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THEORY AND PRACTICE OF GST

B.Com (OU) III-Year Vl-Semester

(^As Per the Latest 2016-17 Syllabus of B.Com (OU) (CBCsf)

Prepared by
SIA Team of Experts

Pub ishers & Distributors Pvt. Ltd.

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.Com (OU) 111-Year Vl-Semester

> Theory and Practice of GST

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.... . ar-bS I -304-(lll-VISEM-B-com-OU2019)

Preface
ABOUT THE SUBJECT
The subject “Theory and Practice of GST” is introduced to enable the students about the concept of
new tax regime i.e., Goods and Service Tax (GST) in India. This subject explains the concept and
calculation of GST with the help of Tally.ERP 9. The Concept of GST is introduced by the Indian
Government to eliminate the different or multiple taxes like VAT, Excise Tax, Service Tax etc. Currently
GST is the one single tax available for all types of goods and services which replaced all other tax
schemes. Thus, this subject will help the student to gain theoretical as well as practical knowledge of
GST scenario.

The important topics discussed in this subject are as follows,

❖ Introduction of GST and Taxes Subsumed Under GST.

❖ Registration process and Renovation of Registration under GST.

❖ Enabling GST under Tally.ERP 9.

❖ Defining GST Rate at Transaction Level.

❖ Calculation of GST for Goods and Services through Tally Software.

❖ Recording of Advanced Entries and Migration to ERP.

The main objective behind introducing the subject “Theory and Practice of GST” in B.Com course is
to make students acquire both theoretical and practical knowledge of the above mentioned topics.

ABOUT THE BOOK

The book entitled “Theory and Practice of GST” is designed for B.Com III-Year Vl-Semester students.
The content provided in this book is strictly as per the latest (2016-17) syllabus prescribed by Osmania
University.
f
Every concept is explained in a simple manner with sufficient number of examples so as to facilitate better
understanding and easy learning in a shorter span of time. Keeping in view the examination pattern of
B.Com students, this book provides the following features,

Important Questions are included to help students prepare for Internal and External Assessment.

Every unit is structured into two main sections viz., Short Questions (Part-A) and Essay Questions
(Part-B) with solutions.

❖ List of Important Definitions are given.

❖ Three Model Papers are provided in order to help students understand the paper pattern in the end
examination.

An attempt has been made through this book to present theoretical and practical knowledge of
“Theory and Practice of GST”. This book is especially prepared for undergraduate students.

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The table below illustrates the complete idea about the subject, which will be helpful to plan and score
good marks in the end examinations.

Unit No. Unit Name Unit Description

1. Introduction To GST This unit covers the topics: Introduction - GST - Taxes Subsumed under GST
- Determination ofTax - Registration - Process of Registration - Cancellation
and renovation of registration - Supply of Goods and Services - Transition to
GST - Registered Business - Availed Input Tax Credit - Unavailed CENVAT
credit and Input VAT on capital goods - Availing the input credit held in
closing stock - Invoicing - Tax Invoice - Bill of Supply - Credit Note, Debit
Note and Supplementary Invoice - Transportation of goods without issue of
Invoice - Input Credit Mechanism - Input Tax - GST Returns - Payment of Tax.
2. Getting Started with GST This unit covers the topics: Introduction - Enabling GST and Defining Tax
(Goods) Details -Transferring Input Tax credit to GST - intrastate Supply of Goods -
Intrastate Inward Supply - Intrastate Outward Supply - Interstate - Interstate
Outward Supply - Return of Goods - Purchase Returns - Sales Returns -
Supplies Inclusive of Tax - Defining Tax Rates at Master and Transaction
Levels - Defining GST Rates at Stock Group Level - Defining GST Rate at
Transaction Level - Hierarchy of Applying Tax Rate Details - Reports.
3. Recording Advanced This unit covers the topics: Introduction - Accounting of GST Transactions -
Entries, GST Adjustment Purchases from Composition Dealer - Purchases from Unregistered Dealers
and Return Filing - Exports - Imports - Exempted Goods - SEZ Sales - Advance Receipts and
Payments - Mixed Supply and Composite Supply under GST - Mixed Supply
of Goods - Composite Supply of Goods - GST Reports - Generating GSTR
- Report in ERP - Input Tax Credit Set Off- GST Tax Payment - Time Line
for Paj'ment of GST Tax - Modes of Payment - Challan Reconciliation -
Exporting GSTR - Return and Uploading in GST Portal.
4. Getting Started with GST This unit covers the topics: Introduction - Determination of Supply of Services
(Services) -Determining the Place of Supply of Services -Enabling GST and Defining
Tax Details - Transferring Input Tax credit to GST - Intrastate Supply of
Goods - Intrastate Inward Supply - Intrastate Outward Supply - Interstate
Supply - Interstate Outward Supply - Interstate Inward Supply - Interstate
Outward Supply of Services - Cancellation of Services - Cancellation of
Inward Supplies - Cancellation of Outward Supply of Services - Defining
Tax Rates at Master and Transaction Levels.
JL
5. Recording Advanced This unit covers the topics: Introduction - Accounting Multiple Services
Entries and Migration to in a Single Supply - Recording Partial Payment to Suppliers - Outward
ERP Supplies - Recording Outward Supply with Additional Expenses - Supply
of Services - Business to Consumers - Time of Supply of Services - Place
of Supply of Sendees - Determining Place of Supply of services - Exempt
Supply of Services under GST -Export Supply of Services - Reverse Charge
on Services under GST - Advance Receipts from Customers under GST -
Advance Receipt and Issuing Invoice on Same Month - Advance Receipt
and Issuing Invoice on Different Month - Reversal of GST on Account of
Cancellation of Advance Receipt - Generating GSTR- Report in ERP - Input
Tax Credit Set Off - Migration to ERP - Activate Goods and Services Tax
(GST) in ERP - Set up GST Rates - Update Masters - Update Party GSTIN/
UIN - Creation of GST Duty Ledgers.

It is sincerely hoped that this book will satisfy the expectations of students and at the same time helps
them to score maximum marks in exams.
Suggestions for improvement of the book from our esteemed readers will be highly appreciated and
incorporated in our forthcoming editions.

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i -ou*+-gii-viSEM-B-com-OU2019)

___________ —

Theory and Practice of GST

B.Com 111-Year Vl-Semester (OU)

CONTENTS
Syllabus (As per 2016-17 Curriculum)

List of Important Definitions L.1 L.1

UNIT-WISE SHORT & ESSAY TYPE QUESTIONS WITH SOLUTIONS

Unit No. Unit Name Question Nos. Page Nos.

Topic No. Topic Name

UNIT-I INTRODUCTION TO GST 1 -26

Part-A SHORT QUESTIONS WITH SOLUTIONS Q1 - Q8 2-4

Part-B ESSAY QUESTIONS WITH SOLUTIONS Q9 - Q29 5-22
1.1 Introduction - GST - Taxes Subsumed Under GST Q9 - Q10 5
1.2 Determination of Tax-Registration - Process of Registration Q11 Q13 6
1.3 Cancellation and Renovation of Registration Q14 8
1.4 Supply of Goods and Services Q15 - Q17 9
1.5 Transition to GST - Registered Business - Availed Input
Tax Credit - Unavailed CENVAT Credit and Input VAT on
•» Capital Goods -Availing the Input Credit held in Closing Stock Q18 12
1.6 Invoicing - Tax Invoice - Bill of Suplly Q19 13
1.6.1 Credit Note - Debit Note and
Supplementary Invoice Q20 - Q22 15
1.6.2 Transportation of Goods without Issue of Invoice Q23 17
Input Credit Mechanism Q24 18
1.7.1 Input Tax - Entitlement and Non-Entitlement Q25 - Q26 19
1.8 GST Returns Q27 - Q28 20
1.9 Payment of Tax Q29 22
INTERNAL ASSESSMENT 23-26
UNIT-II GETTING STARTED WITH GST (GOODS) 27-82

Part-A SHORT QUESTIONS WITH SOLUTIONS Q1 - Q6 28-29

Part-B ESSAY QUESTIONS WITH SOLUTIONS Q7 - Q22 30-78
2.1 Introduction - Enabling GST and Defining Tax Details Q7 30
2.2 Transferring Input Tax Credit to GST Q8 31
2.3 Intrastate Supply of Goods - Intrastate Inward Supply Q9 34
2.3.1 Intrastate Outward Supply Q10 40
2.4 Interstate Supply - Interstate Inward and Outward Supply Q11 - Q12 48

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2.5 Return of Goods Q13 57

2.5.1 Purchase Returns Q14 58
2.5.2 Sales Returns Q15 61
2.6 Supplies Inclusive of Tax Q16 63
2.7 Defining Tax Rates at Master and Transaction Levels -
Defining GST Rates at Stock, Group Level Q17 67
2.7.1 Defining GST Rate at Transaction Level Q18 73
2.7.2 Hierarchy of Applying Tax Rate Details Q19 75
2.8 Reports Q20 - Q22 76
INTERNAL ASSESSMENT 79 -82
UNIT-III RECORDING ADVANCED ENTRIES,
GST ADJUSTMENT AND RETURN FILING 83- 154
Part-A SHORT QUESTIONS WITH SOLUTIONS Q1 - Q7 84 -86
Part-B ESSAY QUESTIONS WITH SOLUTIONS Q8 - Q31 87- 151
3.1 Introduction - Accounting of GST Transactions Q8 87
3.2 Purchases from Composition Dealer Q9 88
3.3 Purchases from Unregistered Dealers Q10 91
3.4 Exports Q11 98
3.4.1 Exports Through LUT/Bond Q12 98
3.4.2 Exports Taxable Q13 100
3.5 Imports Q14 103
3.6 Exempted Goods Q15 - Q16 110
3.7 SEZ Sales Q17 114
3.8 Advance Receipts and Payments - Accounting Advance
Receipt and Sales Invoice in the Same Month Q18 117
3.8.1 Advance Receipt and Sales Invoice
Recorded in Different Months Q19 122
3.8.2 Reversal of GST on Account of Cancellation
of Advance Receipt Q20 128
3.8.3 Accounting of Advance Payment for Purchase
of Taxable Goods Under Reverse Charge Q21 129
3.9 Mixed Supply and Composite Supply Under GST Q22 134
3.9.1 Mixed Supply of Goods Q23 134
3.9.2 Composite Supply of Goods (129 - 138) Q24 138
3.10 GST Reports Generating GSTR Report in ERP Q25 142
3.11 Input Tax Credit Set Off Q26 143
3.12 GST Tax Payment - Time Line for Payment of
GST Tax - Modes of Payment - Challan Reconciliation Q27 - Q29 145
3.13 Exporting GSTR - Return and Uploading in GST Portal Q30 - Q31 150
INTERNAL ASSESSMENT 152 - 154
UNIT-IV GETTING STARTED WITH GST (SERVICES) 155- 202
Part-A SHORT QUESTIONS WITH SOLUTIONS Q1 - Q6 156 - 157
Part-B ESSAY QUESTIONS WITH SOLUTIONS Q7 - Q19 158 - 199
4.1 Introduction - Determination of Supply of Services -
Determining Place of Supply of Services Q7 158
4.2 Enabling GST and Defining Tax Details Q8 158
4.3 Transferring Input Tax Credit to GST Q9 161

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4.4 Intrastate Supply of Services - Intrastate Inward Supply Q10 165

4.4.1 Intrastate Outward Supply Q11 169
4.5 Inter-State Supply - Inter-State Inward Supply Q12 173
4.5.1 Interstate Outward Supply of Services Q13 179
4.6 Cancellation of Services Q14 183
4.6.1 Cancellation of Inward Supplies Q15 183
4.6.2 Partial Cancellation Q16 186
4.6.3 Cancellation of Outward Supply of Services Q17 - Q18 188
4.7 Defining Tax Rates at Master and Transaction Levels Q19 192
INTERNAL ASSESSMENT 200 - 202
UNIT-V RECORDING ADVANCED ENTRIES AND MIGRATION TO ERP 203 - 290
Part-A SHORT QUESTIONS WITH SOLUTIONS Q1 - Q7 204 - 206
Part-B ESSAY QUESTIONS WITH SOLUTIONS Q8 - Q35 207 - 287
5.1 Introduction to Recording of Advanced Entries Q8 207
5.2 Accounting Multiple Services in a Single Supply Q9 209
5.3 Recording Partial Payment to Suppliers Q10 217
5.4 Recording Outward Supply with Additional Expenses Q11 221
5.4.1 Supply of Services - Business To Consumers Q12 225
5.5 Time of Supply of Services Q13 228
5.6 Place of Supply of Services - Determining Place of
Supply of Services Q14 - Q16 232
5.7 Exempt Supply of Services under GST Q17 239
5.8 Export Supply of Services Q18 243
5.9 Reverse Charge on Services under GST Q19 - Q21 246
5.10 Advance Receipts from Customers under GST -
Advance Receipt and Issuing Invoice on Same Month Q22 261
5.10.1 Advance Receipts and Issuing Invoice on
Different Month Q23 266
5.10.2 Reversal of GST on Account of Cancellation
of Advance Receipt Q24 271
5.11 Generating GSTR-1 Report in Tally.ERP 9 Q25 273
5.12 Generating GSTR-2 Report in Tally. ERP 9 Q26 274
5.13 Input Tax Credit Set Off Q27 274
5.14 Challan Cancellation Q28 277
<5.15 Exporting GSTR-1 Return and Uploading in GST Portal Q29 278
5.16 Migration to ERP Q30 280
5.16.1 Activate Goods and Services Tax (GST) in ERP Q31 281
5.16.2 Setup GST Rates Q32 281
5.16.3 Update Masters Q33 282
5.16.4 Update Party GSTIN/UIN Q34 286
5.16.5 Creation of GST Duty Ledgers Q35 287
INTERNAL ASSESSMENT 288 - 290
> •f Ci -i I > ’
IMPORTANT QUESTIONS IQ.1 - IQ.2
r
MODEL QUESTION PAPERS WITH SOLUTIONS
)
Model Paper-I MP.1 - MP.1
8 Model Paper-II MP.2 - MP.2
8 Model Paper-Ill MP.3 - MP.3
1

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Syllabus
UNIT-I
INTRODUCTION TO GST
Introduction - GST - Taxes Subsumed under GST - Determination of Tax - Registration - Process of
Registration - Cancellation and Renovation of Registration - Supply of Goods and Services -Transition
to GST - Registered Business - Availed Input Tax Credit - Unavailed CENVAT Credit and Input VAT
on Capital Goods - Availing the Input Credit held in Closing Stock - Invoicing - Tax Invoice - Bill of
Supply - Credit Note, Debit Note and Supplementary Invoice - Transportation of goods without issue
of Invoice - Input Credit Mechanism - Input Tax - GST Returns - Payment of Tax.

UNIT-II
GETTING STARTED WITH GST
Introduction - Enabling GST and Defining Tax Details -Transferring Input Tax credit to GST - Intrastate
Supply of Goods - Intrastate Inward Supply - Intrastate Outward Supply - Interstate - Interstate Outward
Supply - Return of Goods - Purchase Returns - Sales Returns - Supplies Inclusive of Tax - Defining
Tax Rates at Master and Transaction Levels - Defining GST Rates at Stock Group Level - Defining
GST Rate at Transaction Level - Hierarchy of Applying Tax Rate Details - Reports.

UNIT-III
RECORDING ADVANCED ENTRIES, GST ADJUSTMENT AND RETURN FILING
Introduction - Accounting of GST Transactions - Purchases from Composition Dealer - Purchases from
Unregistered Dealers - Exports - Imports - Exempted Goods - SEZ Sales - Advance Receipts and
Payments - Mixed Supply and Composite Supply under GST - Mixed Supply of Goods - Composite
Supply of Goods - GST Reports - Generating GSTR - Report in ERP - Input Tax Credit Set Off - GST
Tax Payment - Time Line for Payment of GST Tax - Modes of Payment - Challan Reconciliation -
Exporting GSTR - Return and Uploading in GST Portal.

UNIT-IV
GETTING STARTED WITH GST (SERVICES)
Introduction - Determination of Supply of Services -Determining the Place of Supply of Services -
Enabling GST and Defining Tax Details - Transferring Input Tax Credit to GST - Intrastate Supply of
Goods - Intrastate Inward Supply - Intrastate Outward Supply - Interstate Supply - Interstate Outward
Supply - Interstate Inward Supply - Interstate Outward Supply of Services - Cancellation of Services
- Cancellation of Inward Supplies - Cancellation of Outward Supply of Services - Defining Tax Rates
at Master and Transaction Levels.

UNIT-V
RECORDING ADVANCED ENTRIES AND MIGRATION TO ERP
Introduction - Accounting Multiple Services in a Single Supply - Recording Partial Payment to Suppliers -
Outward Supplies - Recording Outward Supply with Additional Expenses - Supply of Services - Business
to Consumers - Time of Supply of Services - Place of Supply of Services - Determining Place of Supply of
services - Exempt Supply of Services under GST -Export Supply of Services - Reverse Charge on Services
under GST - Advance Receipts from Customers under GST - Advance Receipt and Issuing Invoice on
Same Month - Advance Receipt and Issuing Invoice on Different Month - Reversal of GST on Account of
Cancellation of Advance Receipt-Generating GSTR- Report in ERP - Input Tax Credit Set Off- Migration
to ERP - Activate Goods and Services Tax (GST) in ERP - Set up GST Rates - Update Masters - Update
Party GSTIN/UIN - Creation of GST Duty Ledgers.

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LIST OF IMPORTANT DEFINITIONS

UNIT -1 the country. In this transaction, the location of the

supplier is in one country and the location of recipient
1. The debit note is issued by the seller when the value of goods/services is in another country.
of goods or services supplied by him is increased. In
other words, it is issued incase of purchase returns 3. Imports can be defined as the goods which are
e., when goods are returned by a purchaser to seller/
i. purchased from another country. It refers to all
supplier for the purpose of purchase returns. inward supplies of goods from another country. In
case of imports, reverse charges are applicable. The
2. The credit note is issued by the seller when the recipient of goods is liable to pay integrated tax to
value of goods or services supplied by him has been the government.
reduced, decreases or revised. In other words, it is
also issued in case of sales return i.e., it is sent by UNIT - IV
the seller to the purchaser for the purpose of sales 1. The American marketing association defines services
return. as “services are the activities, benefits or satisfaction
3. Tax invoice is issued by the registered businesses which are offered for sale and provided in connection
or persons under GST for supplying taxable goods with the sale of goods”.
and services. 2. Intra-State Supply of Services refers to the transactions
4. Bill of supply is a invoice or document which shows in which the supplier of the services and the recipient
only the details oftransaction (sales) but not the details of the services belong to the same state or union
of taxes. territory. It means, the transaction takes place within
the same state.
UNIT - II 3. Inter-State Supply ofServices refers to the transactions
1. Intrastate supply of goods refers to the transactions in in which location of the supplier of the services is
which the supplier of the goods and the recipient of different from the location of the recipient of the
the goods belong to the same state or union territory. services.
2. Interstate supply of goods refers to the transactions 4. Cancellation of services may occurs when a company
in which location of the supplier of the goods is failed to provide the promised services to other company
different from the location of the recipient of goods or client.
or the location of supply.
UNIT - V
3. Return of Goods refers to return by the recipient of
1. The ‘Recording of Advanced Entries’ means
goods for various reasons. The goods are returned to
recording of various types of business transactions,
the supplier by customers due to damaged products,
multiple services in single voucher, recording of
wrong products or any other reason.
additional expenses of GST, export of services,
4. A GST report is a document consisting of summary transactions of sales services by professionals etc. It
of monthly quarterly or annual returns which includes includes all those entries or transactions which were
the details of all the inward and outward supplies non recorded or may be advanced in nature in Tally.
which are filed by a taxable individual registered ERP 9.
under GST.
2. In the day-to-day business activities a company deal s
UNIT - III with purchasing of goods and services. The payments
of purchase of services can be paid fully or partially
1. A dealers having an aggregate turnover of less than depending upon the terms and conditions. Therefore,
the recommended amount for purpose of registration the partial payment is the initial payment or half
under the GST are referred as Unregistered Dealers payment made by the Purchaser to the supplier.
(URDs). Tax invoices cannot be issued by unregistered
dealers. URDs cannot change tax or claim input tax 3. The process in which services are supplied or provided
credit. is referred as supply of services. The Schedule-II of
GST law provided the explanation and determination
Export can be defined as the supply of goods outside criterias for the type of supply of services which
the country. Goods are supplied to recipients outside would be applicable for service tax.
- SIA PUBLISHERS AND DISTRIBUTORS PVT. LTD.

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t\

1 INTRODUCTION TO GST
SIIA GROUP
\______ J

( "learning objectives )
After studying this unit, one would be able to understand,
❖ The Concept of GST.
❖ Taxes Subsumed Under GST and Determination of Tax.
❖ The Concept of Registration and the Process of Registration, Cancellation and Renovation of Registration
Under GST.
❖ The Supply of Goods and Services Under GST.
❖ Transition to GST and Registered Business.
❖ Availed Input Tax Credit and Unavailed CENVAT Credit.
❖ Input VAT on Capital Goods.
❖ Availing the Input Credit Held in Closing Stock.
❖ The Concept of Invoicing, Tax Invoice, Bill of Supply, Credit Note, Debit Note and Supplementary
Invoice.
❖ Transportation of Goods Without Issue of Invoice.
❖ The Concept of Input Credit Mechanism, Entitlement and Non Entitlement of Input Tax.
❖ GST Returns and its Various Forms.
The Concept of Payment of Tax.

(£ INTRODUCTION 3
GST is widely established and a complete tax that is imposed on goods and services utilized in an economy.
GST is primarily a tax on final consumption and is imposed at every level of production-distribution chain
with relevant setoff’s in regard of the tax remitted at early levels. GST is also defined as tax on goods and
services which is imposed at every point of sale or provision of service.
GST is also known as Value Added Tax (VAT) or Harmonized Sales Tax (HST) which was initially developed
by German economist in 18th century. He levied sales tax on the final price on goods charged to the consumer
but not on the cost of manufacturing or distribution. The tax is always a constant percentage of the final
price, irrespective of number of transactions the goods went through. In 1954, the tax was finally accepted
by finance. Maurice Laws, joint director of French Tax Authority, was the first person who introduced VAT
on 1 Oth April, 1954. For the first time tax was imposed on large businesses later on it extended to all business
sectors.

i WB
SIA PUBLISHERS AND DISTRIBUTORS PVT. LTD

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2 THEORY AND PRACTICE OF GST

PART-A
SHORT QUESTIONS WITH SOLUTIONS
C______________________________________————————/
Q1. What is GST?

Answer :

Goods and Services Tax (GST) is widely established and a complete tax that is imposed on goods and services utilized
in an economy. GST is primarily a tax on final consumption and is imposed at every level of production-distribution chain
with relevant setoff’s in regard of the tax remitted at early levels. GST is also defined as tax on goods and services which is
imposed at every point of sale or provision of service.

GST is also known as Value Added Tax (VAT) or Harmonized Sales Tax (HST) which was initially developed by
German economist in 18th century. He levied sales tax on the final price on goods charged to the consumer but not on the cost of
manufacturing or distribution. The tax is always a constant percentage of the final price, irrespective of number of transactions
the goods went through. In 1954, the tax was finally accepted by finance. Maurice Laws, joint director of French Tax Authority,
was the first person who introduced VAT on 10th April, 1954. For the first time tax was imposed on large businesses later on
it extended to all business sectors.

