primary types of transactions: Sales and Purchases.

Recording a Sales Invoice with GST:

Create Sales Voucher:

Go to Gateway of Tally > Accounting Vouchers > F8: Sales.

Select the Party Ledger (the customer).

Select the Sales Ledger (for example, Local Sales or Interstate Sales).

Choose the Stock Item sold.

Tally automatically applies the appropriate GST based on the tax rate set for the item and the nature of the sale (intra-state or inter-state).

Check that CGST and SGST/IGST are applied automatically.

Save the Invoice:

Verify that the GST amount is calculated correctly and press Enter to save the invoice.

Recording a Purchase Invoice with GST:

Create Purchase Voucher:

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

Select the Supplier Ledger.

Select the Purchase Ledger (for example, Local Purchase or Interstate Purchase).

Choose the Stock Item purchased.

Tally automatically applies the GST based on the purchase type and location.

Save the Voucher:

Verify that the CGST, SGST, or IGST is applied correctly based on the transaction type and save the purchase voucher.

Practical Example:

Scenario: A business sells an item costing ₹10,000 (with an 18% GST rate) to a local customer.

Steps:

In the sales voucher, select the stock item and customer.

Tally will apply CGST (9%) and SGST (9%) on the item, resulting in a total tax of ₹1,800 (₹900 for CGST and ₹900 for SGST).

The total sales invoice amount will be ₹11,800.

4. GST Returns: Generating GSTR-1, GSTR-3B, and Other GST Reports

Tally ERP9 simplifies the process of filing GST returns. It allows you to generate various GST reports, including GSTR-1, GSTR-3B, and GSTR-2. These reports are essential for complying with GST filing requirements.

Steps to Generate GSTR-1:

Go to GSTR-1 Report:

Navigate to Gateway of Tally > Display > Statutory Reports > GST > GSTR-1.

Review the Report:

Tally will display all outward supplies, categorized based on the nature of the transaction (local, interstate, etc.).

Verify all sales invoices are correctly classified under CGST, SGST, or IGST.

Export the Report:

Press Alt + E to export the GSTR-1 report in the required format (Excel/JSON).

Use the exported data to file GSTR-1 on the GST portal.

Steps to Generate GSTR-3B:

Go to GSTR-3B Report:

Navigate to Gateway of Tally > Display > Statutory Reports > GST > GSTR-3B.

Review the Report:

GSTR-3B is a summary return, which includes details of outward and inward supplies.

Review the tax liability and ITC (Input Tax Credit) details.

Export the Report:

Export the GSTR-3B report in the required format and use the data to file the return on the GST portal.

Practical Example:

Scenario: A business wants to file its monthly GSTR-3B return. They recorded multiple transactions in Tally, including sales and purchases.

Steps:

Navigate to the GSTR-3B report and verify the tax liability.

Confirm that ITC (Input Tax Credit) is accurately calculated based on purchases.

Export the GSTR-3B report and upload it to the GST portal for filing.

Lab Exercises

Lab 1: Enabling GST for a New Company

Create a new company in Tally ERP9.

Enable GST and configure tax rates for stock items.

Lab 2: Recording GST Transactions

Record 5 different sales and purchase transactions with different GST rates (5%, 12%, 18%).

Lab 3: Generating GSTR-1 and GSTR-3B

Generate and export GSTR-1 and GSTR-3B reports based on the transactions recorded in the previous exercise.

Conclusion

This module covered the essential steps for managing GST in Tally ERP9. You learned how to enable GST, record transactions with GST, and generate GST returns. Through practical examples and lab exercises, you should now be able to handle basic GST scenarios in Tally, ensuring smooth compliance with GST regulations.