Activate GST for Composition Dealers

1. Open the company for which you need to activate GST.

2. Press F11 (Features)

3. Enable Goods and Services Tax (GST) – Yes.

4. The State field helps in identifying local and interstate transactions according to
the party’s state. If you change the state here, the company details will get
updated.

5. Set the Registration type as Composition.

6. Set the option Assessee of Other Territory to Yes, if your business unit in
located in the Exclusive Economic Zone (other territory).
7. Specify GST Applicable from date. GST composition will be applicable for your
transactions from this date onwards.
8. Specify the GSTIN/UIN for the business. This can be printed in the invoices as
required. You can specify this later.
9. Tax rate for taxable turnover appears as 1%. This rate is applied on your
transactions to arrive at the taxable value.

Note: If you are changing the registration type from regular to

composition, the applicability date of GST regular registration will be
retained. You can change the date as required.
10. Based on your business type, select the Basis for tax calculation. For outward
supplies, the total of taxable, exempt and nil rated will be considered as the
Taxable Value. For inward supplies, the total value of purchases made under
reverse charge will be considered as the Taxable Value.
1. Taxable, Exempt and Nil rated values – the tax will be calculated on the:
 Total of taxable, exempt and nil rated sales.
 Total of purchases attracting reverse charge.
2. Taxable – the tax will be calculated on the:

 Total of only the taxable sales.
 Total of purchases attracting reverse charge.
 Press Alt+W (Details): Tax Rate History to provide the history of Tax Rates
with the corresponding Applicable From date and Basis for Tax Calculation, as
shown in the following example:
11. The option e-Way Bill applicable is set to Yes, with the Applicable
from date and Threshold limit.
12. Select the value to be considered for e-Way Bill for the option Threshold limit
includes.
13. Set the option Applicable for intrastate to Yes, if it applies to your State and
enter the Threshold limit.
14. Set the option Enable tax rate for purchase (Includes purchases under reverse
charge) to:
o Yes, to enter the GST rate in the ledgers and stock items for calculating GST in
transactions.
 o No, to specify the GST rates in each transaction for calculating GST.

15. Press Enter to save.

You can record transactions using the ledgers with GST details, and print invoices
with GSTIN.

Create Stock Items and Ledgers

You can create the ledgers and stock items to record the transactions under the
composition scheme of GST.
 Stock Item
 Sales Ledger
 Purchase Ledger
 Party Ledger
 GST Ledger
 Expense or Income Ledger
 Discount – Stock Items
 Discount – Services

Stock Item
Use the stock items to maintain the details of each item handled in your business.
You can specify the tax rate for calculating the tax on purchase in the stock item.
1. Gateway of Tally > Create > type or select Stock Items.

2. Set/Alter GST Details – Yes to specify the details in the GST Details screen,
and save.

1. Taxability:
 Select Taxable, if it is taxable under GST.
 Select Exempt, if it is exempted from tax under GST.
 Select Nil Rated, if it attracts 0% tax rate under GST.
To view the history of tax rate changes, press Alt+L.
3. Select the Type of supply as Goods or Service. For a service, you can also use
ledger to maintain the service details.
4. Press Enter to accept.

Note: To modify the tax rates in alteration mode from a particular date,
press Alt+W and enter the applicable date with the new tax rate. You can
use these goods or services in purchase or sales invoice.

Sales Ledger
You need to create sales ledgers to use them in sales transactions.
1. Gateway of Tally > Create > Ledger > and press Enter.
Alternatively, press Alt+G (Go To) > Create Master >type or select Ledger >
and press Enter.

2. Select Sales Accounts from the List of Groups in the Under field.
3. Is GST Applicable – Applicable.
4. Set/alter GST Details – Yes.
5. Specify the details in the GST Details screen, and save.

1. Taxability:
 Select Taxable, if it is taxable under GST. The tax rate entered in
the Company GST Details screen is applied for calculating the tax liability on
the turnover.
 Select Exempt, if it is exempted from tax under GST.
 Select Nil Rated, if it attracts 0% tax rate under GST.
To view the history of tax rate changes, press Alt+L.
6. Select the Type of supply as:
o Services, if the ledger is used to record sale of service. By default the type of
supply is set to Services.
o Goods if the ledger is used to record sale of goods.Press Enter to accept.

Purchase Ledger
Use the purchase ledger for recording purchases. The GST rates defined in this
ledger is applied for:
 Calculating the liability on taxable purchases attracting reverse charge.
 Auto calculation of tax in the invoice for taxable purchases (that do not attract
reverse charge) from registered dealers.
Create purchase ledgers
1. Gateway of Tally > Create > Ledger > and press Enter.
Alternatively, press Alt+G (Go To) > Create Master >type or select Ledger >
 and press Enter.

2. Select Purchase Accounts, from the List of Groups in the Under field.
3. Is GST Applicable – Applicable.
4. Set/alter GST Details – Yes.
5. Specify the details in the GST Details screen, and save.