Q2. State the benefits of GST.

Answer : Model Paper-I, Q1

The benefits of GST are as follows,

1. It removes cascading effect of taxes throughout the supply chain by lowering the cost of carrying out business and
develops competitiveness in the economy.

2. It abolishes variety of taxes, rates, exemptions and exceptions.

3. It removes dual taxation of similar transaction.

4. It reduces the production cost.

5. It implements uniformity in taxes throughout the territory, irrespective of place of manufacture or distribution.

6. It delivers absolute surety and clarity of taxes.

It develops acceptance to tax throughout the economy.

S. It increases and develop progress of the company.

Q3. What are the determinants of place of supply of goods?

Answer : Model Paper-Ill, Q1

Following points determines the place of supply of goods,

The place where the goods are sent for delivery is the location of place of supply.

) The import of goods or services, goods manufactured by firms in the Special Economic Zone (SEZ) are considered
as interstate supplies.

ai) Installation or assembling in a place is treated as the place of supply,

<iv) When goods are taken on board at the time of carriage, the place of supply is the location of goods where they were
taken on board.

GST is charged at two places at the time of supply i.e., At the time of billing and at the time of shipping.
SIA PUBLISHERS AND DISTRIBUTORS PVT. LTD. ___ — -

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UNIT-1 : Introduction To GST 3

Q4. Explain the following under GST,
(i) Debit note.
(ii) Credit note.
Answer : Model Paper-Ill, Q2

(i) Debit Note

According to GST rules, a debit note is also called as supplementary invoice.
The debit note is issued by the seller when the value of goods or services supplied by him is increased. In other
words, it is issued incase of purchase returns i.e., when goods are returned by a purchaser to seller/supplier for the purpose
of purchase returns. Debit note consists of small explanation about the returned goods i.e., price, discount, tax charged etc.
However, when any purchaser is going to return goods to the supplier, he will prepare two debit notes. One will be sent to
the supplier and other will be kept with him. As the account of the seller is going to debited with the amount mentioned in
the debit note thats the reason why it is called as debit note.
(ii) Credit Note
The credit note is issued by the seller when the value of goods or services supplied by him has been reduced, decreases
or revised. In other words, it is also issued in case of sales return i.e., it is sent by the seller to the purchaser for the purpose
of sales return. Credit note consist of small explanation about the returned goods like price, discount, tax charged etc. As
the accounts of the returner is going to credited with the amount mentioned in the credit note thats the reason why it is
called as credit note.____________________________________________________________________________________
Q5. Distinguish between Tax Invoice and Bill of Supply.
Answer : Model Paper-ll, Q5

The differences between tax invoice and bill of supply is as follows,

Basis Tax Invoice Bill of Supply
1. Meaning Tax invoice is issued by the registered businesses Bill of supply is a invoice or document which
or persons under GST for supplying taxable goods shows only the details of transaction (sales) but
and services. not the details of taxes.
2. Nature It is a invoice of tax nature which includes product It is a invoice of non-tax nature which includes
as well as tax details. products details but not tax details.
3. Applicable It is applicable and issued for all types of taxable It is applicable and issued for all types of
sales. exempted or composition sales.
4. Taxes Under this, CGST, SGST, UTGST and IGST is to Under this, no such details are required.
shown separately.
5. Useful It is useful for both local or central sales transactions. It is useful for local sales in case of composition
dealer and in case of exempted sales.
------------
Q6. State the details of returns that a composition dealer need to furnish.
Answer :
The following table depicts the information of returns that a composition dealer need to furnish,
Return Time Description Frequency Due Date
1. Form GSTR-4 All outward supplies of goods and services, Quarterly 18th of following month
including auto-populated details from Form
GSTR-4A and tax payable details. Details of any
additions, modifications, or deletions in Form
GSTR-4A should also be submitted in Form
GSTR-4.
2. Form GSTR-4A Auto-populated details of the inward supplies Quarterly
made available to the recipient registered under
the composition scheme, on the basis of the FORM
GSTR-1 furnished by the supplier.
3. Form GSTR-9A Consolidated details of the quarterly returns filed Annual 31st Dec of next Fisca l
along with tax payment details. Year

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4 THEORY AND PRACTICE OF GST

Q7. What do you mean by the input tax credit mechanism?
Answer :

Input Tax Credit (ITC) is considered as the backbone of GST. It claims the GST credit paid on purchase of goods
and services which are used for the furtherance of business. It includes the tax payable under reverse charge. A registered
person is eligible to avail ITC subjected to conditions prescribed.
One of the main advantage of implementing GST Act is that it has a continuous flow of input credit from the
manufacturer to the consumer across the country. The input tax can be availed by every registered taxable person on all
the inputs that are involved for the furtherance of the business.
Following are the circumstances in which input tax credit is allowed under GST,
(i) Only a registered person is liable to claim the benefits of ITC of GST.
(ii) ITC is allowed only on the part of goods/services used by the business.
(iii) It is not allowed for the personal use of goods and services.
(iv) It is availed on the part used for making taxable and zero rated supplies.
(v) Input tax is not allowed on goods/services used for exempt supplies.
Q8. Explain the payment modes of tax under GST.
Answer :

The payment of tax involves two modes of payment. They are,

(i) Online mode
(ii) Offline mode.
(i) Online Mode
The online mode of payment of tax involve,
(a) Payment through internet banking by authorized banks.
(b) Credit or Debit card which are to be registered prior in the common portal.
(c) National Electronic Fund Transfer (NEFT) and Real Time Gross Settlement (RTGS) from any bank.
(ii) Offline Mode
The offline mode of payment of tax involve payment through,
(a) Cash up to ? 10,000 per challan per tax period.
f
< b) Cheque or Demand Draft (DD) by depositing through Over the Counter Payment (OTC).

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UNIT-1 : Introduction To GST 5

1.1 INTRODUCTION - GST - TAXES SUBSUMED UNDER GST

Q9. Define GST. Explain its origin and important concepts.
Answer : Model Paper-I, Q9(a)

Goods and Services Tax [GST]

GST is widely established and a complete tax that is imposed on goods and services utilized in an economy. GST is
primarily a tax on final consumption and is imposed at every level of production-distribution chain with relevant setoff’s
in regard of the tax remitted at early levels. GST is also defined as tax on goods and services which is imposed at every point
of sale or provision of service.
Origin
GST is also known as Value Added Tax (VAT) or Harmonized Sales Tax (HST) which was initially developed by
German economist in 18th century. He levied sales tax on the final price on goods charged to the consumer but not on the cost of
manufacturing or distribution. The tax is always a constant percentage of the final price, irrespective of number of transactions
the goods went through. In 1954, the tax was finally accepted by finance. Maurice Laws, joint director of French Tax Authority,
was the first person who introduced VAT on 10th April, 1954. For the first time tax was imposed on large businesses later on
it extended to all business sectors.
The end consumers of products and services cannot recover VAT on purchases, but it is possible for businesses to
recover VAT on the material and services that are brought to perform further supplies or services directly or indirectly
which are sold to the final consumers. Value-Added Tax is introduced because very high sales taxes and tariff’s leads to
smuggling and cheating.
VAT avoids cascade effect of sales tax only by imposing the tax on production at each level. It has been obtaining
benefits in worldwide over traditional sales taxes. Essentially, VAT is applied to all commercial activities including the
distribution and production of goods and services. It is evaluated and collected on the value added to goods in every business
transaction. Here, the government levied tax on the gross margin of each transaction.
Important Concepts of GST
The important concepts of GST are taxable event, supply and service,
1. ^Taxable Event
It is that on occurrence of which the charge is constant and creates or attracts the tax liability. This liability cannot
be resulted at anytime earlier or later point of time. If taxable event occurs to be at a specified point of time, the levy and
collection of that tax is postponed to later date for management’s advantage.
If the liability to pay tax arises and liability to pay tax arises by the occurrence of taxable event then tax becomes
payable and it can be levied only on taxable event. But, in seventh schedule to constitution, all taxable events are noi
considered in the legislative entries.
Example : Supply of goods and services.
GST means a tax that is imposed on supply of goods or services or both except on alcoholic liquor for consumption!
of human. Hence, branch transfers and stock transfers are also considered in net GST.
2. Supply
Supply is that which can be supplied or provided, the available collection of goods required or demanded with an!
amount adequate for a given purpose or use. “Consideration” is not needed for supply. Free supply of goods and service-
are liable to GST. In addition, there is no requirement for two legal entities. The goods or services are supplied from ore I
branch to another branch.
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6 THEORY AND PRACTICE OF GST

3. Service State Goods and Service Tax (SGST)
It means the activity which is performed by an State Goods and Service Tax is also known as SGST
individual for remuneration and involves a declared service. It is levied while dispensing the goods and services within
It should not involve,
the state. The taxes that are subsumed under SGST are,
(a) An activity which amounts to only,
(i) Value Added Tax
(i) Transfer of title in goods or services or
immovable property in the manner of sales, gift (ii) Purchase Tax
or in any other way.
(iii) Luxury Tax
(ii) A transaction in monetary or actionable claim.
(iv) Entry Tax
s (b) A service that is provided to the employer by any
s employee with respect to the employment. (v) Entertainment Tax
It (c) The fee collected in any court or tribunal initiated (vi) Taxes on Advertisements.
under the law for the time being in force.
integrated Goods and Service Tax (IGST)
Q10. State the various taxes subsumed under GST.
Answer : Integrated Goods and Service Tax is also known as
•y IGST. It is levied on goods and services in the course of
of The former tax regime in India consisted of numerous supply between the states or union territories or between the
IS taxes such as Excise Duties, Value Added Tax or Central states and union territory and viceversa. Central Sales Tax
ty> Sales Tax, Service Tax, Entry Tax and Octroi. All these taxes is replaced by IGST.
an will be substituted with the following taxes under GST,
Countervailing duty and special additional duty is
replaced by IGST in case of imports and other taxes which
to come underneath customs will be the same eventhough GST
tly rollout. The person importing services have to pay IGST on
to reverse charge basis. IGST has to be paid on export of goods.
Union Territory - Goods and Service Tax (UT GST)
ing Union Territory Goods and Service Tax is also known
the as UT GST. It is levied in the course of supply of goods
tess and services within or between the union territories. The
government has made a clause that this act need no amendent
even if a new union territory is formed in future.
GST Cess
A new tax is imposed on selected goods like Pan
Figure: Various Taxes Under GST masala, Tobacco products, Coal, aerated waters etc under
nnot Central Goods and Service Tax (CGST) GST which is charged on rate basis on the transaction value.
Central Goods and Service Tax is also known as On coal and solid fuels, it is imposed on per ton basis. The
and
government informs the list of goods which come under cess
CGST. It is levied in the course of supply of goods and
from time to time based on the advice of the GST council.
services in the states and union territories. The taxes which
antes Cess is imposed to recompensate the states in case of revenue
are subsumed under CGST are as follows, loss while adopting GST for the first five years.
e not
(i) Central Excise Duty
1.2 DETERMINATION OF TAX-REGISTRATION
(ii) Service Tax
- PROCESS OF REGISTRATION
(iii) Additional Duties of Customs (ADC)
iption QTI. Write briefly on determination of TAX under
i iv) Special Additional Duty of Customs (SAD) GST.
<v) Duties of Excise (Medicinal and Toilet Preparations) Answer :
(Vi) Additional Duties of Excise (Goods of Special
ith ar Before the GST, the structure of indirect taxes was
Importance) origin (production) based. This means, the tax is levied where
raiees
(vii) Additional Duties of Excise (Textiles and Textile goods or services are produced.
nt one
Products) In other words, the state where the supplier is situated
-.iii) Cesses and Surcharges. will get the revenue which is collected in the form of tax.
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UNIT-1 : Introduction To GST 7

Example Mandatory Registration
Sam traders from Goa supplies goods worth of Registration is mandatory for the people of the
? 1,00,000 to Nelson Trading Ltd based in Kerala. The tax following category irrespective of their turnover, ■
revenue will be collected by Goa as Sam traders is located
(i) Sellers on E-commerce platforms.
in Goa.
Under GST, the tax structure is destination (ii) E-commerce operators.
(consumption) based. The tax is levied on where goods (iii) Casual and non-resident taxable persons.
or services are consumed or supplied. The state where the
(iv) Persons involved in taxable and interstate supply.
goods or services are consumed will get the revenue which
is collected in the form of tax. (v) Businesses liable to pay tax under reverse charge.
Example (vi) Persons responsible to deduct TDS (Govt.
Sam traders from Goa supplies goods worth of Departments)
? 1,00,000 to nelson trading Ltd based in Kerala. The tax (vii) Person supplying online information and database
revenue will be collected by Kerala as nelson trading Ltd is access or retrieval services from abroad to an
located in Kerala. unregistered person in India.
Q12. Explain the concept of registration under GST.
(viii) Agents supplying on the name of taxable persons.
Answer : Model Paper-Ill, Q9(a)
(ix) Input service distributors.
Registration
Q13. Explain the process of Registration Under GST.
In GST taxation system all businesses are bring
together under ‘one tax’ i.e., GST. It results in consolidate Answer :
tax registration of all business firms where it eliminates the The process of registration under GST is followed for,
structure of old taxation system. In old taxation system,
separate registration is provided on the basis of nature of (i) Existing dealers
the business. (ii) New dealers.
Example Registration Process for Existing Dealers
TIN is alloted to businesses registered under VAT
Existing dealers registered under the existing indirect
where service tax registration numbers are alloted to service
TAX System such as VAT, Central Excise and Service Tax
providers.
is eligible for the provisional registration of GST. The final
Structure of GSTIN registration is granted when the required documents and
A business which is registered under the GST law details are submitted.
is approved by the Indian Government as a supplier of
The following process highlights the registration
goods and services. The input tax credit is permitted only
process for existing dealers.
to registered businesses. Each business is assigned after
registration with a unique 15 digit PAN registration number.
This number is known as the GST Identification Number
(GSTIN).
State Code PAN
Entity Left Check Figure: Registration Process of Existing Dealers
Code Bank Digit
1 1 2 3 I 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 13 14 15 (i) Submission of Details
Figure: Structure of GSTIN Number Dealers who are registered under existing law have
Businesses which include a defined annual aggregate to submit their,
turnover threshold are liable to register under GST. The PAN
aggregate turnover threshold involves the value of all taxable, A
Mobile Number
exempt and export supplies in India. Special category states
such as Arunachal Pradesh, Assam, Manipur, Meghalaya, ❖ E-Mail ID.
Mizoram, Nagaland, Sikkin, Tripura, Himachal pradesh and These details are registered in the common port;
Uttarakhand the annual aggregate turnover threshold should where the details entered are then verified.
be ? 10 lakh and for the rest of India it should be ? 20 lakh.
This indicates that a dealer should register under GST if he (ii) Provisional Certificate of Registration
crosses ? 10 lakh/20 lakh turnover threshold on a specific The dealer will be assigned with a provision,
day. Thus, the dealer can charge GST and also liable to claim certificate of registration in Form GST REG-25 after tl
input tax credit. registration.
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8 THEORY AND PRACTICE OF GST

(iii) Submission of GST REG-24 (v) Form GST REG-03/Form GST REG-04
Dealers are prescribed to submit Form GST REG-24 Form GST REG-03 is issued when there is a need of
within there months in the GST portal including the required additional information. Acknowledgement is to be provided
information and documents. with the information required within seven working days
(iv) Final Registration Certificate from the date of receipt of form GST REG-03.

The accurate and satisfactory information provided (vi) Certificate of Registration

lead to issue of final registration certificate in Form GST If Form GST REG-01 or Form GST REG-04 is
REG-06. provided with all required information, then within three
Registration Process for New Dealers days from the date of receipt of Form GST REG-01 or Form
GST REG-04, a certificate of registration is issued in Form
The GST law provides an option for businesses to. GST REG-04.
voluntarily register under GST irrespective of their turnover
i.e (aggregate turnover of a dealer as ? 10 lakh/20 for cost Incase, if the submitted details are not satisfactory,
registration). then the application of registration is rejected using Form
GST REG-05.
The following process highlights the registration
process for new dealers: 1.3 CANCELLATION AND RENOVATION OF
REGISTRATION
Q14. Explain about the Amendment, Cancellation
and Renovation/Revocation of registration.
Answer :

Amendment of Registration
Amendment of registration is made due to the
following reasons,
(i) When there is any change in details provided at the
t time of registration in Form GST REG-01 or Form
i GST REG-07 or Form GST REG-09 or Form GST
1 REG-10 is to be submitted within 15 days from the
d date specified in Form GST REG-13.
(ii) Modification of details such as change in name of
n the business, managing committee and so on needs
an aproval Form an officer.
Figure: Registration Process for New Dealers (iii) After the approval from the officer, the modification
are sent in Form REG-14.
(i) PART-A GST REG-01
The Part-A of the Form GST REG-01 is to be filled (iv) Incase of changes in the details of business such
with the details of PAN, Mobile number and e-mail address. as change in PAN number of the registered tax
Then submit the form. payer, then New registration is to made in Form
GST REG-01.
ve (ii) Verification
Cancellation of Registration
The provided PAN number is verified on the GST
portal while the mobile number and e-mail address are Following points depicts the process for cancellation
verified by One Time Passwords (OTP). of registration,

(iii) Application Reference Number (i) For cancellation of registration, a registered taxable
person should submit the application in Form GST
rial An application reference number is send to the REG-14 including appropriate details regarding
registered mobile number and e-mail. closing stock, shifting of business etc.
(iv) PART-B GST REG-01
(ii) The acknowledged application will be reviewed by
>nal The PART-B of Form GST REG-01 is to be filled an officer and issues a notice in Form GST REG-15
the with the application reference number and submit the form inorder to obtain the reasons behind the cancellation
along with other required documents. which in a period of 7 days.
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UNIT-1 : Introduction To GST 9

(iii) After obtaining the reasons for cancellation of (i) Supplies Without Consideration
registration, the cancellation order will be verified Following activities are to be treated as supply even
and approved by the officer in Form GST REG-16 if made without consideration’
within a period of 30 days from the date of receipt of
Form GST REG-15. (a) Permanent transfer or disposal of business assets
where input tax credit has been availed on such assets.
Incase, if a taxable person voluntarily registered
(b) Import of services,
under GST, he is liable for cancellation of registration only
after completing one year of registration. His application for ❖ In the course or
cancellation of registration is to be approved by the officer ❖ For furtherance of business
after checking the clearance over the tax and penalty to pay
❖ By a taxable person from a related person or
by the taxable person.
❖ From any of his other establishments abroad.
Renovation/Revocation of Registration
(c) Goods supplying between principal and his agent
Following points highlights the revocation of
(d) Goods or services supplying between allied person
registration,
and different persons.
(i) If an officer cancel the registration, the taxable
(ii) Supplies Made for a Consideration for
person is liable for applying revocation of cancelled
Furtherance or During a Course of Business
registration in Form GST REG-17 within the period
of 30 days from the date of cancellation order. Supplies Made for a consideration for furtherance or
during a course of business is explained as below.
(ii) Form GST REG-3 provides addition details for an
officer if required within 3 working days. (a) Sale
Sale/Transfer of the property in goods and services
(iii) The taxable person has to reply by providing
as transfer of title for goods and transfer of right to
additional details in Form GST REG-4 within 7
use for services.
working days.
(b) Transfer
(iv) The officer revokes the cancellation if the data
provided is satisfactory. Revocation is made by Any transfer of goods or undivided share in goods
issuing an order in Form GST REG-18 within 30 days within branches as a part of supply are taxable.
of the date of cancellation order. (c) Barter/Exchange
(v) Incase if the provided data is unsatisfactory, then Exchanging of one commodity for another instead of
the officer issues a show cause notice in Form GST money.
REG-19. Example
1.4 SUPPLY OF GOODS AND SERVICES Two persons A and B who has textile business and
manufacturing of machinery business exchanges their
Q15 /Explain supply of goods and services under commodity instead of money.
GST.
(d) License
Answer :
It is referred to permission granted by competent
Supply is that which can be supplied or provided, the authority inorder to exercise specific concession.
available collection of goods required or demanded with an Without any grant of license, the activity is constituted
amount adequate for a given purpose or use. It includes all as an illegal act.
forms of goods and services, supplied or to be supplied for (e) Rental
a consideration in the course of a business.
Under GST, a periodical payment for renting fully or
Following are the types of supplies provided in partially of another property.
the law that are to be recognized as supply even without
(f) Lease
consideration. They are,
Lease is a legal agreement between two parties for a
(i) Supplies without consideration. limited period of time, subjected to various conditions I
(ii) Supplies made for a consideration for furtherance or under GST.
during a course of business. Disposal
(iii) Supplies made for a consideration not furtherance or Distribution of assets related to business comes under
during the course of business. the part of supply in GST.
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10 THEORY AND PRACTICE OF GST

(iii) Supplies Made for a Consideration not 1. Place of Supply
Furtherance or During the Course of Business
Place of supply plays a significant role in GST
Services imported for a consideration for the taxataion system. It determines the right tax to be charged
furtherance of business or during the course of business is
on the invoice. While considering the taxes based on place
treated as taxable supply. It indicates that one is liable to pay
GST though the services are carried either for a consideration of supply, two key aspects are involved during levying
or for business purpose or personal use. taxes. They are,
Q16. Explain how place of supply of goods and (i) Place of supplier
services are determined.
(ii) Place of supply.
Answer :
Determining the Place of Supply of Goods (i) Place of Supplier

Following points determines the place of supply of The location of the supply and the place of supplier
goods, are to be same. It is considered as intra-state
(i) The place where the goods are sent for delivery is transaction where GST is applicable as CGST +
the location of place of supply. SGST.
or (ii) The import of goods or services, goods manufactured Example: Place of supplier and location of supply
5S by firms in the special economic zone (SEZ) are
is Maharastra.
considered as interstate supplies.
or
(iii) Installation or assembling in a place is treated as the (ii) Place of Supply
place of supply.
The location of the supply and the place of supplier
:es (iv) When goods are taken on board at the time of are of two different states. It is considered as inter
. to carriage, the place of supply is the location of goods state transaction where GST is applicable as IGST
where they were taken on board. (Integrated Tax).
(v) GST is charged at two places at the time of supply
i.e., at the time of billing and at the time of shipping. Example: Place of supplier is Maharastra and
□ds location of supply is New Delhi.
Determining the Place of Supply of Services
Following points determines the place of supply of The place of supply consists of,
services,
J of (a) Place of supply of goods
(i) When the place of supply of services and the
location of the supplier are same, then it is treated as (b) Place of supply for services.
intrastate supplies where it includes Central Tax and
(a) Place of Supply of Goods
and State Tax.
heir The place of supply of goods is the place where
(ii) In case when the services are rendered to a registered
person outside the state, then it is treated as interstate the ownership of goods changes.
_____ supplies and it involves Integrated Tax (IGST).
(b) Place of Supply for Services
lent Q17. Discuss in detail the concepts of supply of
lion, goods and services under GST. The location of the service receipt is considered
uted as the place of supply of services. The services
Answer :
are supplied to both registered and unregistered
There are three importance concepts of supply of
dealers.
goods and services under GST.
ly or
2. Time of Supply

The Point in time (Taxation) when tax is required

to pay for goods/services are considered as time of supply.
for a
itions When the seller knows the time of supply then it assists in
identifying the due date for payment of taxes.

