written by | March 11, 2022

What is the process of Activating GST for Your Company in Tally?

GST was introduced in India in the year 2017. GST signifies different things to different stakeholders. In the case of a regular dealer, it becomes imperative to file GST returns on a monthly basis especially if the total turnover exceeds ₹ 1.5 crores. In the event that the annual turnover is less than ₹ 1.5 crores, you have the option of filing the GSTR 1 on a quarterly basis.

However, it is mandatory to file GSTR 3B on a monthly basis for everyone. Composite dealers, on the other hand, are required to file GSTR-4 on a quarterly basis. It is mandatory to create an e-way bill if the value of movable goods exceeds an amount ₹50,000. In such a case the businesses will have to create the e-way bill before enabling the movement of goods. All this becomes very simple and easy to execute with the help of accounting software

Tally has updated its software to meet the needs of businesses and make the GST compliance procedure simple and easy for all. GST enabled tally provides all these features and enables the user to meet all their requirements through one software in an easy manner.

Did you know?

Tally ERP 9 ensures you generate GST invoices and transactions as per the GST format.

Advantages of Using Tally ERP 9 for GST:

One of the leading accounting softwares in India, Tally has gained more popularity in GST Compliance. Tally ERP 9 enables the users to generate and record the GST invoices and transactions in the right manner. GST enabled Tally helps businesses to file their returns in an easy and efficient manner. When the data is keyed into Tally, it automatically prepares the different GST returns such as GSTR 1, GSTR 3B, and GSTR 4. The users can either export the data to the Excel Offline Utility tool or can do so in the JSON format which is supported by the GST Portal for data exchange. This one-of-a-kind software is highly effective in all error detection and correction. You can be assured that your taxes are filed correctly. Tally ERP 9 helps in the preparation of e-Way bills in a very simple manner. You can collect all the necessary data at the invoice level, export it in JSON format, and send it to the e-Way portal to generate an e-Way Bill. If you work as a tax consultant, you can readily share changes to returns by simply marking them. You can send a list of only the altered transactions with your clients so they can easily update their books by altering only the relevant details with a single click.

Also Read : Tally ERP 9: What Is It and How Can I Use It?

How to activate GST in Tally?

In order to use GST features in a company, one must activate GST in a Tally. After the activation, all GST features are available for all stock items, general ledgers, and transactions in Tally. Follow the following steps in order to activate GST in Tally:

Step 1: Click on F11: Features or press function key F11 from the gateway of Tally.

Step 2: Under the company features option select Statutory and Taxation or press function key F3

Step 3: Now in company operation alteration enter the following details

  • Enable Goods and Service Tax (GST): Yes
  • Set/alter GST details: Yes

Step 4: Now update all the details of GST

State: It will display automatically the state name which you have mentioned in the company details.

Registration type: Select GST type whether Composition or Regular.

GSTIN/UIN: Update your goods and service tax India ( GSTIN ) number printed on the invoice.

Applicable from: Enter the date from which GST is applicable on transactions.

Periodicity of GST: Enter the period for which GST is calculated as per the requirements of the company i.e. monthly or quarterly.

e-Way bill applicability: Choose this option as Yes.

Enter the date from which the e-Way bill is applicable

Enter threshold limit which is based on invoice value /taxable goods value/exempted goods value.

Now enter the amount of threshold limit allowed.

For intrastate choose option yes if it is applicable to your state.

Enable tax liability on advance receipts: To activate tax liability on advance receipts select Yes.

Set/Alter GST rate details: select yes to activate set or alter GST details.

Enable GST classification: select yes to activate GST classification.

Step 5: After entering all the details for activation of GST in Tally select yes to accept the data and save all the details in Tally.

Steps to create Ledgers in Tally

  • After the creation of a firm and the activation of GST features, you must build ledgers in order to pass accounting entries through Tally. The steps are as follows:
  • Create a ledger by going to Tally's Gateway > Accounts Info > Ledgers > Create.
  • Choose a name for the ledger, such as purchase, sales, state tax, central tax, integrated tax, stock item names, and so on.
  • Select the relevant group to which this ledger belongs, such as duties and taxes for state taxes.

After you've completed the first three steps, you may begin inputting accounting transactions in Tally. To do so, go to Tally's Gateway >Accounting Vouchers. Payment, Receipt Contra,Sales,Purchase,and other accounting Vouchers are available in Tally. Select the appropriate Voucher and begin entering accounting entries.  

How does GST work in Tally ERP 9?

Tally's GST functioning is nearly identical to those of any other taxing legislation such as VAT, CST, and Service Tax.  You have to first calculate the GST before passing any accounting entry in Tally. Let’s understand how to do this with the help of an example. 

ABC Ltd of Haryana sold goods worth Rs. 1,00,000 to XYZ Ltd. of Delhi. The applicable GST rate is 18%. How do you calculate the GST?

Calculation of GST: ABC Ltd. will collect GST at 18%. The GST calculated amounts to ₹18,000.

Taxable Value: This is the value at which the tax is levied, i.e., ₹1,00,000 in the present case.

Type of Tax: The buyer and the seller are located in different states. This makes it a case of interstate supply as a result of which IGST will be levied. This involves the creation of an IGST ledger. You will select this ledger while passing the accounting entry.

The rate of tax to be entered at the time of the Tax Ledger creation screen will be 18% IGST (Tax type:- Integrated Tax).  

The tax rate for the stock item ledger: 18% IGST. The tally will automatically divide it into CGST at 9% and SGST at 9% each.

Ledger to be created: The name of the company for which you sold the goods along with its GST number. 

Conclusion

The above details clearly indicate how Tally makes accounting simple by providing user-friendly options. We are sure you have acquired clarity on the various benefits of this software and how it enables users to meet the GST requirements and compliances. We hope the article has given you all the relevant information about how to activate GST in Tally

Tally users can also use the Biz Analyst application 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.

FAQs

Q: Who are the inventors of tally software?

Ans:

Tally software was invented by Shyam Sunder Goenka and Bharat Goenka under the company name, Tally Solutions.

Q: From where can the activation of GST in tally start?

Ans:

 The first step is to click on F11: Features or press function key F11 from the gateway of Tally.

Q: What are some of the benefits that tally provides in the case of GST to users?

Ans:

Tally ERP 9 enables the users to generate and record the GST invoices and transactions in the right manner. It also helps the users to file their returns on time as well as helps in the generation of e-Way bills.

Q: What do you mean by Tax Classification in Tally?

Ans:

GST classifications can be generated using GST information such as GST rate and HSN/SAC. Tax details of products or services will be recorded automatically if this is correctly used in the appropriate masters.

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