6. Taxability:
1. Select Taxable, if it is taxable under GST.
2. Select Exempt, if it is exempted from tax under GST.
3. Select Nil Rated, if it attracts 0% tax rate under GST.
To view the history of tax rate changes, press Alt+L.
7. Select the Type of supply as:
o Services, if the ledger is used to record purchase of service. By default the type
of supply is set to Services.
o Goods, if the ledger is used to record purchase of goods.
8. Accept the screen. As always, you can press Ctrl+A to save.

Party Ledger
Use party ledgers to maintain details of your parties.
 Open the ledger in alteration mode.
 Set the option Is GST Applicable? to Not Applicable, to consider it as a party
ledger.
Create supplier or customer ledgers
1. Gateway of Tally > Create > Ledger > and press Enter.
Alternatively, press Alt+G (Go To) > Create Master >type or select Ledger >
and press Enter.

2. Enter the Name of the supplier or customer.

3. In the Under field select:
o Sundry Creditors for supplier
o Sundry Debtor for customer
4. Set the option Maintain balances bill-by-bill to Yes.
5. Enter the Default credit period, if any.
6. Set the option Inventory values are affected to Yes, if required.
7. Select the party Registration type, and enter the GSTIN/UIN.
8. Enable the option Set/Alter GST Details? to open the GST Details screen.

oIf the party is an Assessee of Other Territory, set it to Yes.

oPress Enter to save.
9. Accept the screen. As always, you can press Ctrl+A to save.
Similarly, you can create the required party ledgers.

GST Ledgers
Use the GST ledgers to calculate:
 Tax in the purchase invoice for purchases from registered regular dealers.
 Tax liability on the sales turnover and liability for purchases under reverse charge.
Create central, state, or integrated tax ledgers and cess ledger
1. Gateway of Tally > Create > Ledger > and press Enter.
Alternatively, press Alt+G (Go To) > Create Master >type or select Ledger >
and press Enter.
2. In Under, select Direct Expenses, Purchase Accounts(Inventory values are
affected? – No) or Indirect Expenses.

3. Select the Type of Ledger.

4. Appropriate tax values in purchase invoice? – Yes to arrive at the purchase
cost based on the GST rates specified for each stock item.
5. Accept the screen. As always, you can press Ctrl+A to save.
Similarly, create ledgers for Central Tax, Integrated Tax or Cess.

Expense or Income Ledger

Use these ledgers for expenses or incomes which need to be shown in the invoice,
like packaging, delivery, and so on, that form part of the item or service value.
1. Gateway of Tally > Create > Ledger > and press Enter.
Alternatively, press Alt+G (Go To) > Create Master >type or select Ledger >
 and press Enter.

2. In the Under field, select:

o Direct Incomes/Indirect Incomes for income.
o Direct Expenses/Indirect Expenses for expenses.
3. Type of Ledger – Not Applicable.
4. Is GST Applicable? – Not Applicable.
5. Include in assessable value calculation for – GST.
6. Appropriate to:
1. Goods, for additional expenses or incomes on goods.
2. Services, for additional expenses or incomes on services.
7. Accept the screen. As always, you can press Ctrl+A to save.

Discount – Stock Items

Use this ledger to specify the discount for stock items based on value or quantity, in
your purchase and sales transactions.
1. Gateway of Tally > Create > Ledger > and press Enter.
Alternatively, press Alt+G (Go To) > Create Master >type or select Ledger >
 and press Enter.

2. In the Under field, select:

1. Direct Incomes/Indirect Incomes for income.
2. Direct Expenses/Indirect Expenses for expenses.
3. Set Type of Ledger to Discount.
4. Accept the screen. As always, you can press Ctrl+A to save.

Discount – Services
Use this ledger to specify the discount on services.
1. Gateway of Tally > Create > Ledger > and press Enter.
Alternatively, press Alt+G (Go To) > Create Master >type or select Ledger >
and press Enter.

2. Is GST Applicable – Not Applicable

3. Include in assessable value calculation for – GST
4. Appropriate to – Services.
 Tax Rate Setup – GST Composition
Quickly set up GST rates for your stock items, using the GST Rate Setup option.
Based on the rates defined, the tax amount is auto calculated in the purchase
invoice. These rates will not be considered for calculating the tax on sales.
You must enable GST in your company to provide the GST rates. You can also set the
GST rates for a particular price range or slab rate for multiple stock items.
Alternatively, you can define tax rate for each stock item from the stock item
master.
Set GST rates for stock items
1. Gateway of Tally > Display More Reports > Statutory Reports > GST
Reports > GST Rate Setup.
Alternatively, press Alt+G (Go To) >type or select GST Rate Setup > and
press Enter.

You can also navigate from Gateway of Tally > Tax Rate Setup > GST.
2. Select the stock item, and press Alt+S to provide the applicable tax rates. You can
press Spacebar to select multiple stock items. Set the tax rates and save.

o To view the history of tax rate changes, press Alt+L.

o To specify further GST-related details, press F12 (Configure.
In order to remove a tax rate, use the option Ctrl+C. You can clear rate of
multiple items by selecting them using Spacebar.