The point of taxation differ for each of the tax type

under Figure: Concepts of Supply of Goods and Services under the old taxation system.
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UNIT-1 : Introduction To GST 11

Figure: Point of Taxation Under Old Taxation System

The time of supply is explained under,
(i) Time of supply of goods
(ii) Time of supply of services
(iii) Time of supply under reverse change.
(i) Time of Supply of Goods
The time supply of goods is earliest of,
(a) Date of receipt of payment
(b) Date of issue of invoice
(c) Last date of issue of invoice.
(ii) Time of Supply of Services
The time of supply of services is earliest of,
(a) Date of recipt of payment
(b) Date of issue of invoice
(c) Date of provision of services.
(iii) ^Time of Supply Under Reverse Change
Incase of the time of supply under reverse charge, the time of supply for service reciver is the earliest of,
(a) Date of payment
(b) Date of issue of invoice for goods is 30 days and for services it is 60 days.
3. Value of Supply
The money/value that a seller would want to acquire from the goods and services supplied is termed as value of
supply. The goods and services are taxable based on the various metric of old Indian taxation system. They are calculated
in different ways as shown below.
(i) Excise Tax
The excise tax is determined on the basis of transaction value or quality of goods or MRP.
(ii) VAT Tax
The VAT Tax is determined on the basis of sale value.
(iii) Service Tax
The service tax is determined on the basis of taxable value of the service rendered.
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12 THEORY AfilD PRACTICE OF GST

1.5 TRANSITION TO GST - REGISTERED BUSINESS - AVAILED INPUT TAX CREDIT - UNAVAILED
CENVAT CREDIT AND INPUT VAT ON CAPITAL GOODS - AVAILING THE INPUT CREDIT
HELD IN CLOSING STOCK
Q18. Explain the transition to GST.
Answer : Model Paper-Ill, Q9(b)

Transition to GST
The process of shifting or registering the business from existing laws to GST is referred as transition to GST. As the
GST is the multi-stage value added tax imposed by the Indian government on consumption of goods as well as services,
so it is compulsory for every registered businesses to move on their transaction through transition to GST. As per the
provisions of GST law every business (goods or services) is required to accept the transition provisions of GST.
The purpose behind the introduction of GST is to Consolidate the multiple taxes of India into one tax regime. According
to the provisions of transition to GST, it should be ensured that the benefits obtained from the existing tax laws should not
be eliminated by transition to GST. Therefore, the process of transition from old tax laws to GST should be smooth and
hassle-free.
Provisions of Transition to GST
Some of the major provisions of transition to GST are as follows,
1. Provisions for Registered Business
The provisions of transition to GST are directly connected with the registered businesses in India.
According to the provision, every person or business who is registered under any existing tax law (i.e., central excise
VAT and service tax) is liable to follow transition process of GST. They need to get registered under GST law for operating
their business transactions. Some of the persons who are eligible for transition to GST are listed below,
(i) Registered dealer who was unregistered under previous law.
(ii) Registered dealer who was engaged in the manufacturing of exempted goods or exempted services.
(iii) Registered dealer who was providing contract services and availing abatement.
(iv) First or second stage dealer.
■ (v) Registered importer.
2. Availed Input Tax Credit (ITC)
According to the provisions of transition to GST, their should be smooth transition of Input Tax Credit (ITC)
available under other existing tax laws like VAT, Excise Duty or Service Tax to GST. It states that, a registered dealer
seeking composition tax scheme will not be eligible to carry forward the Input Tax Credit (ITC) available under previous
tax schemes. However, the ITC of various taxes under existing laws CENVAT credit, VAT etc, can be carried forward in
the following manner,
(a) Closing Balance of Credit in the Last Returns
In electronic credit ledger, the closing balance of the CENVAT credit or VAT in the last returns which were filed
under existing laws can be taken as credit. However, that credit would be available only if the returns for the previous
six months have been filed under existing laws. Therefore, the credit can be claimed by using a declaration form
‘GST-TRAN-1 ’ which is required to be furnished on the common portal within 90 days from the appointment day
;d I i.e., 1st July 2017.
I b) Unavailed CENVAT Credit and Input VAT on Capital Goods
Under central excise, the CENVAT credit should be availed in the current year to the extent of 50% and remaining
percent should be availed in the subsequent year.
In case of input VAT on capital goods, the VAT paid on purchase of capital goods will not be available completely
as input VAT. However, the input VAT can be availed in installments which would be divided into various financial
years. It can also be availed as a credit after commencement of commercial production.
As there are restrictions on availing CENVAT credit on capital goods, there would be some pending or unavailed
CENVAT and input VAT on the date of transitioning to GST.
TD. SIA PUBLISHERS AND DISTRIBUTORS PVT. LTD. ----- -------- ' , _____

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UNIT-1 : Introduction To GST 13

In such situation, the unavailed CENVAT credit and
Invoices Under GST
input VAT credit will be allowed to cany forward after
satisfying two conditions. They are as follows,
(i) It will be allowed as credit, if the old statute permits.
(ii) It will be allowed as credit, if it is admissible as input ( Tax Invoice ) ( Bill of Supply)
tax credit in GST.
Figure: Types of Invoices Under GST
3. Availing the Input Tax Credit held in Closing
Stock 1. Tax Invoice

The input tax credit held in closing stock can be As per the GST rules the businesses which are
availed if the following condition are satisfied, registered under GST must issue a tax invoice for all sales
transactions including tax details. In simple terms a tax
(i) If the closing stock is available in the form of raw invoice is issued by the registered business or persons under
materials, semi-finished goods or finished goods and GST for supplying taxable goods and services tax invoice
it must be used for taxable supplies. can be used or issued for availing Input Tax Credit (ITC).
(ii) If the benefit of input tax credit is passed through The basic or compulsory information to be showned
reduced price to recipient or by offering reduced under tax invoice documents is listed below,
prices to recipient.
(a) Name, address and GSTIN of the supplier.
(iii) If the payer paid the tax regularly. (b) A consecutive serial number not exceeding sixteen
(iv) If the person eligible for input tax credit invoices or characters, in one or multiple series, containing
any other prescribed tax documents related to closing alphabets or numerals or special characters hyphen
stock of inputs i.e., semi-finished goods and finished or dash and slash.
goods. However, if documents are not available, only (c) Date of its issue.
40% of credit will be allowed to that person or dealer.
(d) Name, address and GSTIN or UIN, if registered, of
(v) If the documents or invoices avai lable with the dealer the recipient.
are within 12 months from the date of transitioning
(e) Name and address of the recipient and the address of
to GST. delivery, along with the name of State and its code, if
1.6 INVOICING - TAX INVOICE - BILL OF such recipients is un-registered and where the value
SUPLLY ___ ___ __________ of taxable supply is fifty thousand rupees or more.
(f) HSN code of goods or Accounting Code of services.
Q19. Write in detail about Invoicing in GST.
(g) Description of goods or services.
Answer : Model Paper-I, Q9(b)
(h) Quantify in case of goods and unit or Unique Quantity
Invoice Code thereof.
The document sent by the seller to the buyer including (i) Total value of supply of goods or services or both.
all the details of the product or service (i.e., price, quantity G) Taxable value of supply of goods or services or both
etc) sold by the seller to buyer is known as invoice. It is a taking into account discount or abatement, if any.
document which is considered as the bill and indicates what
(k) Rate of tax (central tax, state tax, integrated tax, union
need to be paid by the buyer to the seller.
territory tax or cess).
Invoicing (l) Amount of tax charged in respect of taxable goods or
The process of preparing and sending an invoice services (central tax, state tax, integrated tax, union!
to the buyer by the seller with including all the details of territory tax or cess).
the product or service sold in one document is referred as (m) Place of supply along with the name of state, in|
invoicing. The process of invoicing plays very important case of a supply in the course of inter-state trade at
role in tax compliance for every business. Therefore, as per commerce.
the GST rules every business should acquire the information Address of delivery where the same is different fro:
(n)
regarding the process of invoicing. the place of supply. ■
Types of Invoices/lnvoicing Under GST (o) Whether the tax is payable on reverse charge basis I
There are two types of invoices issued under GST (p) Signature or digital signature of the supplier or hl
regime. They are as follows, authorized representative.
SNA PUBLISHERS AND DISTRIBUTORS PVT. LT|

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14 THEORY AND PRACTICE OF GST

Format of Tax Invoice
The format or structure of the ‘Tax Invoice’ as per the GST rules is as follows,
TAX INVOICE
Name of Supplier: Invoice No.
Address: Date
Email id: Tax payable under Reverse Charge (Yes/No)
GSTIN: Mode of Transportation
Place of Supply:
Details of Receiver (Billed to) Details of Consignee (shipped to)
Name Name
Address Address
State State
State Code State Code
GSTIN: GSTIN:
Rate
HSN/ per Taxable
Description of Accounting item Total Discount Value CGST SGST/UTGST IGST
S No. Goods/Services Code Qtv Unit (RsJ (Rs.) (Rs.) (Rs.) Rate Rs. Rate Rs. Rate Rs. Total (Rs.)

■'
-

Total Invoice Value

Declaration: Freight Charges
The particulars given above are true and correct Loading charges
Packing Charges
Insurance Charges
Other Charges
(Value in Words) Total Amount
Terms & Conditions For M/s

(Authorized Signatory)

2. Bill of Supply

The document which shows only the details of transaction (sales) and not the details of tax percentages or amount
is referred as bill of supply. It is also one of the type of invoice as per GST rules but it should not contain any tax details.
The bill of supply invoice is issued in two cases which are listed below,

i i) In case of exempted sales in GST i.e., sale of tax free goods in GST.
ii) In ca£e of sales by composition dealer in GST or in case when supplier is paying tax under composition scheme.

The basic or compulsory information to be showned under bill of supply document is listed below,

a) Name, address and GSTIN of the supplier.

b) A consecutive serial number not exceeding sixteen characters, in one or more multiple series, containing alphabets
or numerals or special characters.

(c) Date of its issue.

d) Name, address and GSTIN or UIN, if registered, of the recipient.

e) HSN Code of goods or Accounting Code for services.

Description of goods or services or both.

_ Value of supply of goods or services or both taking into account discount or abatement, if any.

Signature or digital signature of the supplier or his authorized representative.

SIA PUBLISHERSAND DISTRIBUTORS PVT. LTD.___________ ______ —-.. ..............

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UNIT-1 : Introduction To GST _ JL5

Format of Bill of Supply

BILL OF SUPPLY
Shri Ganesh Catering Services
W Vi C-3* defence Colony. Hyderabad, GSTIN 3717D9A44AC81ZS Bill Oate i8A»/2GH
W •• <• Andhra Pradesh 320&7&
State 37-Mdhra Pradesh Bill No. w
PAN ARGPV06ERPV No, -

Customer Name Billing Address Shipping Address

RagMvPvtLtx RaghavfMLtx R^hwPvHU
Andhra Pradesh Andhra Pradesh
Customer GSTIN
22AAACB12345N1Z

Place of Supply 37-Andhra Pradesh One-Bate -

Item HSN /SAC Quantity Rate / Item (T) Bt5C£Mint (?) Total

1, Rice 1006 50.00 KGS 55.00 - 2,750.00

Total (t) 2.750.00

TotalValue t 2,750.00
Total imwnt(in wads) Two Thousa^ Sms Hundred Fifty Rupees

For Shri Ganesh Catering Services

Authorised Signatory
x

1.6.1 Credit Note - Debit Note and Supplementary Invoice

Q20. Write a short note on credit note.
Answer : Model Paper-ll, Q9(a

Credit Note
The credit note is issued by the seller when the value of goods or services supplied by him has been reduced, decreases
or revised. In other words, it is also issued in case of sales return i.e., it is sent by the seller to the purchaser for the purpose
of sales return. Credit note consist of small explanation about the returned goods like price, discount, tax charged etc. .-
the Recounts of the returner is going to credited with the amount mentioned in the credit note thits the reason why it
called as credit note.
Conditions for Credit Note
According to GST rules a credit note is to be issued by a taxable person based on the original invoice already issi
by that person. Section 2 (37) of the GST law listed out some conditions or cases in which credit note can be issued,
1. When the taxable amount mentioned in the original invoice is more than the actual taxable amount.
2. When tax charged in the invoice is more than actual tax to be payable.
3. When recipient returns the goods to the supplier i.e., sales returns.
4. When goods sent to the buyer are deficient or not as per the satisfaction level of buyer.
GST Rules for Credit Note
The GST Rule 53 states that the credit note must contain the following details,
1. The word “Credit Note”, to be indicated prominently.
2. Supplier’s name, address, and GSTIN.
3. Nature of the document.
SIA PUBLISHERS AND DISTRIBUTORS PVT.

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16 THEORY AND PRACTICE OF GST

4. The consecutive serial number which is a unique number for every financial year.
5. Date of issue of the document.
6. Name, address and GSTIN or UIN, if registered, of the recipient.
7. Name and address of the recipient and the address of delivery, along with the name of State and its code, if such
recipient is unregistered.
8. Serial number and date of the corresponding tax invoice or, as the case may be, bill of supply.
9. Value of taxable supply of goods or services, the rate of tax and the amount of the tax credited or debited to the
recipient.
10. Signature or digital signature of the supplier or his authorized representative.
Q21. Write briefly about ‘Debit Note’ or ‘Supplementary Invoice’.
Answer : Model Paper-ll, Q9(b)

Debit Note or Supplementary Invoice

According to GST rules, a debit note is also called as supplementary invoice.
The debit note is issued by the seller when the value of goods or services supplied by him is increased. In other
words, it is issued incase of purchase returns i.e., when goods are returned by a purchaser to seller/supplier for the purpose
of purchase returns. Debit note consists of small explanation about the returned goods i.e., price, discount, tax charged etc.
However, when any purchaser is going to return goods to the supplier, he will prepare two debit notes. One will be sent to
the supplier and other will be kept with him. As the account of the seller is going to debited with the amount mentioned in
the debit note thats the reason why it is called as debit note.
Conditions for Debit Note
According to GST rules, a debit note is to be prepared by a recipient when goods are damaged or taxable value is
more than the actual tax. However, supplier can also generate debit note in case of any revision in the values of invoice or
(a) taxes charged under GST. According to Section 2 (38) of GST law there are certain conditions or cases in which a supplier
can issue the debit note are as follows,

■>es 1. When the tax invoice has a lower taxable value compare to the actual taxable value.
jse 2. When tax charged in the invoice in less than the actual tax payable.
As
GST Rules for Debit Note
t is
The GST Rule 53 states that the debit note should contain the following details,
1. The word “Debit Note”, to be indicated prominently.
f
ued 2. Supplier’s name, address, and GSTIN.
3 Nature of the document.
4. The consecutive serial number which is a unique number for every financial year.
5. Date of issue of the document.
6. Name, address and GSTIN or UIN, if registered, of the recipient.

I Name and address of the recipient and the address of delivery, along with the name of State and its code, if such
recipient is unregistered.
Serial number and date of the corresponding tax invoice or, as the case may be, bill of supply.
Value of taxable supply of goods or services, the rate of tax and the amount of the tax credited or debited to the
recipient.
}. Signature or digital signature of the supplier or his authorized representative.
5IA PUBLISHERS AND DISTRIBUTORS PVT. LTD.
TD

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UNIT-1 : Introduction To GST 17

Q22. Show the general format of Debit and Credit Note.
Answer :
There is no specific format described by the GST law for issuing debit or credit notes. However, the general format
of credit and debit note can be as follows,
SUPPLEMENTARY INVOICE/ DEBIT NOTE / CREDIT NOTE
Name of Supplier: SI/DN/CN No.:
Address: Date
Email id: Tax payable under Reverse Charge (Yes/No)
GSTIN: Mode of Transportation
Place of Supply:
Details of Receiver (Billed to) Details of Consignee (shipped to)
Name Name
Address Address
State State
State Code State Code
GSTIN: GSTIN:
Rate
HSN/ per Taxable
Description of Accounting item Total Discount Value CGST SGST/UTGST IGST
SNo. W&is/Services Code Q*y Unit (Rs) (Rs) (Rs.) («»-) Rate Rs. Rate Rs. Rate Rs. Total (Rs.)

Total InvoiceValue
Declaration: Freight Charges
The particulars given above are true and correct Loading charges
SI/DN/DC is issued in pursuance of Invoice No. dated Packing Charges
Insurance Charges
Other Charges
(Value in Words) Total Amount
Terms & Conditions For M/s

(Authorized Signatory)

1.6.2 Transportation of Goods without Issue of Invoice __________________________

Q23. Explain the Rule 55 of GST rules related to the “Transportation of Goods without Issue of Invoice”.
Answer :
The Rule 55 of Central Goods and Services Tax (CGST) rules, deals with the explanation of the transportation of
goods without issue of invoice. This rule consist of the following details,
1. Purpose
The purpose of this rule are as follows,
(a) For the purpose of supply of liquid gas where the quantity is unknown at the time of departure from place of supplier’s
business.
(b) For the purpose of transportation of goods in case ofjob work.
(c) For the purpose of transportation of goods for reasons other than by way of supply.
(d) For the purpose of supplies which may be not notified by the board, consignor issue a delivery challan which were
serially numbered not exceeding 16 characters, in one or more series or in lieu of invoice at the time of departure!
of goods for transportation which contains the following information,
❖ Date and number of delivery challan.
❖ Registered consignor’s or consignee’s Name, Address and GST identification number or unique identity number.}
❖ Harmonized system of nomenclature code and description of goods.
❖ Exact quantity to unknown.
SIA PUBLISHERS AND DISTRIBUTORS PVT. LTI

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18 THEORY AND PRACTICE OF GST

❖ Taxable value, tax rate or tax amount (Central Tax, State Tax, Integrated Tax, Union Territory Tax where the
transportation is for supply to the consignee).
❖ Signature.
2. Delivery Challan
According to the CGST rules, the delivery challan should be prepared in triplicate manner when goods are supplied.
It should include the following,
(a) Original copy marked as ‘Original’ for consignee.
(b) Duplicate copy marked as ‘Duplicate’ for transporter.
(c) Triplicate copy marked as ‘Triplicate’ for consignor.
3. Lieu of Invoice
According to CGST rules, place of the goods transported shall be specified i.e., where the goods has been transported
in lieu of invoice should be declared as specified in rule 138.
4. Supply to Recipient
According to CGST rules, supplier shall issue a tax invoice after delivery of goods where the goods has been
transported are for the purpose of supply to the receipient but the tax invoice may not be issued at the time of departure of
goods for supply purpose.
5. Semi or Completely Knocked Down Condition
According to CGST rules, following documents shall be issued when goods are transported in semi or completely
knocked down condition,
(a) Supplier need to issue a complete invoice before dispatch of the first consignment.
(b) Supplier need to issue a delivery challan for every subsequent consignment by providing the reference of invoice.
(c) Every consignment shall be accompained with the corresponding delivery challan copies including duly certified
copy of invoice.
I d) Original copy of invoice shall be sent with cost or final consignment.
1.7 INPUT CREDIT MECHANISM
Q24. What do you understand by the Input Tax Credit Mechanism under GST regime?
Answer :
Input Tax Credit (ITC) is considered as the backbone of GST. It claims the GST credit paid on purchase of goods
and services which are used for the furtherance of business. It includes the tax payable under reverse charge. A registered
person is eligible to avail ITC subjected to conditions prescribed.
One of the main advantage of implementing GST Act is that it has a continuous flow of input credit from the
-.anufacture^ to the consumer across the country. The input tax can be availed by every registered taxable person on all
.-,e inputs that are involved for the furtherance of the business.
The Input Tax Credit (ITC) is availed by considering various conditions under old tax regime. They are discussed
k below,
VAT Tax
In case of VAT tax, following are the conditions for availing Input Tax Credit (ITC),
Input VAT credit is availed on goods purchased during the course of business.
It is availed during the re-sale.
It is availed at the time of manufacture of goods which are subjected to prescribed conditions.
: It is availed only by the purchases from registered dealers within the state.
CENVAT/Service Tax
In case of CENVAT/service tax, following are the conditions for availing Input Tax Credit (ITC),
i CENVAT/Service tax credit is availed on all inputs that are used directly or indirectly relating to the manufacturing of
final products.
It can avail ITC on the service tax paid on any input service.
SA PUBLISHERS AND DISTRIBUTORS PVT. LTD._________________________

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UNIT-1 : Introduction To GST 19

1.7.1 Input Tax - Entitlement and Non-Entitlement

Q25. Describe briefly about the Entitlement and Non Entitlement of Input Tax Credit (ITC).
Answer :

Entitlement of Input Tax Credit (ITC)

Following are the circumstances in which input tax credit is allowed under GST,
(i) Only a registered person is liable to claim the benefits of ITC of GST.
(ii) ITC is allowed only on the part of goods/services used by the business.
(iii) It is not allowed for the personal use of goods and services.
(iv) It is availed on the part used for making taxable and zero rated supplies.
(v) Input tax is not allowed on goods/services used for exempt supplies.
Non Entitlement of Input Tax Credit (ITC)
Following are the circumstances where one cannot claim Input Tax Credit (ITC),
(i) If tax is paid on goods and services under the composition scheme.
(ii) If goods/services used for personal consumption.
(iii) If goods lost, stolen, destroyed, written off, disposed of gift or free samples.
(iv) If any tax paid due to non-payment of tax, short-payment of tax and excessive refund.
(v) If ITC utilized or availed by a way of fraud, will-full mis-statements and suppression of facts.
(vi) In case of motar vehicles and other conveyance.
(vii) On food & beverages, outdoor catering, beauty treatment, health service, cosmetic and plastic surgery.
(viii) On membership of club or fitness centre or health centre.
(ix) On travel benefits to employees i.e., leave travel allowance.
(x) On goods/services for construction of immovable property, whether to be used for personal or business use.
(xi) On rent-a-cab service, health insurance and life insurance.
(xii) In case of depreciation claimed on the tax element of the cost of capital goods under the provisions of the Income
Tax Act, 1961.
Q26.. Explain
f
(i) Input tax credit set off
(ii) Input tax credit claim
Answer :

(i) Input Tax Credit Set Off

The element of central tax and state tax is applicable on every transaction within a state. A registered person
eligible to avail the liability to pay the set off against the Input Tax Credit (ITC). The Input Tax Credit set off against ea<
element as prescribed by the GST law is explained as below,
(a) Central Tax
The input tax credit under central tax, set off against liability is availed by central tax and integrated tax.
(b) State Tax/ UT Tax
The input tax credit under state tax/UT tax, the set off against liability is availed by state/UT tax and integraed
(c) Integrated Tax
The input tax credit under integrated tax setoff against liability is availed by integrated central and state tax.
___ ■ SIIA PUBLISHERS AND DISTRIBUTORS PVT. L

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20 _____ THEORY AND PRACTICE OF GST

(ii) Input Tax Credit Claim
Following are the various conditions to avail input credit on the supply of goods/services proposed by GST law,
(a) The supplier has to pay the tax to the government.
(b) The dealer has to receive the appropriate goods/services.
(c) Returns of goods have to be filed in the Form GST REG-3.
(d) The invoice issued by a supplier should be registered under the GST Act.

