Calculation of VAT Based on Quantity for Petrol and Diesel in Tally

The maintenance of proper accounts and records is very important for every enterprise irrespective of its size and nature. A businessman has to take care of all goods and services where VAT is applicable, cess, and surcharge among other key issues. Keeping a track of all your transactions through Tally ERP 9 ensures that your accounts are well prepared and the chances of error are minimal. The accounting of VAT on petrol and diesel varies across the different states of India due to different rules and regulations pertaining to VAT. The amount of the VAT chargeable on the Petrol and Diesel is also dependent on the excise duty applicable. Let’s explore the various aspects of diesel bill format, and petrol pump slip format.

Do You Know?

Many European Countries started implementing the VAT system since the year, 1960.

Defining Value Added Tax (VAT)

A manufactured product passes through various stages of production starting from the procurement of raw materials up to its commercial sale. An indirect tax is levied across the various stages of production. This is known as Value Added Tax. The tax which is paid for acquiring this stock item is allowed to the purchaser as Input Tax Credit. When this stock item is sold, the value-added tax which is paid on purchasing the item is adjusted toward the input tax credit, and the balance amount is paid. The purchases entry with VAT and Sales entry with VAT are recorded with the help of a number of readings of the petrol pump machine. 

The Process of Calculating VAT

The tax paid at the time of the purchase is Input Tax and the tax which is to be paid at the time of sales is known as Output Tax. 

Value-added tax is calculated in the following manner:

VAT = Output Tax - Input Tax

At every stage of the manufacturing process of any product, the buyer has to pay the VAT amount to the seller as the difference in the gross amount. The total VAT paid by each of the suppliers is finally paid by the consumer.

Value Added Tax (VAT) in Tally ERP 9

• The accounting of Value Added Tax in Tally ERP 9 is a very simple and easy setup process.
• With the help of Tally ERP 9, it becomes flexible to create and manage the VAT ledgers and groups and the different tax rates as per their applicability.
• It also helps to calculate the Tax when the price of the product is inclusive or exclusive of tax.
• It helps to maintain the proof for all the transactions.
• It helps to track the transactions.
• It helps to create a provision of tax invoice
• It helps to create a summary of vouchers and payments.

Also read: Difference Between VAT and GST

Accounting of VAT for Petrol and Diesel

Readings of the pump machine play an important role in determining the VAT on petrol. These machine readings show both the cash and credit petrol and diesel sales. The total credit sales of the day are deducted from the total petrol and diesel sales to determine the cash sales. In Tally ERP 9,  the users can record the VAT on Petrol by charging the VAT based on quantity. For an accounting of VAT on petrol and diesel, the petrol companies have to maintain the proper records of petrol receipt, diesel receipt, petrol pump slip, and also have to generate the petrol bill online if required.

Creation of Ledger for VAT on quantity

Following are the steps involved in the creation of a ledger for VAT:

1. From the ledgers tab, enter the name of the ledger
2. Place the ledger created under the group named - Duties and Taxes. Select the option of Type of Duty/Taxes as Others.
3. Now press the Enter key to save the ledger created. You can create two separate ledgers for diesel and petrol.

Creating Surcharge Ledger in Tally ERP 9

1. From the ledgers tab, enter the name of the ledger
2. Place the ledger created under the group named - Duties and Taxes. Select the option of Type of Duty/Taxes as Others.
3. Enter the percentage of surcharge applicable.
4. Press the enter key to save the details.

Voucher Class Applicable for Sale of Petrol and Diesel

Following are the key steps involved in the creation of a voucher based on the quantity of petrol and diesel that is sold:

1. Under the tab of Name of Class - Type the name as 'VAT on Quantity of Petrol'. You can also press Alt G to directly go to the create ledger option.
2. Enable the option of VAT under the sales ledger. You must keep in mind that you have not provided the VAT details in any other ledger.
3. Now select the option of VAT on quantity and surcharge ledger.
4. Now press enter to go to the voucher screen again.
5. Now create the other voucher with the name - VAT on quantity or Value. You can also create the ledger directly by pressing Alt G.
6. Enable the VAT option in the sales ledger.
7. Now select the ledgers of VAT ON quantity and surcharge. You can find this information from the petrol receipt or diesel receipt as the case may be.
8. Press the enter key to go back to the voucher screen.
9. Create the other ledger with the name VAT on quantity for diesel in the same way as discussed above.
10. Save all the vouchers created.

Calculation of VAT on the quantity of Petrol and Diesel

Following are the steps to record the VAT on the quantity:

1. Open the vouchers tab from the gateway of Tally and select the sales voucher by clicking the F8 key. You can also press Alt G directly to create the voucher.
2. Select the voucher of VAT on the quantity that you have already created
3. Choose the party name from the list.
4. Select the item (petrol or diesel) with the VAT on petrol or vat on diesel.
5. Enter the quantity sold along with their rate that is shown in the petrol receipt.
6. Save all the details entered.

