How to enable VAT in Tally ERP9?
Tally ERP9 has been updated VAT taxation based on state specific,also added some module like,
- Defining Tax Rate at Company Level.
- Defining Tax Rates at group Level and,
- Defining Tax Rate at Ledger or Item Level.
just because of the above reasons,the complexity in the learning of VAT in Tally ERP9 increased . We are following the third method ‘defining tax rate at ledger level or item level’ which is the traditional method.
Defining Tax Rate at Ledger or stock item Level.
The first step is to ensure that you have selected the right state; the state in which you are operating your business, In company creation screen.If you have already created company, we can alter it.
Gateway of Tally >>Alt+F3>> Company info >>Alter
As we are following Karnataka statute,select state ‘Karnataka’. Save after changes has been made.
Enabling VAT in Tally ERP9
Gate way of Tally >> F11 >>Statutory & Taxation
Enable Value Added Tax ( VAT )
Also Enable Set/alter VAT Details,a new screen will displayed after striking Enter Key,where you can Enter Vat Details.
Save main & sub screens.
Stock Item Creation
Create STOCK ITEM ‘Computer’.Tax rate is VAT @4%
Go to Gateway of Tally > Inventory Info. > Stock Items > Create.
Enter the stock details like name ,unit ,Under filed.
VAT Applicable : Applicable
set Alter Vat Details : Yes, You will have a new screen Tax/rate details.
Enter Vat Rate : 4%
Tax Type :Will set ‘Taxable’ automatically, Display ‘exempt’ if you enter no tax rate.
Press enter and save the current screen, then item creation screen.
Creating Supplier Ledger
To create a supplier or sundry creditor ledger Namely ‘Computer Solution’
Go to, Gateway of Tally > Accounts Info. > Ledgers > Create
Enter all creditors details as displayed below image.
Set/Alter VAT Details : Yes
Enter the VAT details of supplier as required in new window.
Type of Dealer : Regular
TIN: a valid TIN number.
Press enter ,then save the supplier Ledger.
Creating Customer Ledger
Create a party Ledger& name it “Computer Point”.If you don’t know refer our lesson how to create a ledger.
Gateway of Tally>>Accounts Info>>Ledger>>Create
Enter all customer details
Make Sure that the State is automatically Selected.
Set/Alter VAT details : Yes, In the new window enter the VAT details of the customer.
Enter , then save customer ledger creation screen.
Creating Purchase Ledger
To create a purchase Ledger
Go to Gateway of Tally > Accounts Info. > Ledgers > Create.
Enter all purchase ledger details
Set/Alter VAT Details : No
Creating sales Ledger
Go to Gateway of Tally > Accounts Info. > Ledgers > Create.
Create a separate ledger for posting 4% sale as ‘Sales @4%’
Set Alter Vat Details : Yes,In new window enter Tax rate 4%,Tax type automatically become “Taxable”.
You will be asked for an applicable date enter tax rate applicable date
Save the screen. save Sales Ledger.
Creating VAT Ledger
To create a VAT Ledger
Go to Gateway of Tally > Accounts Info. > Ledgers > Create.
Enter Name : VAT
Under: Duties & Taxes
Percentage of calculation :0
enter the rest of the details.
Save the VAT ledger.
Transaction for VAT calculation
Purchase Transaction.
Let’ Enter a Local Purchase Transaction
Purchased 10 Nos computer from computer solutions @ 25000/ pcs
To enter this transaction
Go to Gateway of Tally > Accounting Vouchers > F9: Purchases.
Provide the date of transaction,Supplier Invoice Number,Supplier name
Product Name,Quantity,Rate,
Then Enter vat ledger ,rate and tax amount will have automatically calculated.Refer below image.
In the bottom of voucher ,provided VAT Details,Set Yes
You will have a new form where you have to enter Additional details of purchase tax
- e-Sugam Number: On uploading the e-Sugam XML file generated from Tally.ERP 9 to Department website, a unique acknowledgement number gets generated. This number has to be entered here. If e-Sugam number is not entered here, cursor will skip the remaining fields of e-Sugam Details section.
Invoice Delivery Date: The invoice date is displayed here.
From Place: Enter the name of the place from where the goods are despatched.
To Place (Destination): Enter the name of the place where the goods are to be delivered.
Category of Transactions: The category of transactions listed for e-Sugam in the department website is displayed as list of VAT Category Type. Select the required category based on the nature of transaction.
Document Type: Select from the list of VAT Category Type. Based on the category of transaction selected, the Document Type gets populated. On selecting the following categories, two document types get displayed for selection. The required document needs to be selected here:
Save.
Sales transaction
Lets enter a local sales transaction.
Sold 5 Nos computer @ Rs 27000/Pcs +VAT 4% to ‘Computer Point’.
To enter this sales transaction .
Go to Gateway of Tally > Accounting Vouchers > F8: Sales.
Provide VAT details : Yes
Enter vat details as per requirements.
Enter and save the transaction.
VAT Reports
We have entered sample purchase and sales transaction, Now lets view the VAT Reports.
Go to Gateway of Tally >Display>Statutory Reports>Form VAT 100
In this report you can see the Assessable Value ,Tax amount and tax payable amount.here is a report.
VAT payable should be paid in the subsequent month. In this example May 2015.You can take printout of VAT Computation by pressing ALT+P using print button.you will get VAT computation report like this .
To make payment ,you have to submit VAT returns in prescribed forms, every state has its own forms and rules for VAT computation,submitting Return, and payment.
Gateway of Tally > Accounting Vouchers> F5 -Payment.
This will clear your VAT liability and the VAT Ledger becomes Zero.