1.8 GST RETURNS , _______ ______ _____________________ _

Q27. What do you mean by GST returns? State various forms of GST returns.
Answer :

GST Returns
GST returns is a record of summary' of monthly, quarterly or annual returns which includes the details of all the
inward and outward supplies that are filed by a taxable individual registered under GST.
Various Forms of GST Returns
Following are the various forms of GST returns which are discussed in detail,
Type of Form Description Frequency Due Date
1. Form GSTR-1 Furnish details of outward supplies of Monthly 10th of the following month
taxable goods and/or services effected.
2. Form GSTR-1 A Details of outward supplies as added, Monthly 17th of the following month
corrected or deleted by the recipient in
Form GSTR-2 will be made available to
the supplier
3 Form GSTR-2 Details of inward supplies of taxable goods Monthly 15th of the foll owing month
and/or services claiming input tax credit.
Addition or modification in Form GSTR-1
should be submitted in Form GSTR-2.
4. Form GSTR-2A Auto-populated details of inward supplies Monthly 11th of the following month
made available to the recipient, on the basis
of Form GSTR-1 furnished by the supplier.
5. Form GSTR-3 Monthly return on the basis of finalization Monthly 20th of the following month
of details of outward supplies and inward
supplies along with the payment of amount
of tax.
6. Forfri GSTR-3A Notice to a registered taxable person who 15 days from the date the
fails to furnish return. dealer defaulted by not
furnishing the returns.
7. Form GSTR 3B GSTR 3B return is a monthly self­ Monthly 20th of next month till
declaration which needs to be filed for July March 2018
2017 to March 2018 by a registered dealer.
It contains the details of outward and
inward supplies. Registered dealer need
file a separate GSTR 3B for each GSTIN
number.
8. Form GSTR-9 Annual Return - Furnish the details of the Annually 31st Dec of next fiscal
ITC availed and GST paid which includes
the local and interstate transactions and
import/exports.
9. Form GST ITC-1 Communication ofacceptance, discrepancy Monthly —
1 or duplication of the input tax credit claim.

I’D 5IA PUBLISHERS AND DISTRIBUTORS PVT. LTD._____ -

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UNIT-1 : Introduction To GST 21

Q28. Explain GSTR-9 in detail.
Answer :

Meaning of GSTR-9
GSTR-9 is an annual return which is filed by every taxable person registered under GST including taxable persons
registered under the composition scheme. Any persons paying TDS, Casual Taxable Person, Non-Resident Taxable Persons
and Input Service Distributors are not required to file GSTR-9. It is to be filed before 31st December of the subsequent
financial year.
Penalty
If GSTR-9 is not filed on time, then ? 100 under CGST and 100 under SGST shall be levied as a penalty per day.
The maximum of penalty is calculated at 1/4% of the total taxpayer turnover in a given State or Union Territory. However,
there is no penalty on IGST. In addition to the above penalty, an interest at 18% on amount of outstanding tax rate per
annum is also payable.
Revision
GSTR-9 cannot be revised after filing. Any errors or ommissions can be revised in next month’s return.
Format
Following are the 6 parts of GSTR.9 format as per CBIC,

Part Details
Part-1 The taxpayer must provide financial year, GSTIN, legal name and trade name.
Part-II Details of inward and outward supplies and advances received during the financial year are to be provided.
Part-Ill Details of ITC declared in returns such as ineligible ITC and ITC reversed in filed returns during the same
financial year.
Part-IV Details of the actual tax paid during the financial year as mentioned in returns filed are to be filled in this
section.
Part-V Particulars of transactions declared in returns of April to September of previous financial year or upto the
date of filing of annual return of subsequent financial year, whichever is earlier is to be provided in this part.
Pa0-VI Other information such as details of refunds or any demands made by the government, HSN-wise summary
of inward and outward supplies, information of supplies received from composition taxpayers, late fee or
penalty paid and payable is required to be provided under this section.

Types
Following are the 4 types of GSTR-9 forms,
1. GSTR-9
Regular taxpayers who are filing GSTR-1, GSTR-2 and GSTR-3 are required to file GSTR-9.
2. GSTR-9A
Taxpayers who are registered under composition scheme under GST are required to file GSTR-9A.
3. GSTR-9B
E-Commerce operators who filed GSTR-8 during the financial year are required to file GSTR-9B.
4. GSTR-9C
Taxpayers whose annual turnover is more than 2 crores during the financial year are required to file GSTR-1!
They must also get their accounts audited and file an audited copy of annual accounts, details of tax payable, reconciliad (
statement of paid tax along with GSTR-9C. | p
........ .............. SIIA PUBLISHERS AND DISTRIBUTORS PVT. LT

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22 THEORY AND PRACTICE OF GST

1.9 PAYMENT OFTAX

Q29. Explain briefly Payment of Tax under GST.

Answer :

A registered taxable person is liable to maintain and administrate the liability of tax, input tax credit and deposits
under some accounts. They are,

1. Electronic credit ledger

2. Electronic cash ledger

3. Electronic tax liability register.

1. Electronic Credit Leger

Electronic credit ledger is maintained in favour of each registered taxable person on the common portal. The input
tax is claimed under it to credit to the respective ledger. Input tax credit is debited to the ledger to discharge the tax liability
and to refund claim.

2. Electronic Cash Ledger

Electronic cash ledger is maintained in favour of each registered taxable person on the .common portal for the purpose
of crediting the deposited amount. It is debited to the extent of payment made towards tax, interest, penalty, fee or any
other amount.

3. Electronic Tax Liability Register

Electronic tax liability register is where all the amount payable by a registered taxable person will be debited. The
payment made by depositing the amount to the respective register is to be credited and e-filed. It includes some details of
applicability and periodicity for the payment of tax. They include,

(i) In case of a regular dealer, the due date is 20th of the subsequent month.

(ii) In case of composition dealer, the due date is 18th of the subsequent month.

Modes of Payment of Tax

The payment of tax involves two modes of payment. They are,

(i) Online mode

(ii) pffline mode.

(i) Online Mode

The online mode of payment of tax involve,

a) Payment through internet banking by authorized banks.

b) Credit or Debit card which are to be registered prior in the common portal.

.) National Electronic Fund Transfer (NEFT) and Real Time Gross Settlement (RTGS) from any bank.

i) Offline Mode

The offline mode of payment of tax involve payment through,

I i Cash up to ? 10,000 per challan per tax period.

-9C.
tl0r Cheque or Demand Draft (DD) by depositing through Over the Counter Payment (OTC).

5IA PUBLISHERS AND DISTRIBUTORS PVT. LTD. ____

.TO

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UNIT-1 : Introduction To GST 23

INTERNAL ASSESSMENT
I. Multiple Choice
1. _________ is also defined as tax on goods and services which is imposed at every point of sale or provision
of service. [ ]

(a) GST

(b) Input credit

(c) CENVAT credit

(d) Tax invoice

2. Central Excise Duty, Service Tax, Additional Duties of Customs, Duties of Excise etc, are the taxes subsumed
under___________ [ ]
(a) GST
(b) CGST

(c) SGST
(d) None of the above

3. The dealer should register under GST if he/she crosses__ _ ___ turnover threshold on a specific day. [ ]

(a) T 2 lakh

(b) T 20 lakh

(c) ? 15 lakh

(d) ? 10 lakh/20 lakh

4. The Part-A of the Form GST REG-01 is to be filled with the details of___________ .

(a) PAN

(b) Mobile number

(c) e-mail address

(d) All the above

5. At the time of supply, GST is charged on time of and time of

(a) Billing and shipping

(b) Shipping and carriage

(c) Exports and imports

(d) None of the above

6. Interstate supplies involves_________ .

(a) GST

(b) CGST
(c) IGST
(d) SGST
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24 THEORY AND PRACTICE OF GST

7. The_________ is determined on the basis of transaction value or quality of goods or MRP. [ ]
(a) VAT Tax
(b) Service Tax
(c) Excise Tax
(d) None of the above

8. Under central excise, the___ _____ credit should be availed in the current year to the extent of 50% and remaining
percent is to be availed in the subsequent year. [ ]
(a) VAT Tax
(b) CENVAT
(c) Excise Tax
(d) Input Tax

9. The process of preparing and sending an invoice to the buyer by the seller with including all the details of the product
or service sold in one document is referred as__________. [ ]
(a) Tax invoice
(b) Bill of supply
(c) CENVAT
(d) Invoicing <

10. The _______ of Central Goods and Services Tax (CGST) rules, deals with the explanation of the transportation
of goods without issue of invoice. [ ]
(a) Rule 55
(b) Rule 54
(c) Rule 53
(d) Rule 52

II. Fill in the Blanks

1. GST is also known as_________ .

2. _________ is a new tax imposed on selected goods like Pan masala, tobacco products, coal, aerated waters
£ etc.

3. GSTIN consists of a unique _____ PAN registration number.

*
4. The_________ is determined on the basis of taxable value of the service rendered.
5. The process of shifting the business ftom existing laws to GST is referred as _ __________ .

6. The document sent by the seller to the buyer including all the details of the product or service sold by the seller
to buyer is known as_________ .

7. _ ________ is issued by the seller when the value of goods or services supplied by him has been reduced,
decreases or revised.

8. _________ is issued by the seller when the value of goods or services supplied by him is increased.
9. Debit note is also known as__________ .

10. _________ claims the GST credit paid on purchase of goods and services which are used for the furtherance
of business.
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UNIT-1 : Introduction To GST __ _____

_ KEY
I. Multiple Choice
I- (a)
2. (b)

3. (d)
4. (d)

5- (a)
6. (c)

7. (c)

8. (b)

9- (d)

10. (a)

II. Fill in the Blanks

1. Value Added Tax (VAT)

2. GST cess

3. 15 digit

4. Service Tax

5. Transition to GST

6. Invoice

7. Credit Note

8. Debit Note
9. Supplementary invoice
14 Input Tax Credit (ITC).

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26 THEORY AND PRACTICE OF GST

III. Very Short Questions and Answers

Q1. What is GST?

Answer :

GST is widely established and a complete tax that is imposed on goods and services utilized in an economy. GST is
primarily a tax on final consumption and is imposed at every level of production-distribution chain with relevant setoff’s
in regard of the tax remitted at early levels. GST is also defined as tax on goods and services which is imposed at every point
of sale or provision of service.

Q2. Write about Transition to GST.

Answer :

The process of shifting or registering the business from existing laws to GST is referred as transition to GST. As the
GST is the multi-stage value added tax imposed by the Indian government on consumption of goods as well as services,
so it is compulsory for every registered businesses to move on their transaction through transition to GST.

Q3. What is Invoice?

Answer :

The document sent by the seller to the buyer including all the details of the product or service (i.e., price, quantity
etc) sold by the seller to buyer is known as invoice. It is a document which is considered as the bill and indicates what need
to be paid by the buyer to the seller.

Q4. Explain Input Tax Credit Mechanism.

Answer :

Input Tax Credit (ITC) is considered as the backbone of GST. It claims the GST credit paid on purchase of goods
and services which are used for the furtherance of business. It includes the tax payable under reverse charge. A registered
person is eligible to avail ITC subjected to conditions prescribed.

Q5. What is GSTR?

Answer :

G£T returns is a record of summary of monthly, quarterly or annual returns which includes the details of all the
inward and outward supplies that are filed by a taxable individual registered under GST.

3. SIA PUBLISHERS AND DISTRIBUTORS PVT. LTD. -

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A
UNIT Marketed by:

2 GETTING STARTED WITH GST

(GOODS)
v
sia »©up
J

r LEARNINGi OBJECTIVES ------------------------------------------------------- J

After studying this unit, one would be able to understand,

❖ Starting of GST in Tally.ERP 9.

❖ Intra and Inter State Supply of Goods.

❖ Return of Goods.

❖ Supplies Inclusive of Tax.

❖ Defining Tax Rates at Masters and Transaction Levels.

❖ GST Report - GSTR-1 and GSTR-2.

c INTRODUCTION

A company has to register for GST in Tally. ERP 9 to carry forward its tax credit to GST and for maintaining
the accounting books according to the requirements for GST compliance. In general, it is difficult to maintain
various details of customers and suppliers of the company with GST. However, Tally.ERP 9 easily stores the
required details and avails input tax credit at invoice level. It helps in an efficient generation of GST reports
with high accuracy. It generates GST complaint invoices effortlessly even for complex transactions. Tally.
ERP 9 handles all types of supplies and business scenarios leading to accurate GST report generation.
z
r In Tally. ERP 9, the input tax credit of VAT, CENVAT, Cess and Service tax can be transferred to GST by
passing an entry in Journal Voucher. The tax credit of cess, VAT, surcharge and additional tax has to be
transferred to the State tax ledger. The tax credit of Excise and Service Tax has to be transferred to Central
Tax ledger. Therefore, these entries are passed in two separate journal vouchers. (CENVAT can be claimed
by a dealer on the purchase as per GST).

Intrastate supply of goods refers to the transactions in which the supplier of the goods and the recipient of
the goods belong to the same state or union territory. The transaction takes place within the same state.

Interstate supply of goods refers to the transactions in which location of the supplier of the goods is different
from the location of the recipient of goods or the location of supply.

... . . -------------------- SIA PUBLISHERS AND DISTRIBUTORS PVT. LTD.

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28 THEORY AND PRACTICE OF GST

PART-A
SHORT QUESTIONS WITH SOLUTIONS
■ ' ........... —..... —‘
Q1. How GST is started in Tally.ERP 9? Write briefly about the process of transferring Input Tax Credit to
GST.
Answer :
Getting Started with GST
A company has to register for GST in Tally. ERP 9 to carry forward its tax credit to GST and for maintaining the
accounting books according to the requirements for GST compliance. In general, it is difficult to maintain various details
of customers and suppliers of the company with GST. However, Tally.ERP 9 easily stores the required details and avails
input tax credit at invoice level. It helps in an efficient generation of GST reports with high accuracy. It generates GST
complaint invoices effortlessly even for complex transactions. Tally. ERP 9 handles all types of supplies and business
scenarios leading to accurate GST report generation.
Process of Transferring Input Tax Credit to GST
In Tally. ERP 9, the input tax credit of VAT, CENVAT, Cess and Service tax can be transferred to GST by passing
an entry in Journal Voucher. The tax credit of cess, VAT, surcharge and additional tax has to be transferred to the State tax
ledger. The tax credit of Excise and Service Tax has to be transferred to Central Tax ledger. Therefore, these entries are
passed in two separate journal vouchers. (CENVAT can be claimed by a dealer on the purchase as per GST)._______ ___
Q2. What do you mean by intra state supply of goods?
Answer : Model Paper-I, Q2

Intrastate supply of goods refers to the transactions in which the supplier of the goods and the recipient of the goods
belong to the same state or union territory. The transaction takes place within the same state.
The intra-state supply of goods and services would be divided into two types. They are,
1. Intra-state Inward Supply of Goods and Services.
2. Intra-state Outward Supply of Goods and Services.
The inward and outward supply of goods and services are recorded by using ‘Purchase Voucher’ and sale of goods
and services are recorded by using ‘Sales Voucher’.
Q3. What do you mean by inter state supply of goods?
Answer : Model Paper-Ill, Q4

Interstate supply of goods refers to the transactions in which location of the supplier of the goods is different from
the location of the recipient of goods or the location of supply.
For example, Mars & Co. is a trader registered in Telangana. When the company supplies good to a recipient trader
in West Bengal then it is said to be Interstate supply of goods. Integrated Tax is applicable in case of interstate supply of
goods, f
The inter-state supply of goods and services would be divided into two types. They are,
1. Inter-State Inward Supply of Goods and Services.
2. Inter-State Outward Supply of Goods and Services.
The inward and outward supply of goods and services are recorded by using ‘Purchase Voucher’ and sale of goods
and services are recorded by using ‘Sales Voucher’.
Q4. Write about return of goods.
Answer : Model Paper-Ill, Q3

Return of Goods refers to return by the recipient of goods for various reasons. The goods are returned to the supplier
by customers due to damaged products, wrong products or any other reason. Tax liability is charged for such returns under
GST. Based upon the nature of transaction, the Return of Goods are of two types,
1. Purchase Returns
2. Sales Returns.
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UNIT-2 : Getting Started with GST (Goods) 29

Following are the provisions related to handling of tax liability and recording return of supplies under the GST law,
(i) If the goods are returned by the recipient within 6 months from the date of purchase, then the tax payable is equal
to the input tax credit availed on the inward supply of goods.
(ii) If the goods are returned by the recipient after 6 months from the date of purchase, the tax payable will be equal
to the tax rate as on the date of return.
Debit Note is used to record Purchase returns and Credit Note is used to record Sales returns.
Purchase Returns
Purchase Returns refers to the returning of goods by the company to the supplier of goods. The company may return
goods due to damaged or wrong products. Purchase returns are recorded in Debit Note of Tally.ERP 9.
Sales Returns
Sales Returns refers to the returning of goods to the company by the recipient of goods or by the customer. The
goods may be returned due to damaged or wrong products or any other reason. Sales returns are recorded in Credit Note
in Tally. ERP 9.
Q5. Write a short note on hierarchy of applying tax details.
Answer : Model Paper-I, Q7

Tally. ERP 9 allows the users to define tax rates at various levels. It offers the convenience of applying tax rules
at company level, which is the highest level. It also enables the users to define, override or modify tax details at lower
levels such as transaction level, accounting ledger and group level and stock item and group level on basis of company’s
requirement.

Figure: Hierarchy for Applying Tax Details in Tally. ERP 9

Q6. What is GST Report? What do you mean by GSTR-1 and GSTR-2?
X
Answer : Model Paper-ll, Q4

GST Report
A GST report is a document consisting of summary of monthly quarterly or annual returns which includes the details
of all the inward and outward supplies which are filed by a taxable individual registered under GST. It is used for calculating
the GST which is to be paid. It shows a list of transactions which provide a definitive reference to the calculation of GST.
In Tally ERP 9, there are two GST reports. They are GSTR-1 and GSTR-2.
GSTR-1
GSTR-1 is a monthly return comprising the detailed information of all outward supplies which are filed by a taxable i
person who is registered under GST. It is in a standardized format which is prescribed by the Taxation Department of India, j
It is divided into multiple tables which are used for capturing various types of outward supply.
GSTR-2
GSTR-2 is a monthly return comprising the detailed information of all inward supplies which are filed by a taxable!
person who is registered under GST. It is in a standardized format which is prescribed by the Taxation Department. It isl
divided into multiple tables which are used for capturing various types of inward supply.
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30 THEORY AND PRACTICE OF GST

PART-B
ESSAY QUESTIONS WITH SOLUTIONS
..................■!■■■...................... . ............................................. Illi .............................. -

2.1 INTRODUCTION - ENABLING GST AND DEFINING TAX DETAILS

Q7. Briefly discuss about getting started with GST. Discuss the various steps involved in enabling GST
and defining Tax details.
Answer : _ Model Paper-I, Q10(a)

Getting Started with GST

A company has to register for GST in Tally. ERP 9 to carry forward its tax credit to GST and for maintaining the
accounting books according to the requirements for GST compliance. In general, it is difficult to maintain various details
of customers and suppliers of the company with GST. However, Tally.ERP 9 easily stores the required details and avails
input tax credit at invoice level. It helps in an efficient generation of GST reports with high accuracy. It generates GST
complaint invoices effortlessly even for complex transactions. Tally. ERP 9 handles all types of supplies and business
scenarios leading to accurate GST report generation.
Enabling GST and Defining Tax details
In Tally. ERP 9, GST should be enabled for recording all the Tax details.
The following are the various steps involved in enabling GST and defining tax details of a company in Tally. ERP 9:
Step 1 :
Create a company in Tally. ERP 9 with the details as follows,
Company Name : Mars & Co.
Address : No. 307, Galaxy building, Telangana - 500005.
Financial year: 01-04-2018
Step 2 :
Go to Gateway of Tally > Press F11 > Press F3
A ‘Statutory and Taxation details’ sub-screen appears as shown below,
Company Mars & Co.

Statutory and Taxation

Enable Goods and Services Tax (GST! ? Enable Tax Deducted at Source (TDS) 7 No

>4
Set/alter GST details F5BH Set/alter TDS details ? No
Enable |falue Added Tax (VAT) ? No Enable Tax Collected at Source (TCSj ? No
Set/alter VAT details ? No Set/alter TCS details ? No
Enable excise ? No
Set/alter excise details ? No
Is
Enable service tax ? No
>g Set/alter sendee tax details ? No
T.
Tax Information

PAN/Income tax no :

Corporate Identity Ho (CINJ:

>le
ia.

ble
t is
Pi: Accounts F2: Inventory F3: Sattitac F6: Add-Ons

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UNIT-2 : Getting Started with GST (Goods) 31

Step 3 :
Set ‘Yes’ to ‘Enable Goods and Services Tax (GST)’ and Set ‘Yes’ to ‘Set/alter GST details’.
A ‘GST Details’ screen appears as shown below,

GST Details

State Telangana
Registration type Regular
GSTIN/UIN 36AAAAA1984A1Z7
Applicable from 1-Apr-2018
Set/alter GST rate details ? Yes
Enable GST Classifications ? No
Provide LUT/Bond details ? No

Step 4 :
Enter the details in the screen of GST details as shown in the screen above.
A ‘Tax Rate Details’ screen appears as shown below,

■
Tax Rate Details

HSN/SAC Details

Description Ice-Cream
HSN/SAC 21050000

Tax Details
(From 1-Apr-2018)
Taxability Taxable

Tax Type Rate

Integrated Tax 18 %
Central Tax 9 %
State Tax 9 %
Cess ■El%
Step 5 :
Enter the details in the ‘Tax Rate Details’ screen as shown above.
Step 6 :
Enter 18 % for Integrated Tax. The Central Tax and the State Tax are auto-filled.
Step 7 :
Press Enter > Press Ctrl + A to Accept.

2.2 TRANSFERRING INPUT TAX CREDIT TO GST

Q8. Describe the process of transferring Input Tax Credit to GST with an example.
Answer :
In Tally. ERP 9, the input tax credit of VAT, CENVAT, Cess and Service tax can be transferred to GST by passing
an entry in Journal Voucher. The tax credit of cess, VAT, surcharge and additional tax has to be transferred to the State tax
ledger. The tax credit of Excise and Service Tax has to be transferred to Central Tax ledger. Therefore, these entries are
passed in two separate journal vouchers. (CENVAT can be claimed by a dealer on the purchase as per GST).
■ 5IA PUBLISHERS AND DISTRIBUTORS PVT. LTD.

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32 THEORY AND PRACTICE OF GST

Example :
Transfer of closing balance of input tax credit to GST
Date Particulars
1-5-2018 Ali Pvt. Ltd, transferred the input VAT credit of? 11,000 to state tax.
1-5-2018 Ali Pvt. Ltd, transferred the CENVAT credit of ? 2,500 to central tax ledger
Pass theabove entries in the book of accounts.
Solution :
Step 1 :
Create Accounting Master
(i) Create Central Tax Ledger by following the steps given below,
❖ Go to Gateway of Tally > Accounts Info > Ledgers > Create
❖ Enter the details in “Central Tax” ledger as shown in the screen below,

❖ Press Ctrl + A to Accept.