Tracking of Multiple Consignment Notes into a single sales invoice

1. Select the vouchers option from the gateway of Tally by pressing the F10 key. Now type or click the Delivery Note option.
2. Select the option of VAT on quantity.
3. Choose the party name from the list.
4. Select the petrol/diesel option.
5. Enter the details from the petrol bill format such as tracking number, quantity, and its rate per unit.
6. Save all the details.

Recording of Sales along with the calculation of the amount of VAT

1. Select the voucher option from the gateway of Tally. Press the F8 key to select the sales voucher.
2. Enter the items of stock, their quantity, and rate from the petrol bill.
3. Now select the VAT ledger. An amount will appear as per the percentage that is already entered by you as VAT on petrol or VAT on diesel.
4. Save all the details.

Also Read: Journal Voucher in Tally - Examples, & How to Enter Journal Vouchers in Tally

Purchase and Sale Entry in Tally with VAT

The Sales voucher in Tally is used to record the sales including VAT and excise. The Sales Entry in Tally with VAT is passed in the following ways -

1. From the gateway of Tally, select the Sales voucher from the list of all accounting vouchers. You can directly press the F8 key to select it.
2. From the recipient field, select the party name.
3. Now select the sales ledger with the nature of the transaction.
4. Enable the option of inclusive of duties and taxes.
5. Enter the quantity and rate inclusive of VAT.
6. Press enter to save the details.
7. Select the common VAT ledger from the Group of duties and taxes.
8. Under the option of duties and taxes, select the VAT system.
9. Enter the narration of the entry if required and save the details.

The Purchases voucher in Tally is used to record the total purchases including VAT and excise. The Purchase Entry in Tally with VAT is passed in the following ways -

1. From the gateway of Tally, select the Purchase voucher from the list of all accounting vouchers. You can directly press the F9 key to select it.
2. From the supplier list, select the name of the seller.
3. Now select the purchase ledger with the nature of the transaction.
4. Enable the option of inclusive of duties and taxes.
5. Enter the quantity and rate inclusive of VAT.
6. Press enter to save the details.
7. Select the common VAT ledger from the Group of duties and taxes.
8. Under the option of duties and taxes, select the VAT system.
9. Enter the narration of the entry if required and save the details.

The Process of Maintaining a Petrol Pump Account in Tally ERP 9

Working with Transactions:

Given below are the details of the various steps involved in the process of maintaining a petrol pump account in Tally ERP 9:

• Credit sales and other sale entries can be passed throughout the day/shift i.e before the cash sales entry.
• At the end of the day, a nozzle entry is passed.
• In the nozzle reading entry, the reading of a nozzle cannot be passed more than once.
• On acceptance of the nozzle reading entry, an evaporated entry is passed automatically.
• Finally, the cash sale entry is made, where users can enter petro card & debit/credit card sales.

 A few key points:

• No entry can be passed after cash sale entry is passed for the current day/shift.
• The work shift is automatically selected.

Also read: All About Banking Entry In Tally ERP 9

Credit Sales Entry

• To create Credit Sales voucher entry, navigate to Petro Tally -> Transactions ->Credit Sales and complete the details as described below:
• Set the date
• The shift is set automatically
• Set indent no.
• Select party or it will pick automatically as per assigned Indent book (if Credit Sales as per vehicle no. first not enabled in F11->Petro Tally)
• Select Vehicle No. from the list of vehicles
• Enter driver name manually
• Mark as cleared if periodic statement generated (it will set “Yes’ if periodic bill generated by
• tracking the same).
• Users can manually set “mark as clear” to “No” if a periodic bill is deleted due to any reason.
• Select an item from the list of items with qty, rate, and press Ctrl+A to save the entry/voucher.

Recording of Petrol and Diesel charges in Tally

To record the expenses of Petrol and Diesel, create a new supplier with the name 'Fuel'. Add the new supplier by going to the supplier option. Now follow the given steps -

1. From the top menu bar, click purchases

2. Click new receipt

3. Select the 'fuel' supplier.

4. In the ' outgoing type' option, select travel.

5. Enter the net rate.

6. Enter the details of the amount and method of payment.

7. Click on create a receipt.

Conclusion

Recording the petrol expenses in Tally becomes a very simplified process with documents like the petrol bill, and a petrol receipt that helps with the requisite details. Every business needs to record all such transactions systematically to avoid any problems in the future. You must maintain a proper petrol pump account and record all the transactions under the specific sections provided. We hope that this article has helped you to understand the details about the VAT on petrol, VAT on diesel, petrol receipt, and concept of VAT in Tally ERP 9. For the Tally users, Biz Analyst is a very useful platform to manage their business. Tally users can use the Biz Analyst App to manage the business more effectively. You can manage the accounts, make ledgers, and even do data entry to keep the business on the right track.