(ii) Create State Tax ledger with the following details,
Name : State Tax
Under : Duties & Taxes
Type of duty/tax : GST
Tax type : State Tax
(iii) Create VAT ledger with the following details,
Name:VAT
Under : Duties & Taxes
Type of duty/tax : Others
(iv) Create CENVAT ledger with the following details,
Name : CENVAT
Under : Duties & Taxes
Type of duty/tax : Others
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UNIT-2 : Getting Started with GST (Goods) ___ _ 33

Sta>2:
Go to Gateway of Tally (GOT) > Accounting Vouchers > Press F7 for Journal Voucher.
Step 3 :
Press F2 and enter Date as 1-5-2018.
Step 4 :
Press Alt + J

Step 5 :
Enter the details as shown in the screen above.
Step 6 :
Pass the entry in the ‘Journal Voucher’ as shown in the screen below,

■■EZZSSflHI no 1 1-May-2018;
T uesday
Used Opening Balance

Particulars Debit Credit i

■ Dr State^Tax 11,000.00
CUBa? 17,000.00 Dr
Cr VAT 11,000.00
Cur Sai. 11,000.00 Cr

Step 7 :
Follow the same process and pass the Journal for Transfer of CENVAT Credit of? 2,500 to central tax ledger.
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34 THEORY AND PRACTICE OF GST

Step 8 :
The Journal Voucher appears as shown below,

2.3 INTRASTATE SUPPLY OF GOODS - INTRASTATE INWARD SUPPLY

Q9. What is Intrastate Supply of Goods? Explain Intrastate Inward Supply with an example.
Answer: Model Paper-ll, Q10(a)

Intrastate Supply of Goods

Intrastate supply of goods refers to the transactions in which the supplier of the goods and the recipient of the goods
belong to the same state or union territory. The transaction takes place within the same state.
The intra-state supply of goods and services would be divided into two types. They are,
1. Intra-state Inward Supply of Goods and Services.
2. Intra-state Outward Supply of Goods and Services.
The inward and outward supply of goods and services are recorded by using ‘Purchase Voucher’ and sale of goods
and services are recorded by using ‘Sales Voucher’.
Intrastate Inward Supply
Intrastate Inward Supply means receipt of supply of goods either by acquisition or by purchase with or without
consideration belongs to same state. It is concerned with purchases in same state.
Example
The Company (Mars & Co.) Purchased 2,000 pcs of Mango Ice-cream from Jon Snow Traders. The
following are the particulars of the transaction. Pass the required entry for the same in Tally. ERP 9
and determine its taxability:

Date Particulars
2-5-2018 Purchase Voucher:

] Purchase the following from Jon Snow Traders, Telangana with

Supplier Invoice no : A/01, with Central Tax - 9 % and State Tax - 9%
Name of Item Quantity Rate Amount (?)
Mango Ice-cream 2,000 100 2,00,000

D. SIA PUBLISHERS AND DISTRIBUTORS PVT. LTD. _

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UNIT-2 : Getting Started with GST (Goods) 35

Solution :

The supplier Jon Snow Traders belongs to Telangana. Therefore, the transaction is an Intrastate transaction and
Central Tax and State Tax are applicable.
The following are the steps involved in accounting for intrastate inward supplies,
Step 1 :
Create Party Ledger
In the previously created Company Mars & Co.,
(i) Go to Gateway of Tally (GOT) > Accounts Info. > Ledger > Create
(ii) Enter the following details in the “Jon Snow Traders”,
Name : Jon Snow Traders
Under : Sundry Creditors
Mailing Details:
Name : Jon Snow Traders
Address : No. 75, Winterfell
Country : India
State : Telangana
Pincode : 500077
Set/alter GSt details? “Yes”
The “Jon Snow Traders” ledger appears as shown in the below screen,
Ledaer Creation Mars & Co. I
Total Opening Balance
Name Jon Snow Traders
(a‘iss)

Mailing Details
Under Sundry Creditors Name Jon Snow Traders
(Current Liabilities) Address No.75, Winterfell

Maintain balances bill-by-bill 7 No

Country India
Inventory values are affected ? No Pincode 500077
State Telangana

Provide bank details No

Tax Registration Details

PAN/IT No
Set/alter GST details

•V / </ y ' b /
"J ■

Opening Balance I on 1-Apr-2018} :

(iii) After setting the ‘Set/Alter GST details’ as ‘Yes’ in the above screen, the sub screen of GST details appears.
Enter the ‘GST Details’ as shown in the screen below,
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36 THEORY AND PRACTICE OF GST

GST Details

Registration type Regular

GSTIM/UIN 36BBBBB1478B1Z5
Party Type Mot Applicable
Is a e-Commerce operator cm
(iv) Press Ctrl + A to save.
Step 2 :
Create Purchase Ledger
❖ Enter the following details,
Name : Purchase
Under: Purchase Accounts
Statutory Information:
Is GST Applicable? Applicable
Set/alter GST Details ? No
Type of supply : Goods
❖ Press Ctrl + A to Save.
The “Purchase Leoger” is seen in the below screen.

Step 3 :
Create Stock Item
(i) Go to Gateway of Tally (GOT) > Inventory Info > Stock Items > Create
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UNIT-2 : Getting Started with GST (Goods) 37

The ‘Mango Ice-cream’ stock item is created as seen in the below screen.

Marne Mango Ice - Cream

(anas)

Set/modify default ledgers for invoicing 7 No

Under J Primary n formation Behaviour

Units Costing method

1 Applicable
? No Market valuation method
Type of Supply Goods Ignore difference due to physical counting?
Rate of Duty (eg 5) Ignore negative balances ?
Treat all sales as new manufacture ?
Treat al! purchases as consumed
Treat all rejections inward as scrap ?

Quantity Rate per Value

Opening Balance

(ii) Enter the following details,

Name : Mango Ice-cream
Under : Primary
Units : Press Alt + C and Create unit as Pcs as shown in the screen below,
Unit Alteration (Secondary}

Type Simple
Symbol Pcs
Formal name.

Number of decimal places H

Alternate Unit: Not Applicable
Statutory Information:
GST Application : Applicable
Set/alter GST Details? Yes
^A ‘GST Details’ screen appears as shown below,

Enter the details as shown above.

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38 THEORY ANO PRACTICE OF GST

Step 3 :
For recording the entry' of intrastate inward supply of goods,
Go to Gateway of Tally > Accounting Vouchers > Press F9 for Purchase Voucher.
(i) Ensure that the voucher is in Item Invoice mode.
(ii) Press F12 to open configuration.
(iii) Set ‘Yes’ to ‘Use common ledger account for item allocation’ as shown in the screen below,

Purchase Invoice Standard Configuration

General Options
Enable supplementary' details ? Yes
(Address details, despatch details, etc.)

Allow separate buyer and consignee names ? No

Use common ledger account for item allocation
Use defaults for bill allocations ? Yes
Provide additional descriptions for stock item name ? No
Provide additional descriptions for ledger name ? No
Statutory Options
Calculate tax on current sub-total ? No
(else ca/culatfons are on mwrttory total only)
Allow modification of tax details for GST ? No
Other Options
Warn on negative stock balance ? Yes

| Press F12 for more options.

(iv) Press Ctrl + A to Save.

Step 4 :
Enter the following details in the Purchase Voucher,
Supplier Invoice no : A/01
Date : 2-5-2018
Party A/c name : Jon Snow Traders
A ‘Party Details’ screen appears as shown below,
Other Reference(s)

Supplier's Details
Supplier Jon Snow Traders
Address No.75, Winterfell

State Telangana
GSTIN/UIN 36BBBBB147SB1Z8

Press ‘Enter’.

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r 38 THEORY AND PRACTICE OF GST

Step 3: «-pr-
For recording the entry of intrastate inward supply of goods,
Go to Gateway of Tally > Accounting Vouchers > Press F9 for Purchase Voucher.
(i) Ensure that the voucher is in Item Invoice mode.
(ii) Press F12 to open configuration.
(iii) Set ‘Yes’ to ‘Use common ledger account for item allocation’ as shown in the screen below,

Purchase Invoice Standard Configuration

General Options
Enable supplementary' details ? Yes
(Address details, despatch details, etc.)

Allow separate buyer and consignee names ? No

Use common ledger account for item allocation
Use defaults for bill allocations ? Yes
Provide additional descriptions for stock item name ? No
Provide additional descriptions for ledger name ? No
Statutory Options
Calculate tax on current sub-total ? Ho
(else calculations are on inventory total only)
Allow modification of tax details for GST ? No
Other Options
Warn on negative stock balance ? Yes

j Press Fl 2 for more options.

(iv) Press Ctrl + A to Save.

Step 4 :
Enter the following details in the Purchase Voucher,
Supplier Invoice no : A/01
Date : 2-5-2018
Party A/c name : Jon Snow Traders
A ‘Party Details’ screen appears as shown below,
Other Reference(s)

Supplier's Details
Supplier Jon Snow Traders
Address No.75, Winterfe.il

State Telanrjana
GSTIN/UIN

Press ‘Enter’.
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UNIT-2 : Getting Started with GST (Goods) 39

Step 5 :
(i) Select ‘Purchase’ account in the Purchase Ledger.
(ii) Select ‘Mango Ice-cream’ for the Name of Item.
(iii) Enter Quantity as 2,000 and Rate as ? 100.
(iv) Press enter after the total Amount.
(v) Select Central Tax and enter.
(vi) Select State Tax and enter.
The amounts are auto-filled for these ledgers,
(vii) Press F2 and enter the date as 2-5-2018.
The “Intrastate inward Supply in Purchase Voucher” appears as shown below,
Purchase Mo 1 Z-May-2018
i Supplier invoice nc A/01 Date 2-May-2918 Wednesday

; Party A-'c name Jon Snow Traders

i Current balance
i Purchase ledger Purchase
i Name of Item______ Quantity Rate pet Amount;

2XHMMXMJ Pes 100.00 Pcs 2,00,000.00'

Mango Ice - Cream

18,000.00^
; Central Tax
State Tax ■■■EEZE3

riarrati.cn 2 0GGQDQPcs 2.36,000.00

Step 6 :
Press Alt + A to view ‘Tax Analysis’ screen.
Step 7 :
Press Alt + F1 for a detailed view.
The Tax Analysis screen appears as shown below,

It can be observed that the Central Tax and the State Tax have been calculated @ 9% each.
----------- ... SKA PUBLISHERS AND DISTRIBUTORS PVT. LTD.

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40 THEORY AND PRACTICE OF GST

Step 8 :
Press Esc to go back to Purchase Voucher
Step 9 :
Press Ctrl + A to Save.
Step 10 :
To View GSTR-2,
Go to Gateway of Tally > Display > Statutory Reports > GST > GSTR-2.
Step 11 :
The GSTR-2 report appears as shown below,
[GSTR-2
1 May-2018 to 31-May-2O18
; Returns Summary
N—IIIMIM—1
I included in returns
i Mot relevant.forreturns Oi
- d
‘ IncompleterMismatch in information (to be rescued;-

Table Particulars . Count Taxable Value Integrated Tax Centra! Tax State Tax Amount Cess Amount Tax Amount Invoice Amount?
No. Amount Amount

4 B2B Invoices 1 2.00,000 00 18.000 SO 18 000 00 36.000 00 2 ?

5 import of Goods Invoices

■
16 Import of Services Invoices

7 Cfe^t/Debrt notes

8 Mil Rated Invoices t

& ISD Credit *

10t 1) TDS Credit j
1012) TCS Credit i

11 ITC Received ;

12 Tax liability under Reverse Chargeon Advance

13 Tax Paid under Reverse Chargeon Advance

14 ITC Reversal

> /str'es -3 ca^.w-e re 'er c » rorrsf ,-sadf a a <? ard<se d&c eyed “g e

2.3.1 Intrastate Outward Supply

Q10. What do you mean by Intrastate Outward Supply? Give an example.
Answer :

Intrastate Outward Supply refers to the supply of goods and services through sale, exchange, transfer, rental, licence,
lease, barter and disposal in a business. It takes place within the same state or union-territory. The supplier of goods and
services and the recipient must be in the same location or State or Union Territory. Central Tax and State Tax are applicable
in these transactions. Therefore, intrastate outward supply is concerned with sales in same state.
Example
The Company (Mars & Co.) Sold 200 PCS of Mango Ice-Cream to Afrozullah Traders. The following are
the particulars of the transaction. Pass the necessary entry in Tally. ERP 9 and determine its taxability

Date Particulars
1-6-2018 Sales Voucher:
The following goods were sold to Afrozullah Traders, Telangana
with Reference no : 7/BA, with Central Tax-9 % and State Tax-9 %
Name of Item Quantity Rate Amount (?)
Mango Ice-Cream 200 150 30,000
Packing Charge = 2000
Discount Allowed @ 2%

SIIA PUBLISHERSAND DISTRIBUTORS PVT. LTD. .. - -........................ ...............

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UNIT-2 : Getting Started with GST (Goods) 41

Solution :
The recipient Afrozullah Traders belongs to Telangana. Therefore, the transaction is an intrastate transaction and
Central Tax and State Tax are applicable.
The following are the steps involved in accounting for intrastate outward supply,
Step 1 :
Create Afrozullah Traders, Party’s Ledger
From the previously created company Mars & Co.,
(i) Go to Gateway to Tally > Accounts Info > Ledger > Create.
(ii) Enter the following details,
Name : Afrozullah Traders
Under : Sundry Debtors
Country: India
State : Telangana
Pincode : 500071
Set/alter GST details? “Yes”
The ‘Afrozullah Traders’ ledger appears as shown below,
Total Opening Balance
Name Afrozullah Traders
(alias)

Details
Under . Sundry Debtors Name Afrozullah Traders
(C&r&Fft Assets) Address

Maintain balances bill-by-bill ? No

Country India
Invent cry values are affected ? No Pincode 500071
State Telangana

Provide bank details No

Tax Registration Details

PAN/IT Ho
Set/alter GST details ?EZSHH

Opening Balance . ( on 1-Apr-2O18J :

(iii) Enter the ‘GST Details’ as shown in the screen below,

GST Details

Registration type Regular

GSTIN/UIN 36AKKKK2528L1Z5
Party Type J Not Applicable
Is a e-Commerce operator

(iv) Press Ctrl + A twice to Save.

________ SIA PUBLISHERS AND DISTRIBUTORS PVT. LTD.

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42 THEORY AND PRACTICE OF GST

Step 2 :
Create Expense Ledger (Packing Charges)
(i) Enter the following details,
Name : Packing Charges
Under : Indirect Expenses
Statutory Information:
Is GST Applicable : Not Applicable
Set/alter GST Details? No
Include in assessable value calculation for : GST
Appropriate to : Goods
Method of Calculation : Based on Value
The ‘Packing Charges’ ledger appears as shown below,

(ii) Press Ctrl + A to Save.

Step 3 :
Create another Expense Ledger (Discount Allowed)
(i) Enter the following details,
Name : Discount Allowed
Under : Indirect Expenses
Statutory Information:
Is GST Applicable ? Not Applicable
Set/alter GST Details? No
Include in assessable value calculation for: GST
Appropriate to: Goods ' /

Method of Calculation: Based on Value

(ii) Press Ctrl + A to Save.
5IA PUBLISHERS AND DISTRIBUTORS PVT. LTD.

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UNIT-2 : Getting Started with GST (Goods) 43

The following screen shows “Discount Allowed” ledger,
I Name . Discount Allowed Total Opening Balance

Mailing Details
Under Indirect Expenses Name
Address
Inventory values are affected ? No

Country

Statutory Information
Provide bank details No
Is GST Applicable ? J Not Applicable
Set/alter GST Details ? No Tax Registration Details
PAN/IT No.
Include in assessable value calculation for. GST
Appropriate to Goods
Method of Calculation Based on Value

1
I

Accept ? !

Opening Balance I on 1-Apr-2018) : Yes c flo

Step 4 :
Create Sales Ledger
(i) Enter the following details,
Name : Sales
Under : Sales Accounts
Statutory Information:
Is GST Applicable ? Applicable
Set/alter GST Details ? No
Type of Supply : Goods
(ii) Press Ctrl + A to Save.
The following screen shows the ‘Sales’ Account ledger,
; Name Sales Total Opening Balance
(s’ias)

Mailing Details
Under Sales Accounts Name
Address
Inventory values are affected ? Yes

Statutory Information
Provide bank details No
Is GST .Applicable ? J Applicable
Set/alter GST Details ? No
Type of Supply Goods Tax Registration Details
PAN/IT No

Accept ?

Opening Balance (on 1-Apr-2018) : Yes ■ I -■

5IA PUBLISHERS AND DISTRIBUTORS PVT. LTD

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44 THEORY AND PRACTICE OF GST

Step 5 : '

For recording the entry of Intrastate Outward Supply of Goods,

Go to Gateway of Tally > Accounting Vouchers > F8.
(i) Ensure that the voucher is in Item Invoice mode.
(ii) Press F2 and enter date as 1 -6-2018.
(iii) Enter Reference no.: 7/BA.

(iv) Select Afrozullah Traders in Party A/c name.

(v) Press Enter to Accept.
(vi) Select Sales in Sales Ledger.
(vii) Select Mango Ice-Cream in the Name of the item field.

(viii) Enter Quantity as 200 and Rate as T50 and enter.

(ix) The total amount is calculated automatically.
(x) Press Enter twice.
(xi) Select Packing Charges ledger and enter the amount as ? 2000.
(xii) Select Discount and enter rate as 2%.

(xiii) Select Central Tax, the amount is calculated automatically.

(xiv) Select State Tax, the amount is calculated automatically.
The Intrastate Outward Supply in Sales Voucher appears as shown below,

Step 6 :
Press Alt + A to view Tax Analysis.
Step 7 :

Press Alt + F1 for details.

5IA PUBLISHERS AND DISTRIBUTORS PVT. LTD. ...

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UNIT-2 : Getting Started with GST (Goods) 45

The ‘Tax Analysis’ screen appears as shown below,

Tax Analysis

Particulars Taxable Value Tax rate Duty'Tax Value

GST Details

;CS - WOSOOM
item va»ve < Sates Va^e 30,00000) 30,000.00
C-a res (2 000 00 / 30 000 tX? ’ 30,000 001 2.000 00
Osccv-t A'T-.er: (600 00 '30,000.00 ‘ 30.000 00) SOO.OO
Ce-ifra: Tax 9% 2.934.00
Sials Tax ■$% 2,934.00

Total __________ 5.868.00

Step 8 :
Press Esc to go back to Sales Voucher.
Step 9 :
Press Ctrl + A to Save.
Step 10 :
GSTR-1 report is used to view the tax implication of an outward supply transaction.
To view GSTR-1,
Go to Gateway of Tally > Display > Statutory Reports > GST > GSTR-1
The GSTR-1 report appears as shown below,

Step 11 :
Press Esc to go back.
, - SIIA PUBLISHERS AND DISTRIBUTORS PVT. LTD.

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46 THEORY AND PRACTICE OF GST

Step 12 :
Generate GST Tax Invoice
Go to Gateway of Tally > Accounting Vouchers > Press Page up to view the Sales Voucher in Alteration mode.
(i) Press Alt + P > Press F12.
(ii) The Invoice Print Configuration sub-screen appears as shown below,

Standard Sales Configuration

Title of Document ' Tax Invoice
(for optional vouchers) . PROFORMA INVOICE
Sub Title (if any)
General Order And Despatch Details
Print in simple format ? No Print order details ? Yes
Print Customers Signature 7 No Print terms of payment and Delivery ? Yes
Print complete mailing details 7 No Print despatch details ? Yes
Print Bank Details 7 No
Statutory Details
Item Details
GST
Print quantity column 7 Yes
Print alternate quantity Print Company GSTIN Number ? Yes
7 Yes
Print Buyers GSTIN Number ? Yes
Print as separate column 7 No
Print actual quantity column Print GST Analysis of Items ? Yes
7 No
Print rate column 7 Print GST % column 7 No
Yes
I Print Additional Description! s! for Item Name 7 Print HSN/SAC column ? Yes
Yes
Print State Name & State Code ? Yes
Registration Details Print Place of Supply ? Yes
Print Company’s PAM f Income Tax No Print Tax Invoice in Base Currency ? No
7 Yes
Print Company's Tax Reqn. Numbers 7 Print Tax amount for Export Invoice ? Yes
Yes
Print Party's PAN / Income Tax No. 7 No
Print buyer's tax reqn number 7 Yes
Print Buyer's CST Regn Number 7 Yes

Jurisdiction

Generated by This is a Computer Generated Invoice

Press Fl2 for more oofions.

Step 13 :
Enable the options as shown in the screen above.
Step 14^:

Press Esc to go back to Sales Invoice.

A Voucher Printing sub-screen appears as shown below,
............................. ,........ ...................................

Voucher Printing

Printer Canon LBP6300 (IP 192.168 0 8! Paper type A4

Number of copies 1 .
Print language English (Printing dimensions)
Print format Neat Mode Paper size (8 2T x 11 69’) or |21Q mm x 297 mm|
Range of pages to print All Print area (7.95" x 11 34") or {202 mm x 288 mm|

Report Titles

Tax Invoice ------------------

Print ?
TWfterf company no.:, Wihoitt company website

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UNIT-2 : Getting Started with GST (Goods) 47

Step 15 :
Press Alt + I to enable Printing with Preview > Enter.
Step 16 :
Click on Zoom option to view the Tax Invoice clearly.
Step 17 :
The Tax Invoice appears as shown below,
Tax Invoice

Mars & Co. Invoice No. Dated

No 307 Galaxy Building 1 1-Jun-2018
GSTINAJIN: 36AAAAA1984A1Z7 Delivery Note ModefTerms of Payment

Suppliers Ref. Other Ref erence(s)

7BA
Buyer s Order No. Dated
Buyer
Afrozullah Traders
Despatch Document No. Delivery Note Date
Telangana Code 36
GST IN rUIN 36AKKKK2528 L1ZS Despatched through Destination
Place of Supply: Telangana
Terms of Delivery

SI Description of Goods HSN/SAC Quantity Rate per Amount

VO
1 Mango Ice - Cream 21050000 200.000 PCS 150.00 Pcs 30,000.00

Packing Charges 2,000.00

Discount Allowed 2 % 600.00
Central Tax 2.934.00
State Tax 2,934.00

• »

Total 200.000 Pcs 38,468.00

Amount Changeable (in words? E 4OE
INR Thirty Eight Thousand Four Hundred Sixty Eight Only
HSN/SAC ■ >1'7 . Taxable Central Tax State T ax
Value Rate Amount Rate Amount
21050000 32.600.00 • 9% 2.934.00 9% 2.934.00
Total 32.600.00 2,934.00 2,934.00
Tax Amount (in words) : INR Five Thousand EightHundred Sixty Eight Only

Declaration tor Mars 8. Co.

W e declare that this invoice shows the actual price of the
goods described and that all particulars are true and
correct. Authorised Signatory
This is a Computer Generated Invoice

5HA PUBLISHERS AND DISTRIBUTORS PVT. LTD

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47 48 THEORY AND PRACTICE OF GST

2.4 INTERSTATE SUPPLY - INTERSTATE INWARD ANDOUTWARD SUPPLY

Q11. Define Interstate Supply. Explain Interstate Inward Supply with an example.
Answer S Model Paper-H, Q10(b)

Interstate Supply
Interstate supply of goods refers to the transactions in which location of the supplier of the goods is different from
the location of the recipient of goods or the location of supply.
For example, Mars & Co. is a trader registered in Telangana. When the company supplies good to a recipient trader
in West Bengal then it is said to be Interstate supply of goods. Integrated Tax is applicable in case of interstate supply of
goods.
The inter-state supply of goods and services would be divided into two types. They are,
1. Inter-State Inward Supply of Goods and Services.
2. Inter-State Outward Supply of Goods and Services.
The inward and outward supply of goods and services are recorded by using ‘Purchase Voucher’ and sale of goods
and services are recorded by using ‘Sales Voucher’.
Interstate Inward Supply
Interstate Inward supply means interstate receipt of goods either by acquisition or by purchase with or without
consideration.
Example
The following are the particulars of the transaction of purchase of goods from Muskan Traders.
Date Particulars
1-7- 2018 Purchase Voucher
Purchased the following goods from Muskan Traders, West
Bengal with Reference no. : A/02, with Integrated GST -18 %
Name of Item Quantity Rate Amount (?)
Chocolate 300 100 30,000
Solution :

As the location of the supplier is West Bengal, which is different from the location of supply i.e., Telangana, the
transaction is Interstate in nature. Hence, Integrated Tax is applicable.
Following are the steps involved in accounting for interstate inward supplies in Tally. ERP 9,
Step
Create Party Leader
From the previously created Company Mars & Co. <t(Jn
(i) Go to Gateway of Tally > Accounts Info > Ledgers > Create.
(ii) Enter the following details,
Name : Muskan Traders
Under : Sundry Creditors
Maintain balances bill-by-bill? ‘Yes’
Mailing Details:
State : West Bengal
Pincode : 700005
Tax Registration Details:
Set/alter GST details? ‘Yes’

LTD. SIA PUBLISHERSAND DISTRIBUTORS PVT. LTD. —

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UNIT-2 : Getting Started with GST (Goods) 49

(iii) A‘GST Details’ sub-screen appears as shown below,

GST Details

Registration type Regular

GSTIN/UIN 19AAAGM0789C1ZG
Party Type J Not Applicable
Is a e-Commerce operator

(iv) Select Registration type as ‘Regular’

(v) Enter GSTIN/UIN as 19AAAGM0789C1ZG
(vi) Press Enter to go back to ledger creation
(vii) Press Ctrl + A to save or Accept.
The ‘Muskan Traders’ ledger appears as shown below,
Total Opening Balance
; Name Muskan Traders
fslas)

Mailing Details
Under Sundry Creditors- Muskan Traders
Name
(Current ba&rfi&esf Address

Maintain balances bill-by-bill ? Yes

Default credit period
Check fei credit days dun ng voucher entry ? No
Country India
Inventory values are affected ? No
State West Bengal Pincode . 700005

Provide bank details No

Tax Registration Details

PAN/IT No
Set/alter GST details ? Yes

r Accept ?

Opening Balance l on 1-Apr-2018) : Yes cr No

Step 2 :
Create Interstate Purchase Ledger
(i) Enter the following details,
Name (Interstate Purchase
Under : Purchase Accounts
Statutory Information:
Is GST Applicable ? Applicable
Set/alter GST Details ? No
Type of Supply: Goods
(ii) Press Ctrl + A to Accept or save
SIA PUBLISHERS AND DISTRIBUTORS PVT. LTD.

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50 THEORY AND PRACTICE OF GST
The Interstate Purchase Ledger appears as shown below, ■ f3 <

Name Interstate Purchase Total Opening Balance

(abas)

Mailing Details
Under Purchase Accounts
Name
Address

Inventory values are affected ? Yes

Statutory Information Provide bank details No

is GST Applicable ? J Applicable

Set/alter GST Details ? No Tax Registration Details
Type of Supply Goods PAN/IT No

Accept ?
Opening Balance on 1-Apr-2018) :
Yes ? No

Step 3 :
Create Integrated Tax Ledger
(i) Enter the following details,
Name : Integrated Tax
Under : Duties & Taxes
Types of duty/tax : GST
Tax type : Integrated Tax
(ii) Press Ctrl + A to Accept.
The Integrated Tax ledger appears as shown below,
Name . Integrated Tax Total Opening Balance
(alias}

Mailing Details
Under Duties & Taxes Name
r Address
: Type of duty/lax GST
Tax type Integrated Tax
Inventory values ate affected ? No
. Percentage cf calculation ? 0%

Rounding method J Not Applicable

Provide bank details No
1 Statutory information
Tax Registration Details
PAN/IT No

Accept ?

Opening Balance ( on 1-Apr-2018) :

Yes cr No

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UNIT-2 : Getting Started with GST (Goods) 51

Step 4:
Create Stock Item
(i) Go to Gateway of Tally > Inventory Info. > Stock Items > Create.
(ii) Enter the following details,
Name : Chocolate
Under : Primary
Units : Pcs
Alternate Unit: Not Applicable
Statutory Information:
GST Application ? Applicable
Set/alter GST Details ? ‘Yes’
A ‘GST Details’ sub - screen appears, as shown below,
SEE
Tax Rate Details

HSN/SAC Details

Description Chocolate
HSN/SAC 18069010

Tax Details

Calculation type On Value

Taxability Taxable

Tax Type Rate

Integrated Tax %
Central Tax %
State Tax %
Cess

(iii) Enter the details as shown above.

(iv) Press Ctrl + A to go back to stock Ledger creation.
The “Chocolate” Stock Item appears as shown below,
Name : Chocolate

Set/modify default ledgers for invoicing ? Mo

Under J Primary Statutory Information Behaviour

Units : Pcs Costing method Avg. Cost

GST Applicable J Applicable
Alternate units ? J Mot Applicable Market valuation method Avg. Price
Set/alter GST Details ? Yes

Set standard rates ? Ho Type of Supply Goods Ignore difference due to physical counting? No
Rate of Duty (eg 5) 0 ’:aia"oes ? No
Treat all sales as new manufacture ? No
Treat all purchases as consumed ? Mo
Treat all rejections inward as scrap ? No

Quantity Rate per Value Accept ?

Opening Balance
Yes No

Press Ctrl + A to accept or save.

_________ . ___________ SIIA PUBLISHERS AND DISTRIBUTORS PVT. LTD.

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52 THEORY AND PRACTICE OF GST
Step 5 :
For recording the entry of interstate inward supply of goods,
Go to Gateway of Tally > Accounting Vouchers > Press F9 for Purchase Voucher.
(i) Ensure that the voucher is in Item Invoice mode.
(ii) Press F2 and enter date as 1-7-2018.
(iii) Enter the supplier invoice no as A/02, the date is auto - filled as Voucher’s date.
(iv) Select Muskan Traders in the Party A/c name and press Ctrl + A to accept the Party Details.
(v) Select Interstate Purchase in the Purchase ledger field.
(vi) Select Chocolate in the Name of Item field.
(vii) Enter Quantity as 300 and Rate as ? 100. Amount is automatically calculated,
(viii) Press Enter twice to select GST ledger.
(ix) Select Integrated Tax and the amount is automatically calculated.
(x) Press Alt + A to view Tax Analysis.
(xi) Press Alt + F1 for details.
The Tax Analysis appears as shown below,
Tax Analysis

Particulars Taxable Value Tax rate Duty/Tax Value

CST Details

if?'
C'hc-oc-isre f; 0) 30,000.00 5.400.00
/tern Valc-e (Pt/rshs&s -/Sue 30,000.00 / 30,000.00
Mfepotai Tax 13% 5.400.00

Total 5.400.00

Step 6:
Press Esc to go back to Purchase Voucher.
Step 7 :
Press Ctrl + A to Accept.
The Interstate Inward Supply in Purchase Voucher appears as shown in the screen below,
________ ___________ Tio 2
Purchase IJimMIS
^upplier invoice no AQ2 Date : 1 Jun-2018 Friday

i Party A c name : Muskan Traders

i CttWit bslar>G$
i Purchase ledger : Interstate Purchase
1 Name of Item Quantity Rate per Amount

Chocolate 300.000 Pcs 100.00 Pcs

Integrated Tax 5,400.00

Narration 100 WO Pcs Accept ?

SIA PUBLISHERS AND DISTRIBUTORS PVT. LTD.

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UNIT-2 : Getting Started with GST (Goods) 53

Step 8 :
As the transaction is inward supply, GSTR-2 is viewed to know the tax implication.
Go to Gateway of Tally > Display > Statutory Reports > GST > GSTR-2
(i) Press enter in the B2B Invoices field.
(ii) The GSTR-2 appears as shown below,

* Vouchers cf B2B Invoices 1-Jun-2018 to 30-Jun-2018

• Date Particulars GSTIH/UIN Veh Type Veh No. Taxable Integrated Tax Central Tax State Tax Cess Total Tax Invoice
Value Amount Amount Amount Amount Amount Amount

| ;
_____________________________ _____________________________ _______________ _
j GrandTota! 30,800.00 5,400.00 ___________ 5,400.00 35,400.00

Q12. What do you mean by Interstate Outward Supply? Give an example.

Answer :

Interstate Outward Supply refers to the supply of goods or/and services through sale, exchange, transfer, rental,
licence, lease, barter and disposal in a business. The suppliers location and the location of supply are different. Integrated
Tax is applicable in such transactions. The supplier of the goods belongs to a different location and the goods are supplied
to a different location. Such a supply is called Interstate outward supply.
Example
The following are the particulars of the transaction of sale of goods to Afreen Traders,

Date Particulars
2-7-2018 Sales Voucher:
Sold the following goods to Afreen Traders, Kerala with
Reference no. : M/03, with integrated GST-18 %
Name of Item Quantity Rate Amount (?)
Chocolate 100 150 15,000
Packing Charges = ? 1,000
Discount Allowed @ 1 %

Solution :

As the location of the recipient is in Kerala, which is different from the location of supplier i.e., Telangana, the
transaction is Interstate in nature. Hence, Integrated Tax is applicable.
Following are the steps involved in accounting for interstate outward supplies in Tally. ERP 9,

-- SIA PUBLISHERSAND DISTRIBUTORS PVT. LTD.

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54 THEORY AND PRACTICE OF GST

Step 1 :
Create Party Ledger
From the previously created company Mars & Co.,
Go to Gateway of Tally > Accounts Info. > Ledgers > Create.
(i) Enter the following details,
Name : Afreen Traders
Under : Sundry Debtors
Maintain Balances Bill-By-Bill ? ‘Yes’
Maintain Details:
Country : India
State : Kerala
Pincode : 700041
Tax Registration Details:
Set/alter GST details ? Yes
The Party’s ledger i.e., ‘Afreen Traders’ appears as shown below,
Name Afreen Traders Total Opening Balance
(aJ-as)

Mailing Details
Udder . Sundry Debtors
Name : Afreen Traders
Assets) Address
Maintain balances bill-by-bill ? Yes
Default credit period
Check for ere riit days, dud ng vouche r entry ? No
Inventory values are affected ? No Country India
State Kerala Pincode . 708041

Provide bank details . No

Tax Registration Details

PAN/IT No
SetZa Its r GST -data i I s ? ESHB

Opening Balance ( on 1 -Apr-2818} :

(ii) Enter the ‘GST Details’ as shown in the screen below,

GST Details ...

Registration type Regular

GSTIN/UIN 32DDDDD1485D1Z5
Party Type J Not Applicable
Is a e-Commerce operator ? IxQHH

(iii) Press Ctrl + A twice to Accept or Save.

5IA PUBLISHERS AND DISTRIBUTORS PVT. LTD. - —- -

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UNIT-2 : Getting Started with GST (Goods) 55

Step 2 :
Create Interstate Sales Ledger
(i) Enter the following details,
Name : Interstate Sales
Under: Sales Account
Statutory Accounts:
In GST Applicable ? Applicable
Set/alter GST Details ? ‘No’
Type of Supply : Goods
(ii) Press Ctrl + A to Accept or save.
The Interstate Sales Ledger appears as shown below,
Total Opening Balance ;
Name : interstate Sales
fctaSSl -

Mailing Details
Under Sales Accounts Name
Address
Inventory values are affected ? Yes

Statutory Information
Provide bank details No
Is GST Applicable ? J Applicable
Set alter GST Details ? No |
Type of Supply : Goods Tax Registration Details • I
PAW No

Accept ?

Opening Balance i oh 1-Apr-2Q18) : ¥es or Ho

Step 3 :
Record the entry of Interstate Outward Supply of Goods
Go to Gateway of Tally > Accounting Vouchers > F8
(i) Ensure that the voucher is in Item Invoice mode.
(ii) Press F2 and enter the date as 2-7-2018
(iii) Enter Reference no. as M/03
(iv) Select Afreen Traders in Party A/c name field and accept (Ctrl + A) the Party Details screen.
(v) Select Interstate Sales in Sales ledger field
(vi) Select Chocolate in the Name of item filed.
(vii) Enter Quantity as 100 and Rate as ? 150. The Amount is automatically calculated.
(viii) Press Enter twice
(ix) Select Packing Charges and enter Amount as ? 1000
(x) Select Discount Allowed and enter Rate as 1% and amount is automatically calculated.
(xi) Select Integrated Tax and the amount is automatically calculated.
— SIA PUBLISHERS AND DISTRIBUTORS PVT. LTD.

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56 THEORY AND PRACTICE OF GST

The Interstate Outward Supply in Sales Voucher appears as shown below,

Step 4 :
Press Alt + A to view Tax Analysis.
Step 5 :
Press Alt + F1 for details.
The ‘Tax Analysis’ screen appears as shown below,

Press ‘Esc’ to go back Interstate Sales Voucher.

Step 7 :
Press Ctrl + A to Accept or save.
Step 8 :
GSTR-1 report is used to view the tax implication of an Outward Supply transaction.
To view GSTR-1,
Go to Gateway of Tally > Display > Statutory Report > GST > GSTR-1
SIA PUBLISHERS AND DISTRIBUTORS PVT. LTD. . .

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UNIT-2 : Getting Started with GST (Goods) 57
The GSTR-1 report appears as shown below,
GSTR-1 1 -Jul-2018 to 31 Jul 2018

Returns Summary i
Total number of vouchers for the period 1
Included tn returns 1
Not relevant for returns 0
Incomplete/Msmatch in information (to be resolved) 0
Table Particulars Count Taxable Value Integrated Tax Centra) Tax State Tax Amount Cess Amount Tax Amount Invoice Amount;
No. Amount Amount

<S B2Cf’Large} ftwices

7 B2Ci‘Small} invoices
3 C:edit-Deait Holes
§ Mil Rated Invoices ■ '

10 Exports Invoices
11 Tax Liability on Advances
12 Setoff of Tax Paid against Advances

...... . .
Step 9 :
Press Enter on B2B Invoices.
The Voucher Register screen appears as shown below,

2.5 RETURN OF GOODS

Q13. What is ‘Return of Goods’? What are the various steps involved in activating debit notes and credit
notes?
Answer : Model Paper-I, Q10(b)

Return of Goods
Return of Goods refers to return by the recipient of goods for various reasons. The goods are returned to the supplier
by customers due to damaged products, wrong products or any other reason. Tax liability is charged for such returns under
GST. Based upon the nature of transaction, the Return of Goods are of two types,
1. Purchase Returns
2. Sales Returns.
SIA PUBLISHERS AND DISTRIBUTORS PVT. LTD.

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58 _ ________ _ THE0RY AWD PRACTICE OF GST

Following are the provisions related to handling of tax liability and recording return of supplies under the GST law,
(i) If the goods are returned by the recipient within 6 months from the date of purchase, then the tax payable is equal
to the input tax credit availed on the inward supply of goods.
(ii) If the goods are returned by the recipient after 6 months from the date of purchase, the tax payable will be equal
to the tax rate as on the date of return.
Debit Note is used to record Purchase returns and Credit Note is used to record Sales returns.
Following are the various steps involved in activating Debit and Credit Notes, in the previously created Company
Mars & Co.,
Step 1 :
Go to Gateway of Tally > Press F11 + F1 to open Accounting Features sub-screen.
Step 2 :
Set ‘Yes’ to the following options,
Invoicing
Use debit and credit notes ? Yes
Record credit notes in invoice mode ? Yes
Record debit notes in invoice mode ? Yes
Step 3 :
Press Ctrl + A to Accept or save.
Company Mars & Co.

Account! tq Features

General Invoicinq
Maintain accounts only ? No Enable invoicing ? Yes
Integrate accounts and inventory ? Yes Record purchases in invoice mode ? Yes
Use Income and Expenses A/c instead of Profit and Loss A'c ? No Use debit and credit notes ? Yes
Record credit notes in invoice mode ? Yes
Enable multi-currency ? No Record debit notes in invoice mode "IySM
Outstandinq Management Budqets and Scenario Management
Maintain bill-wise details ? Yes Maintain budgets and controls ? No
For non-trading accounts also ? No
Use reversing journals and optional vouchers ? No
Activate interest calculation ? No
Use advanced parameters ? No Banking Features
Cost.'Profit Centres Management Enable cheque printing ? Yes
Maintain payroll ? No Set/alter transaction types ? No
Maintain cost centres ? No Set/alter banking features ? No
Use j£ost centre for fob costing ? No Set/alter post-dated transaction features ? No
Maintain more than one payroll or cost cateqory ? No
Use ore-defined cost centre allocations in transactions ? No Other Features
Show opening balance for revenue items in reports ■> No Enable zero-valued transactions ? No
Maintain multiple mailing details for company and ledgers ? No
Set/alter company mailing details ? No
Enable company logo ? No
dit
Fl: Accounts F2: Inventory F3: Statutory F6: Add-Ons

i(b)
2.5.1 Purchase Returns
Q14. What do you mean by ‘Purchase Returns’ ? Explain the process of accounting of purchase returns in
ier
Tally. ERP 9.
ier
Answer :

Purchase Returns
Purchase Returns refers to the returning of goods by the company to the supplier of goods. The company may return
goods due to damaged or wrong products. Purchase returns are recorded in Debit Note of Tally. ERP 9.
D.
5IIA PUBLISHERS AND DISTRIBUTORS PVT. LTD. _____________

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UNIT-2 : Getting/
d with GST (Goods) 59
The GSTP-4

j GSTR-1
■ Returns Sjg
ticulars of purchase returns of Mars & Co. Company to Jon Snow Traders. Record
Total ny
C> o\« in appropriate voucher in Tally. ERP 9.
i
1 z CA
G Particulars_______________________
1 t C/>
>bit Note Voucher:
—rs & Co. of Telangana returned the following goods to Jon Snow
Traders against the supplier invoice no : A/01, dated 2-5-2018, with
central Tax - 9 % and state Tax - 9 %
Name of Item Quantity Rate Amount (?)
Mango Ice - Cream 400 100 40,000
Solution :
Following are the steps involved in recording purchase returns in a debit note,
Step 1 :
Go to Gateway of Tally > Accounting Vouchers > Press Ctrl + F9 for Debit Note.
Step 2 :
Ensure that the voucher is in Invoice mode, if not Press Ctrl + V : As Invoice.
Step 3 :
Press F2 and enter the date as 31-5-2018.
Step 4 :
Enter the Original Invoice no. as A/01 (the invoice no. of purchase invoice against which the returns are made).
Step 5 :
Enter the date as 2-5-2018 (the date of purchase invoice against which the returns are made).
Step 6 :
Select Jon Snow Traders in the Party A/c name field and press Ctrl + A to accept the Party Details.
Step 7 :
Select Purchase in the Purchase ledger field.
Step 8 :
Select Mango Ice - Cream in the Name of Item field.
Step 9 :
Enter Quantity as 40 and Rate as ? 150. Amount is automatically calculated.
Stepl^:
Press Enter twice to select GST ledgers.
Step 11 :
Select Central Tax ledger. The amount is automatically calculated.
Step 12 :
Select State Tax ledger. The amount is automatically calculated.
Step 13 :
Set ‘Yes’ to Provide GST details.
An Additional Details : Purchase Taxable sub-screen appears as shown below,

Additional Details : Purchase Taxable

Supplier's Debit-Credit Note No 31-May-2018

Step 14 :
Enter the Supplier’s Debit/Credit Note No. as 1 and Date as 31-5-18
___________ SOA PUBLISHERS AND DISTRIBUTORS PVT. LTD.

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60 THEORY AND PRACTICE OF GST

Step 15 :
Press Ctrl + A to Accept or save.
The Debit Note Voucher appears as shown below,
MRSISKMI < io 1 3!-May 2618
Original invoice no ■ A/01 Date 2-May 2018 Thursday

Party Arc name Jon Snow Traders

ba/ascs 2,36,000.00 Cr
Purchase ledger : Purchase
flame of Item Quantity Rate &er Amount ■

Mango Ice - Cream 40.006 Pcs 150.00 Pcs 6,000.00

Step 16 :
GSTR -2 is used to view the tax implication of the Debit Note Voucher. To view GSTR-2,
Go to Gateway of Tally > Display > Statutory Report > GST > GSTR-2.
Step 17 :
Press F2 to change period.
Step 18 :
Enter 1-4-2018 in the Form field and press enter.
Step 19 :
The GSTR-2 appears as shown in the screen below,

Step 20 :
Purchase return transaction is listed under the Credit/Debit Note column.
5IA PUBLISHERS AND DISTRIBUTORS PVT. LTD. ———

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UNIT-2 : Getting Started with GST (Goods) 61

Step 21 :
Press enter in the Credit/Debit column to view the details of voucher register as shown below,

2.5.2 Sales
SalesReturns
Returns __
Q15. What do you mean by Sales Returns? Explain the process of accounting of sales returns in Tally. ERP 9.
Answer :
Sales Returns
Sales Returns refers to the returning of goods to the company by the recipient of goods or by the customer. The
goods may be returned due to damaged or wrong products or any other reason. Sales returns are recorded in Credit Note
in Tally. ERP 9.
Example
Following are the particulars of Sales returns to Mars & Co. Company by Afrozullah Traders. Record
the Sales returns in appropriate voucher in Tally. ERP 9.
Date Particulars
2-6-2018 Credit Note Voucher:
Afrozullah Traders of Telangana returned the following
goods to Mars & Co. Against the sales reference no : 7/BA,
dated 1-6-2018, with central Tax - 9 % and state Tax - 9 %
Name of Item Quantity Rate Amount (?)
Mango ICE - Cream 70 150 10,500

Solution :
Following are the steps involved in recording sales returns in a credit note,
Step 1 :
Go to Gateway of Tally > Accounting Vouchers > Press Ctrl + F8 for Credit Note.
Step 2 :
Ensure that the voucher is in Invoice mode, if not Press Ctrl + V : As Invoice.
Step 3 :
Press F2 and enter the date as 2-6-2018.
Step 4 :

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62 THEORY AND PRACTICE OF GST
Step 5 :
Enter the Date as 1-6-2018 (the date of sales invoice against which the returns are made).
Step 6 :
Select Afrozullah Traders in the Party A/c name field and Press Ctrl + A to accept the Party Details.
Step 7 :
Select Sales in the Sales Ledger field.
Step 8 :
Select Mango Ice - Cream in the Name of Item field.
Step 9 :
Enter Quantity as 70 and Rate as ?150. Amount is automatically calculated.
Step 10 :
Press Enter twice to select GST ledgers.
Step 11 :
Select Central Tax ledger. The amount is automatically calculated.
Step 12 :
Select State Tax ledger. The amount is automatically calculated.
Step 13 :
Press Ctrl + A to Accept or Save.
The Credit Note Voucher appears as shown below, •

Step 14 :
GSTR -1 is used to view the Tax Implication of the Credit Note Voucher.
To view GSTR-1,
Go to Gateway of Tally > Display > Statutory Report > GST > GSTR-1.
Step 15 :
Press F2 to change period.
Step 16 :
Enter 1-4-2018 in the Form field and press Enter.
Step 17 :
The GSTR-1 appears as shown in the screen below,

5IA PUBLISHERS AND DISTRIBUTORS PVT. LTD.---------

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UNIT-2 : Getting Started with GST (Goods) 63

1-Apr 2018 to 31-Jul-2018 J

GSTR-1
; Returns Summary 1

i lota! number of vouchers for the period 6|

d|
Included in returns
Mot relevant for returns 31
\ o|
\ Incomplete-Mismatch in information Ito be resolved?
i Table Particulars Count Taxable Value Integrated Tax Central Tax State Tax Amount Cess Amount Tax Amount Invoice Amount |
No. Amount Amount - - 1

:5 B2B Invoices 2 48 750 00 2.907 00 2 934,00 2 934 00 8 ?’? W 57 525 Ml

; -. .... ' ' . '■

7 t B2C(SmaH) Invoices > »« '•>« J

9 Mil Rated Invoices |

: 1& Exports Invoices

11 Ta? Liability co Advances i
■ ’2 Setoff of Tax Raising ain^t'Advances . f: 1

; . . # I

‘‘rwlTJ4S,5’ a? va<?, % ~ s j’g £0 *3 &•'} ‘ai 'i<&p<a>&ai $ * ___ _ _ _ _ |

Step 18 :
Sales return transaction is listed under the Credit/Debit Note column.
Step 19 :
Press enter in the Credit/Debit column to view the details of voucher register as shown below,

2.6 SUPPLIES INCLUSIVE OF TAX

Q16. What are Supplies Inclusive of Tax? Explain the method of recording sales transaction inclusive of
GST in Tally. ERP 9.
Answer : Model Paper-Ill, Q10(a)

Supplies Inclusive of Tax

Supplies inclusive of Tax implies that the rate of goods or services includes tax. In GST, the price charged for goods
is inclusive of GST. The GST is not charged separately on the price. This is called supplies inclusive of tax.
___________________________________ 5IIA PUBLISHERS AND DISTRIBUTORS PVT. LTD.

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64 THEORY AND PRACTICE OF GST

Example :

Following are the particulars of sales to Amjed Traders, Telangana. Record the entry for the sales
transaction in appropriate voucher in Tally. ERP 9.

Date Particulars
1-7-2018 Sales Voucher
The following goods were sold to Amjed Traders, Telangana
with Reference no : 7/MA,
Name of Item Quantity Rate (Inclusive of Tax) Amount (?)
Chocolate 50 180 9,000

Solution :

Following are the steps involved in accounting for sales - inclusive of tax in Tally. ERP 9,
Step 1 :

Create Party Leader

From the previously created Company Mars & Co.
(i) Go to Gateway of Tally > Accounts Info > Ledgers > Create.
(ii) Enter the following details,
Name : Amjed Traders
Under: Sundry Debtors

Maintain balances Bill-By-Bill ? ‘Yes’

Mailing Details:
State : Telangana
Pincode : 500007
Tax Registration Details:
Set/alter GST details ? ‘Yes’
j A GST Details sub-screen appears as shown below,

• . GST Details

Registration type Regular

GSTIN-UIN 36AAGMA0124A1Z6
Party Type J Not Applicable
is a e-Commerce operator

(iii) Select Registration type as ‘Regular’

(iv) Enter GSTIN/UIN as 36AAGMA0124A1Z6
(v) Press Enter to go back to ledger creation
(vi) Press Ctrl + A to save or Accept
(vii) The ‘Amjed Traders’ ledger appears as shown below,

5IA PUBLISHERS AND DISTRIBUTORS PVT. LTD. -------- ---------------------- ________

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UNIT-2 : Getting Started with GST (Goods) 65

Total Opening Balance

Name Amjed Traders
(alias}

Mailing Details
Under Sundry Debtors Name Amjed Traders
fCiinB-vt Assets) Address
Maintain balances bill-by-bill ? Yes
Default credit period
Check for credit days during voucher entry ? No
? No Country India
Inventory values are affected 500007
State Telangana Pincode
♦
Provide bank details No

Tax Registration Details

PAN/TT No
Set/alter GST details

Opening Balance (on 1 -Apr-2018) :

Step 2 :
For recording supplies inclusive of tax,
Go to Gateway of Tally > Accounting Vouchers > Press F8.
Step 3 :
Press F12 to view Voucher Configuration.
Step 4 :
Set ‘Yes’ to ‘Allow entry of rate inclusive of tax for stock item’ option and Press Ctrl + A to Save.
Stepf5 :
Press F2 and enter date as 1-7-2018.
Step 6 :
Enter Reference no. as 7/MA.
Step 7 :
Select Amjed Traders ledgers in the Party A/c name field.
Step 8 :
Press Ctrl + A to accept the Party Details sub - screen.
Step 9 :
Select Sales in the Sales ledger field.
Step 10 :
A GST Classification Details sub-screen appears as shown below,
___________ - _________ 5IA PUBLISHERSAND DISTRIBUTORS PVT. LTD.

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66 THEORY AND PRACTICE OF GST
Ctrl 4-M □
I Natures of Transaction

J Not Applicable
Deemed Expods Exempt of 7rar?ssc?>{xt
Deemed Ex po Is T axable Vstuss of Tratwacfrfsn I
Exports Exempt a? fewcfiSfl .
Exports LU i Bund of Tranaa-cto i
Experts T axable of T'-gnaaator.
Interstate Sales Exempt
interstate Safes Uli Rated t&fgvs- of Transact.^
interstate Sates Taxable ■'va&re of 7fsr>ssctis<">
Sales Exempt Nature sf 7rans3GVQ>->
Sales Mil Rated Nature cf Ttwisscfoa ;

Sales to Consumer - Exempt t'/atv’e of T-ansact’C^

Sales *o Consumer - Taxable Nature ef Transacts
Tax Classification details Sales to SEZ - Exempt Nature cf T'-gnsasoD-.
Sales to SEZ - LUT<Bond of Taosgcr.&o
Classification-Mature Sales to SEZ - Taxable tvsLi'S of fra<’S5cto;

Step 11 :
Select Sales Taxable in the Classification/Nature field.
Step 12 :
Select Chocolate in the Name of Item field.
Step 13 :
Enter Quantity as 50 and Rate (Incl. of Tax) as ?180. The Rate and Amount are automatically calculated.
Step 14 :
Press Enter twice to get GST ledgers.
Step 15 :
Select Central Tax ledger and the amount is automatically calculated.
Step 16 :
Select State Tax ledger and the amount is automatically calculated.
The Sales Invoice of supply inclusive of tax appears as shown below,

SIA PUBLISHERS AND DISTRIBUTORS PVT. LTD. --- ----------- ------

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UNIT-2 : Getting Started with GST (Goods) 67
Step 17 :
Press ALT + A to view ‘Tax Analysis’
Step 18 :
Press ALT + F1 for a detailed view.
The ‘Tax Analysis’ screen appears as shown below,

Step 19 :
Press Esc to go back to Sales Voucher.
Step 20 :
Press Ctrl + A to accept or Save.
Press F12 and set ‘No’ to ‘Allow entry of rate inclusive of tax for stock item’ after recording the transaction.

2.7 DEFINING TAX RATES AT MASTER AND TRANSACTION LEVELS - DEFINING GST RATES
AT STOCK, GROUP LEVEL
7 ~
Q17. How are tax rates defined at Master and Transaction Levels? Explain in detail about defining GST Rates
at Stock Group level.
Answer :

Defining Tax rates at Master and Transaction levels

GST configuration can be defined at various levels in Tally. ERP 9 such as transaction level, stock item level, stock
group level, group level, ledger level and company level. It offers the flexibility to apply tax rules at the company level,
which is the highest level and also offers the convenience to define or override details at the lower levels depending upon
the requirement of the business.
When a company has multiple stock items, which deal with various tax rates, then these tax rates can be defined for
either a stock item or stock group or at the accounting ledger level.
Defining GST Rates at Stock Group Level
Companies or businesses deal with various stock items. GST rate varies from one stock item to another. At the stock
group, level, GST rate for each stock item can be defined separately.
....................... SIA PUBLISHERS AND DISTRIBUTORS PVT. LTD.

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68 THEORY AND PRACTICE OF GST
Example
Following are the tax rate details of various products offered by a company Mars & Co.. Define GST
rate at stock group level for the stock items.
Particulars HSN Code GST rate
Coffee: 9019020 5%
Classic Coffee
Strong Coffee
Fruit Juice: 20099000 12%
Mango Juice
Orange Juice
Solution :
Following are the steps involved in defining GST rates at stock group level,
Step 1 :
From the previously created Company Mars & Co.,
Go to Gateway of Tally > Inventory Info > Stock Groups > Create.
Step 2 :
Enter Name as Coffee, Under Primary.
Step 3 :
Set ‘Yes’ to ‘Should quantities of items be added’ option.
Step 4 :
Set ‘Yes’ to ‘Set/alter GST Details’ option.
A Tax Rate Details sub-screen appears as shown below,

Tax Rate Details

HSN/SAC Details

Description Coffee
HSN/SAC 9019020

Tax Details

Taxability Taxable

Tax Type Rate

Integrated Tax 5 %
Central Tax 2.50 %
State Tax 250 %
Cess MH %

Step 5:
Press F12 and set ‘Yes’ to the following options,
(i) Allow HSN/SAC details.
(ii) Show all GST tax types.
Step 6 :
Enter the following details in the ‘Tax Rate Details’ sub-screen,
(i) HSN/SAC Details:
Description: Coffee
HSN/SAC : 9019020
5IA PUBLISHERS AND DISTRIBUTORS PVT. LTD. ... .......

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UNIT-2 : Getting Started with GST (Goods) 69

Tax Details:
Taxability : Taxable
Tax type : Rate:
Integrated Tax : 5 %
(ii) Central Tax and State Tax are automatically calculated.
(iii) Press Ctrl + A to Accept or Save.
Step 7 :
The Stock Group appears as shown below,

Step 8 :
Create ‘Fruit Juice’ Stock Group by entering the following details,
Name : Fruit Juice
Under : Primary
Step 9 :
Set ‘Yes’ to ‘Should quantities of items be added’ option.
Step 10 :
Set ‘Yes’ to ‘Set/Alter GST Details’ option
A Tax Rate Details sub-screen appears as shown below,

Step 11 :
Enter the following details in the tax rate details sub-screen,
(i) HSN/SAC Details:
Description : Fruit Juice
HSN/SAC : 20099000
Tax Details:
Taxability : Taxable
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70 THEORY AND PRACTICE OF GST

Tax Type : Rate:
Integrated Tax : 12 %
(ii) Central Tax and state Tax are automatically calculated.
(iii) Press Ctrl + A to Accept or Save.
Step 12 :
The Stock Group appears as shown below,

Step 13 :
Create stock items,
(i) Go to Gateway of Tally > Inventory Info. > Stock Items > Create
(ii) Enter the following details in the Stock Item Creation Screen.
Name : Classic Coffee
Under : Coffee
Units : PCs
Statutory Information:
GST Applicable : Applicable
Set/Alter GST Details ? ‘Yes’
(iii) Enter the following details in the Stock Item Creation Screen,

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70 THEORY AND PRACTICE OF GST

Tax Type : Rate:
Integrated Tax : 12 %
(ii) Central Tax and state Tax are automatically calculated.
(iii) Press Ctrl + A to Accept or Save.
Step 12 :
The Stock Group appears as shown below,
Stock Group Creation

Name Fruit Juice

.-a', as)

Under J Primary

Should quantities of items be added ? Yes

Set/alter GST Details ? Yes

Accept ?

Yes Nc

Step 13 :
Create stock items,
(i) Go to Gateway of Tally > Inventory Info. > Stock Items > Create
(ii) Enter the following details in the Stock Item Creation Screen.
Name : Classic Coffee
Under : Coffee
Units : PCs
Statutory Information:
GST Applicable : Applicable
Set/Alter GST Details ? ‘Yes’
(iii) Enter the following details in the Stock Item Creation Screen,

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UNIT-2 : Getting Started with GST (Goods) 71

(iv) Enter the following details,
Description: Classic Coffee
HSN/SAC : 9019020
Tax Details:
Calculation type : On Value
Taxability : Taxable
Tax Type
Integrated Tax Based on Value 5%
(v) Central Tax and State Tax are automatically calculated 2.5 %
(vi) Press Ctrl + A to accept and go back to Stock Item Creation.
(vii) Select Goods in the Type of Supply field.
(viii) Press Ctrl + A to Accept or Save.
The Stock Item Creation screen appears as shown below,

Flow the same steps to create ‘String Coffee’ Stock Item.

Step 14 :
Create Mango Juice stock Item
(i) Enter the following details in the Stock Item Creation Sub-Screen,
Name : Mango Juice
Under : Fruit Juice
Units : Pcs
Statutory Information:
GST Applicable : Applicable
Set/alter GST Details ? ‘Yes’
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72 THEORY AND PRACTICE OF GST

(ii) A GST Details sub-screen as shown below appears,
Maj
GST Details

GST Details for Stock Item. ■ ;

Mango Juice

HSN/SAC Details

Description Mango Juice

HSN/SAC : 20099000

Is non-GST goods ? No

Tax Details

Calculation type On Value

Taxability Taxable

Tax Type Valuation Type Rate

Integrated Tax Based on Value 12 %
I
Central Tax Based on Value 6 %
State Tax Based on Value 6 %
Cess Based on Value ■g]% ..... . ......................!

(iii) Press Ctrl + A to save and go back to Stock Item Creation sub-screen.
(iv) Select Goods as Type of Supply.
(v) Press Ctrl + A to accept or save.
The Stock Item Creation sub-screen appears as shown below,

(vi) Follow the same steps to create ‘Orange Juice’ Stock Item Ledger.
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UNIT-2 : Getting Started with GST (Goods) 73

2.7.1 Defining GST Rate at Transaction Level

Q18. Explain the process of defining GST Rate at Transaction Level.
Answer :
At the transaction level in Tally. ERP 9, GST rates which are defined at a different level can be overridden or altered.
In rare cases such as when a company deals with local purchase transaction and it barely records transactions relating to
imports, GST rates are defined at transaction level.
Example
Mars & Co. imported 200 Pcs of classic Coffee from Nepal Record inward supply in Tally. ERP.9.
Solution :
Following are the steps involved in recording an inward supply,
Step 1 :
Go to Gateway of Tally > Accounting Vouchers > F9.
Step 2 :
Press F12 and set ‘Yes’ to ‘Allow modification of tax details for GST’ option.
Step 3 :
Press Ctrl + A to Accept or Save.
Step 4 :
Enter supplier invoice no. as INV/01.
Step 5 :
Enter date as 2-7-2018.
Step 6 :
Press ALT + C a ledger creation in the Party A/c name and enter ‘Reemo Traders’
Under : Sundry Creditors
Country : Nepal
Press Ctrl + A to Accept or Save.
The ‘Reemo Traders’ ledger appears as shown below,
Name Resmo Traders
(alias)

Mailing Details
Under : Sundry Creditors Name Reemo Traders
(Currenf ba&lities) • Address
Maintain balances bitl-by-biil ? No
Country : Me pal
Iwertory values are afeted ? No
Provide bank details ? No

Tax Registration Details

PAW No.
Registration type
GSWUIN * - -
Set/alter GST details ?

Accept ?

Yes « No

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74 THEORY AND PRACTICE OF GST
73
Step 7 :
Select Purchase Account in the Purchase ledger field.
A GST Classification Details sub-screen appears as shown below,
Tax Classification details

red. Class ificati o n/Nai u re KHSS3E {imports Taxable

gto
Step 8 :
Select Import Taxable in the Classification/Nature field.
Step 9 :
Press F12 and enable all the options as shown below,
Configuration
Allow override Classification/Nature ? Yes
Allow override ineligible input credit ? Yes
Allow override reverse charge applicability ? Yes
Allow override assessable value ? Yes
Override tax rate ? Yes
Allow override cess valuation type/tax rate based on quantity ? Ues

A detailed GST Classification Details sub-screen appears as shown below,

Tax Classification details

Cl a s sification/N at u re ; imports Taxable f imports Taxable )

Is ineligible for input credit ? No

Is reverse charge applicable ? Yes

Tax Type Valuation Type Rate Rate Per Unit

New f Current} New ( Current) New f Curren t)
Integrated Tax Based on Value ( Based on Value }
Central Tax Based on Value f Based on Value J 9 %
State Tax Based on Value ( Based on Value J 9% fs;
Cess Based on Value ( Based on Value )

Step 10 :
Set ‘Yes’ to ‘Is reverse charge applicable’ Option and enter New Integrated Tax rate as 18%
Step 11 :
Press Ctrl + A to accept.
Step 12 :
Select Classic Coffee in the Name of Item field.
Step 13 :
Enter the Quantity as 200 and Rate as ^100. The Amount is automatically calculated.
A GST Details sub-screen appears as show below
Tax Classification Details

Taxable Value ■■■■■■■I ( 20, 00

Step 14:
Press Enter to skip the Taxable Value and leave it unfilled.
Step 15 :
Press Enter twice to select GST ledgers.
Step 16 :
Select Integrated Tax ledger and the amount is automatically calculated.
Step 17 :
Set ‘Yes’ to Provide GST details option.
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UNIT-2 : Getting Started with GST (Goods) 75

Step 18 :
A Statutory Details sub-screen appears as shown below,

Additional Details : Imports Taxable

Bill of entry no : 1459875______________________ Date : 2Jul-201B

LKADK14598Z5.

Step 19 :
Enter Bill of entry no as 1459875, data as 2/7/18 and Port code LKADK1459875.
Step 20 :
Press Enter to go back to Purchase Voucher.
The Purchase Voucher appears as shown below,

Step 21 :
Press ‘O’ to accept without conflicts.

2.7.2 Hierarchy of Applying Tax Rate Details

Q19. Write about Hierarchy of applying tax rate details.
Answer : Model Paper-Ill, Q10(b)

Tally. ERP 9 allows the users to define tax rates at various levels. It offers the convenience of applying tax rules
at company level, which is the highest level. It also enables the users to define, override or modify tax details at lower
levels such as transaction level, accounting ledger and group level and stock item and group level on basis of company’s
requirement.

Figure: Hierarchy for Applying Tax Details in Tally. ERP 9

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76 THEORY AND PRACTICE OF GST
1. Transactions Level
Tax details can be defined and applied at the time of recording a transaction in Tally. ERP. 9.
For remaining answer refer, Unit-II, Page No. 67, Q.No. 17. (First Paragraph Only).
2. Accounting Ledger Level
In Tally. ERP 9, tax details and tax rate can be defined and applied at the time of creation of According Ledger.
3. Accounting Group Level
Tax rate details can also be applied at the Accounting group level in a specified accounting group such as Bank
account.
4. Stock Item Level
At stock Item level, GST rate details can be defined in stock items during stock item creation or alteration. When
the option ‘Set/Alter GST details’ is set to ‘Yes’, it enables the user to define the HSN code, GST rate, Tax applicability
etc.
5. Stock Group Level
At stock group level, GST rate details can be defined in stock group creation or alteration. To define the HSN code,
GST rate, Tax applicability etc of the stock group, the option ‘set/Alter GST details’ must be set to ‘Yes’. In this level, GST
rate for each stock item can be defined separately.
6. Company Level

The company level lies at the top of the hierarchy of applying tax rate details in Tally. ERP. 9 Tax rate for all the
products which are dealt by the company can be defined by using the path,
(i) Go to Gateway of Tally > F11 + F3 and
(ii) Set ‘Yes’ to ‘Enable Goods and Services Tax (GST)’ option Set ‘Yes’ to ‘Set/alter GST details’.
(iii) In the GST sub-screen, set ‘Yes’ to ‘Set/alter GST rate details’.
(iv) Enter HSN/SAC code, Taxability and Tax Rate for the product
(v) Press Ctrl + A to Accept or Save.
Tax rate is defined at Company level when the company deals one type of goods and the HSN/SAC and tax rate
details do not vary.

2.8. ri
Q20. What is a GST Reports? How is GSTR-1 report generated? Discuss the various activities which can be
performed from GSTR -1 report in Tally.ERP 9.
Answer :

GST Report
A GST report is a document consisting of summary of monthly quarterly or annual returns which includes the details
of all the inward and outward supplies which are filed by a taxable individual registered under GST. It is used for calculating
the GST which is to be paid. It shows a list of transactions which provide a definitive reference to the calculation of GST.
In Tally ERP 9, there are two GST reports. They are GSTR-1 and GSTR-2.
GSTR -1
GSTR -1 is a monthly return comprising the detailed information of all outward supplies which are filed by a taxable
person who is registered under GST. It is in a standardized format which is prescribed by the Taxation Department of India.
It is divided into multiple tables which are used for capturing various types of outward supply.
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UNIT-2 : Getting Started with GST (Goods) 77
In Tally. ERP 9, the details of various outward supplies can be checked. It provides capability of resolving the exception
before the GSTR -1 return is exported. It also enables the users to update the status of every transaction included in the
return on the basis of reconciliation and acceptance status on GSTN portal. It is done by using the Status Reconciliation
option (U : Status Reconciliation).
Generating GSTR -1 Report in Tally. ERP 9

Following are the steps needed for generating GSTR -1 report in Tally. ERP 9,
Step 1 :

Go to Gateway of Tally > Display > Statutory Reports > GST > GSTR-1
Step 2 :
Press ALT + V for a default view.
The GSTR-1 screen appears as shown below,

i GSTR-1 1-Ju!-2018 to 31-Jul-2018

Returns Summary

- Included in returns 2
> Hot relevant for returns 1:
’ Incomplete.-Mismatch tn irtfomatisn (to be ie solved} o
Parti c.u la r s Taxable Value Integrated Tax Central Tax State Tax Amount Cess Amount Total Tax Amount i
Amount Amount

tOutward Supplies

> Local Sales 7.627.00 686.43 686.43 1.372.86

4 Taxable 7.627.99 686.43 686.43 1.372.86
i Sales Taxable 7 627 00 686.43 686 43 1,372 86
t Inter State Sales 16.150.00 2.907.00 2.987.00 ■
; Taxable 76,150.00 2,907.00 2,907.00
: Interstate Sales Taxable 16 150.00 2.907 00 2,907 00
l

Total Outward Supplies 23,777.00 2,907.00 686.43 686.43 4.279.86 i

The Returns summary offers a summarized information of the total vouchers for a specific period.
.The Particulars provide detailed information about the taxable value of the supply (outward).
Activities Performed From GSTR-1 In Tally.ERP 9

The activities which can be performed from GSTR-1 in Tally. ERP 9 are as follows,

Activity Shortcut key Function

Table - wise view ALT +V It offers GST report in table format.
Stat Adjustment ALT + J It records the stat adjustment entry in journal voucher.
Status Reconciliation ALT + U It marks the status of every transaction based their online status.
Return Ctrl + E It exports the GSTR -1 report in the required excel format for a
specified period.
HSN/SAC Summary ALT + N It provides the summary of HSN/SAC code of all stock items.
View Accepted as is Ctrl + A It offers the details of the screen list of vouchers which are
accepted as it is.

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78 THEORY AND PRACTICE OF GST

Q21. Explain the process of generating GSTR-2 report in Tally. Discuss the various activities which can be
performed from GSTR-2 report in Tally. ERP 9.
Answer :

GSTR -2 is a monthly return comprising the detailed information of all inward supplies which are filed by a taxable
person who is registered under GST. It is in a standardized format which is prescribed by the Taxation Department. It is
divided into multiple tables which are used for capturing various types of inward supply.
In Tally. ERP 9, the details of various inward supplies can be checked. It enables the users to resolve any exceptions
in the transaction before the reports are exported. It helps in up dating the status of every transaction included in the return
on the basis of reconciliation and acceptance status on GSTN portal. It is done by using the status reconciliation
option (U_: Status Reconciliation)
Generating GSTR -2 Report in Tally.ERP 9
Following are the steps needed for generating GSTR-2 report in Tally. ERP 9,
Step 1 :
Go to Gateway of Tally > Display > Statutory Reports > GST > GSTR-2
Step 2 :
Press ALT + V for a Default view.
The GSTR -2 screen appears as shown below,

The returns summary offers a summarized information of the total vouchers for a specific period.
The Particulars provide detailed information about the taxable value of the supply (inward).
Activities Performed From GSTR -2 in Tally- ERP 9
The activities which can be performed from GSTR -2 in Tally. ERP 9 as follows,
For remaining answer refer, Unit-II, Page No. 77. Q. No. 20, Topic : Activities Performed from GSTR -1 in Tally.
ERP 9. «
Q22. Explain GSTR-9 in detail.
Answer :

For answer refer Unit-I, Page No. 21, Q.No. 28.

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UNIT-2 : Getting Started with GST (Goods) 79

INTERNAL ASSESSMENT
I. Multiple Choice
1. is the physical substance. [ ]
(a) Good •
(b) Product

(c) Service

(d) Tax
■•• ■
2. Introduction of imposes tax on goods and services. [
(a) Central Tax

(b) State Tax

(c) (a) and (b)

(d) GST

3. All the physical goods mention under GST law are eligible for [
(a) Payment

(b) Taxes •

(c) Receipt

(d) None of the above

4. There are levels in hierarchy of applying tax. [
(a) Two

(b) Three

(c) Four

(d) Six ( ■■
5. is used to record sales returns. 1
(a) Debit note -

(b) Credit note

(c) Both (a) and (b)

(d) None of the above

6. Place of supply is of supplier. [

(a) Location
*
(b) Property
•
(c) State

(d) Country
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THEORY AND PRACTICE OF GST
80 _ _ _____________
7. The are_________ types of place of supply.

(a) Two

(b) Three

(c) Four

(d) Five

8. Cancellation of services are classified into_________types. [ 1

(a) Two

(b) Three

(c) Four

(d) Five

9. ___________ is issued during sale of goods. [ 1

(a) Acquisition Invoice

(b) Cancellation Invoice

(c) Sale Invoice

(d) Purchase Invoice

10. _____ is used to record purchase return. [ 1

(a) Debit note

(b) Credit note

(c) Both (a) and (b)

(d) None of the above

II. Fill in the Blanks

1. Place of supply of goods is the_________ of goods.

2. Place and location of supply will be same in_________ . 1

3. Place and location of supply will be different in .

4. Two separate journal vouchers should be recorded for the opening balance of_________ and____ taxes.

5. ________ _ means intra-state receipt of goods.

6. ______ __ refers to the supply of goods through sale, exchange, transfer, rental etc.

7. '_____ are recorded by using purchase voucher.

8. _________ tax is applicable in interstate outward supply of goods.

9. These are 6 steps in .

10. GSTR stands for_________ .

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UNIT-2 : Getting Started with GST (Goods) 81

I. Multiple Choice

1. (a)

2. (d)

3. (b)

4. (d)

5. (b)

6. (a)

7. (a)

8- (a)

9. (c)

10. (a)

II. Fill in the Blanks

1. Location

2. Intrastate of Supply of Goods

3. Interstate of Supply of Goods

4. Central and State

5. Intrastate Inward Supply of Goods

6. Intrastate Outward Supply of Goods

7. Inward and Outward Supply of Goods

8. Integrated

9. Hierarchy of Applying tax details

10. Goods and Services Tax Return.

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THEORY AND PRACTICE OF GST

82 __ —— _
III. Very Short Questions and Answers
Q1. What do you mean by getting started with Tally?
Answer :

A company has to register for GST in Tally. ERP 9 to carry forward its tax credit to GST and for maintaining the
accounting books according to the requirements for GST compliance. In general, it is difficult to maintain various details
of customers and suppliers of the company with GST. However, Tally ERP 9 easily stores the required details and avails
input tax credit at invoice level. It helps in an.efficient generation of GST reports with high accuracy. It generates GST
complaint invoices effortlessly even for complex transactions. Tally. ERP 9 handles all types of supplies and business
scenarios leading to accurate GST report generation.
Q2. What is GST Report?
Answer :

AGST report is a document consisting of summary of monthly quarterly or annual returns which includes the details
of all the inward and outward supplies which are filed by a taxable individual registered under GST. It is used for calculating
the GST which is to be paid. It shows a list of transactions which provide a definitive reference to the calculation of GST.

In Tally ERP 9, there are two GST reports. They are GSTR-1 and GSTR-2.

Q3. What is Intrastate Supply of Goods?

Answer :

Intra-State Supply of goods refers to the transactions in which the supplier of the goods and the recipient of the
goods belong to the same state or union territory. It means, the transaction takes place within the same state.

Example: Alavi Traders Pvt. Ltd. traded or supplied goods to a trader of same state i.e., Telangana. This transaction
is referred as intra-state supply of goods.
Q4. What is Interstate Supply of Goods?

Answer :

Inter-State Supply of goods refers to the transactions in which location of the supplier of the goods is different
from the location of the recipient of the goods. It means the transaction takes place between different states. Since the
transaction of goods is inter-state i.e., different states as such, ‘Integrated Tax’ charges is applicable.

Example: Alavi Traders Pvt. Ltd. is a trader registered in Telangana. When it supplies goods to a recipient trader in
Allahabad, then it is said to be ‘Inter-State Supply of goods’.
Q5. Draw the hierarchy of applying tax details.
Answer :

Figure: Hierarchy for Applying Tax Details in Tally. ERP 9

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UNIT
RECORDING ADVANCED

3 ENTRIES, GST ADJUSTMENT

AND RETURN FILING

c LEARNING OBJECTIVES
After studying this unit, one would be able to understand,

❖ Accounting of GST Transactions in Tally. ERP 9.

❖ Purchases from Composition and Un-registered Dealers.

❖ Concept of Exports, Imports, Exempted Goods and SEZ Sales.

❖ Mixed and Composite Supply under GST.

❖ GST Reports and Generating GSTR.

❖ Input Tax Credit Set Off and GST Tax Payment.

❖ Modes of Payment and Challan Reconciliation.

❖ Exporting GSTR and Uploading in GSTPortal.

The introduction of GST replaced all the multiple taxes in India. It is the replacement ofVAT, Excise, CST and
other service taxes. According to GST Law every registered business is responsible to prepare and maintain
its accounts based on GST Rates and Provisions. Previously, business persons used to prepare and maintain
their accounts for different taxes separately. For instance, accounts for VAT, accounts for excise etc. However,
^ie GST Law replaced all such accounting requirements and instructed all the registered businesses of India
(Transport, Production, Health Care etc.) to maintain accounts only for one common tax i.e., LIST.

A dealers having an aggregate turnover of less than the recommended amount for purpose of registration
under the GST are referred as Unregistered Dealers (URDs). Tax invoices cannot be issued by unregistered
dealers. URDs cannot change tax or claim input tax credit.

Challan Reconciliation is the reconciliation of the payment details of GST. The tax payment vouchers which
are recorded for payment of GST and other liabilities can be view through a Challan Reconciliation report,.
The Payment details which were left at the time of recording the payment voucher can be defined in challan
reconciliation.

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84 THEORY AND PRACTICE OF GST

PART-A
SHORT QUESTIONS WITH SOLUTIONS
Q1. What do you mean by composite and unregistered dealers?
Answer : Model Paper-I, Q3

Composite Dealers

A dealer having an aggregate turnover of less than ? 1.5 crores during previous year is considered as composition
dealer under composite scheme. However, in some cases, a taxable person is ineligible to become composite dealer despite
of having annual turnover of? 1.5 crores. The cases where the taxable person is ineligible to become composite dealer are,

1. If the taxable person is a supplier of services. However, food and beverages for consumption are exceptional cases.
2. If the taxable person supplies goods through an e-commerce operator.
Unregistered Dealers

A dealers having an aggregate turnover of less than the recommended amount for purpose of registration under the
GST are referred as Unregistered Dealers (URDs). Tax invoices cannot be issued by unregistered dealers. URDs cannot
change tax or claim input tax credit.

The government has initiated the ‘Reverse Charge Mechanism’ for ensuring that the tax is collected when the goods
or services are sold from different unorganized sectors. Under reverse charge, the buyers of goods or services are required
to pay the tax to the government, the responsibility of paying tax is shifted to buyer from supplier.
Q2. What are Exports and Imports?

Answer s Model Paper-I, Q8

Exports

Export can be defined as the supply of goods outside the country. Goods are supplied to recipients outside the
country. In this transaction, the location of the supplier is in one country and the location of recipient of goods/services is
in another country.

Exports are of various natures. Based on their nature, exports ae classified into the following types,
1. Exempt Export

2. Taxable Export
z
3. Exempt Exports Under LUT/Bond
4. Deemed Export.
Imports

Imports can be defined as the goods which are purchased from another country. It refers to all inward supplies of
goods from another country. In case of imports, reverse charges are applicable. The recipient of goods is liable to pay
integrated tax to the government.

Q3. What do you understand by SEZ sales? What are its types?

Answer : Model Paper-ll, Q3

SEZ Sales

SEZ stands for Special Economic Zone. SEZ sales can be defined as sale of goods or services to SEZ. Any outward
supply made to a recipient belonging to SEZ is called an SEZ sale. In Tally.ERP 9, sales voucher is used to record SEZ
sales. Integrated tax is applicable for such sales.
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UNIT-3 : Recording Advanced Entries, GST Adjustment and Return Filing 85

Types of SEZ Sales

Based on the applicability of tax, SEZ sales are divided into the following types,

1. Taxable SEZ Sale

It refers to those SEZ sales in which integrated tax is applicable for both interstate and intrastate parties.

2. Sale Under LUT/Bond

SEZ sales under LUT/Bond are allowed only when the sale is accompanied by a letter of undertaking from the department
for the sale of goods with no payment of duty. Tax is not applicable for such sales.

3. Exempt SEZ Sale

It refers to those SEZ sales which are exempted from any tax or duty. No tax is applicable for exempt SEZ sales.

Q4. Write a short note on mixed and composite supply under GST.
Answer : Model Paper-ll, Q:

The concept of mixed and composite supply has been newly introduced under GST to over come from the problem of
identifying tax rates for combined supply of goods and services. These two concepts helps to identify whether the supplies
made together and they are related or not. It means, supplies of two or more goods and services can either be ‘mixed supply'
or ‘composite supply’. Under GST, the concept of mixed supply is entirely new one, but the concept of composite supph
is similar to the concept ‘Bundled services’ which was under service tax law.

As the GST law defined specific rates for goods and services separately, it is easy to identify the tax rate for particular
goods or services while supplying. However, in some cases, supply of good and services may be connected or may be
supplied together eventhough they are not connected. For example, Air Condition (AC) is supplied with its installation
services. In such cases, the concepts of mixed and composite supply will play a important role in identifying the tax rates
for kind of supplies. ______________________________ J

Q5. Distinguish between Mixed Supply and Composite Supply under GST.

Answer : Model Paper-Ill, 05

Following are the differences between Mixed Supply and Composite Supply under GST,

Basis Mixed Supply Composite Supply

1. Meaning It refers to supply of goods or services or It refers to supply of combination of goods |
combination of two or more goods and or services which are naturally bundled I
services for a single price by a taxable and supplied together during the ordinary 1
person. course of business.
2. Pre-dominant element It does not have any pre-dominant element. It consists of principal supply which acts!
as a pre-dominant.
3. Bundling It is naturally bundled. It is not bundled naturally.
4. Tax Liability Calculation The highest tax rate applicable on either of The tax rate applicable on the principle!
the bundled goods and/or services is taken supply is taken for tax liability calculation.1
for tax liability calculation.

Q6. What are the modes of payment of GST Tax?

Answer :

The Payment of GST Tax can be done either through offline or online mode. Offline payment can be done only
payments up to ?10,000 per challan per tax period.
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86 THEORY AND PRACTICE OF GST
Following are the various modes of payment of GST

Offline Mode Offline Payment can be done through the following,

1. Demand Draft by depositing through Over the Counter
Payment (OTC)from authorized banks.
2. Cash

3. Cheque
Online Mode Online payment can be done through the following,
1. National Electronic Fund Transfer (NEFT) from any
bank.

2. Internet banking through authorized bank.

3. Real Time Gross Settlement (RTGS) from any bank

4. Credit card or Debit card after registering them in a
common portal through the authorized bank.

Q7. Explain briefly about the concept of challan reconciliation, electronic cash and credit ledger.

Answer :

Challan Reconciliation

Challan Reconciliation is the reconciliation of the payment details of GST. The tax payment vouchers which are
recorded for payment of GST and other liabilities can be view through a Challan Reconciliation report. The Payment
details which were left at the time of recording the payment voucher can be defined in challan reconciliation.

Electronic Cash Ledger

An electronic cash ledger is maintained for every registered taxable person on the common portal to credit the
deposited amount. This ledger shall be debited to the extent of payment which is made towards interest, tax penalty, fee
or any other amount.

Electronic Credit Ledger

An electronic credit ledger is maintained for every registered taxable person on the common portal to credit every
claim of input tax credit under it. This ledger shall be debited to the extent of utilization of input tax credit for discharging
the tax and refunding of claims.

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UNIT-3 : Recording Advanced Entries, GST Adjustment and Return Filing 87

PART<B
ESSAY QUESTIONS WITH SOLUTIONS
..... ■ .......................... - ..... -... —. —..... ...... ..... ...... ....... ........
3.1 INTRODUCTION - ACCOUNTING OF GST TRANSACTIONS
Q8. Discuss in detail about the Accounting of GST Transactions.
Answer : Model Paper-I, Q11(a)

The introduction of GST replaced all the multiple taxes in India. It is the replacement of VAT, Excise, CST and other
service taxes. According to GST Law every registered business is responsible to prepare and maintain its accounts based
on GST Rates and Provisions. Previously, business persons used to prepare and maintain their accounts for different taxes
separately. For instance, accounts for VAT, accounts for excise etc. However, the GST Law replaced all such accounting
requirements and instructed all the registered businesses of India (Transport, Production, Health Care etc.) to maintain
accounts only for one common tax i.e., GST.
Following points will help to better understand the rules and procedures for maintaining accounts for GST transactions,
1. Maintenance of Accounts
* The accounts of GST transactions are recorded and maintained by following persons,
(a) Ow ner of business.
(b) Operator of warehouse or godown which is used for storing goods.
(c) Transporter of goods and services.
2. Place of Accounts
The place of maintaining accounts of GST transaction should be the place where the business take place. However,
if more than one place is available then the accounts of such places should be the respective location of business.
3. Audit of Accounts
When the turnover of business exceeds the financial limit mentioned in the GST rules, the accounts should be audited
by a Chartered Accountant.
4. Nature of Accounts
The registered business owner need to maintain the following nature of accounts,
(a) Accounts of production of goods and services.
(b) Accounts of inward and outward supply of goods and services.
(c) Accounts of inventory or stock of goods.
(d) Accounts of availing Input Tax Credit (ITC).
(e) Accounts of output tax payable or paid.
(f) Other prescribed accounts under GST Law.
5. *Type of Accounts
A registered business owner need to maintain the following accounts related to GST other than sales, purchases and
stock accounts,
(a) Input CGST Account.
(b) Output CGST Account.
(c) Input SGST Account.
(d) Output SGST Account.
(e) Input IGST Account.
(f) Output IGST Account.
(g) Electronic Cash Ledger under Government GST portal for paying GST.
(h) Other Accounts,
(i) Accounts of Advances Received and Paid.
(ii) Accounts of Stock or Inventory.
(iii) Monthly Production Accounts and so on.
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88 THEORY AND PRACTICE OF GST

3.2 PURCHASES FROM COMPOSITION DEALER

Q9. Define Composition Dealer. Explain briefly recording of purchases made from composition dealer with
an example.
Answer :
Composition Dealer
A dealer having an aggregate turnover of less than ? 1.5 crores during previous year is considered as composition
dealer under composite scheme. However, in some cases, a taxable person is ineligible to become composite dealer despite
of having annual turnover of ? 1.5 crores. The cases where the taxable person is ineligible to become composite dealer are,
1. If the taxable person is a supplier of services. However, food and beverages for consumption are exceptional cases.
2. If the taxable person supplies goods through an e-commerce operator.
Example:
On 01-05-2018, universal traders purchased HP printers from sole traders (composition dealer)
with Supplier Invoice no. 101. The following are the transaction particulars,
Voucher: Purchase
Item Quantity Rate (?) Amount (?)
HP Printer P1007 15 Nos 7,500 1,12,500
Record the above purchases transactions which are made from the composition dealer and also
define GST rate details at stock item level in Tally.ERP 9.
Solution :
Following are the steps for recording of purchases and defining GST rate details at stock item level in Tally.ERP 9,
Step 1: Create a Company in Tally.ERP 9
With following details,
❖ Company Name: Universal Traders
❖ Address : Plot. No: 312 Galaxy Tower, Koti, Hyderabad, Telangana - 500001
❖ Financial year: 01-04-2018
Step 2: Enabling GST
(i) Go to Gateway of Tally > Press F11 > Statutory and Taxation
(ii) In the ‘Statutory and Taxation’ screen, set ‘Enable Goods and Services Tax (GST)? as ‘Yes’ and Set/alter
GST details? as ‘Yes’.
A GST Details screen appears as shown below,
GST Details

State Telangana
Registration type Regular
GSTIN/UIN JMAAAAAIWHAI/t ?
Applicable from : 1Apr-?S18
Set/alter GST rate details ? No
Enable GST Classifications ? Ho
Provide LUT/Bond details ?No

Enter the details as shown in the above screen.

(iii) Press Ctrl + A to save
Step 3: Creation of Accounting Masters
(a) Create Party Ledger
i i) Go to Gateway of Tally > Accounts Info > Ledgers > Create
(ii) Enter the following details,
❖ Name: Kamal Traders
❖ Under: Sundry Creditors
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UNIT-3 : Recording Advanced Entries, GST Adjustment and Return Filing 89
Mailing Details
❖ Address: Plot No. 122, Grand Building, Hyderabad
❖ Country: India
❖ State: Telangana
❖ Pincode: 500001
❖ Set/alter GST details? “Yes”
GST details screen appears, enter the GST Details as shown below,
GST Details

Registration type Composition

GSTIN/UIN 36AAAAA1974A2Z3
Party Type J Not Applicable
Is a e-Commerce operator ? KZSHBH

(iii) Press Ctrl + A to save.

(b) Create Purchase Ledger
(i) Go to Gateway of Tally > Accounts Info > Ledgers > Create
(ii) Enter the following details,
❖ Name: Purchase from Composition Dealers
❖ Under: Purchase Accounts
Statutory Information
❖ Is GST Applicable? Applicable
❖ Set/alter GST Details? No
❖ Type of Supply: Goods
(iii) Press Ctrl + A to save
Step 4: Creating Inventory and Defining GST Rate at Stock Item Level
Create Stock Item
(i) Go to Gateway of Tally > Inventory Info > Stock Items > Create
(ii) fenter the following details,

❖ Name: HP Printer P1007

❖ Under: Primary
Units: Press Alt + C and create Unit as Nos as shown in the screen below,
Unit Creation (Secondary)

I Type Simple
Symbol : Nos
: Formal name

■ N umber of dec imal plac es EJ

Statutory Information
GST Applicable: Applicable
Set/alter GST details? Yes
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_ THEORY ANj^ACTiCEOT GST

A ‘GST Details’ screen appears as shown below,

Tax Rate Details

HSN/SAC Details

Description HP Printer P1G07

HSN/SAC 84433240

Tax Details
Calculation type : On Value
Taxability _ Taxable
Tax Type Rate
Integrated Tax 18 %
Central Tax 9 %
State Tax 9 %
Cess

Enter the details as shown above.

❖ Types of supply as Goods
To activate HSN/SAC Details, press F12: Configure from GST details screen, Configuration screen appears as
shown below,
Configuration
Cfe-.'.
Allow HSN/SAC details 7
Set type of goods 7 No
Enable reverse charge calculation 7 No
Set ineligible input credit ■ 7 No
Select valuation type 7 No
Show all GST tax types 7 Yes

Make changes as shown above

(iii) Press Ctrl + A to save.
Step 5: Recording Purchases From Composition Dealer
(i) Go to Gateway of Tally > Accounting Vouchers > Click F9: Purchase
(ii) Enter the following details in the Purchase Voucher,
❖ Supplier Invoice no: 101
❖ Date: 01-05-2018 [Press F2 to Change Date]
❖ Party A/c Name: Kamal Traders
A ‘Party Details’ Screen appears
iii) Press Ctrl + A
(iv) Select Purchase from Composition Dealers from list of ledger accounts in the Purchase Ledger Field.
v) Sdfect ‘HP Printer P1007’ from list of Stock Items in the ‘Name of Item’ field.
(vi) Enter quantity as ‘15’ and Rate as ‘7500’, amount will be calculated automatically under ‘Amount’ column.
i vii) Enter transaction information in the narration field or skip it by pressing ‘Enter’.
The ‘Purchase Voucher’ screen appears as shown below,

• iii) Press ‘Enter’ to accept.

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UNIT-3 : Recording Advanced Entries, GST Adjustment and Return Filing 91

Step 6: Viewing GST Report
As it is an inward supply, therefore, it can be viewed in GSTR-2.
To view GSTR-2,
(i) Go to Gateway of Tally > Display > Statutory Reports > GST > GSTR-2
‘GSTR-2’ screen appears as shown below,

(ii) Press enter on Nil Rated Invoices to view Voucher Register. The Voucher Register Screen appears as shown
below,

3.3 PURCHASES FROM UNREGISTERED DEALERS

Q10. Define Unregistered Dealers (URDs). Explain briefly recording of purchases made from unregisteri
dealers with an example.
Answer : Model Paper-ll, Q11

Unregistered Dealers (URDs)

A dealers having an aggregate turnover of less than the recommended amount for purpose of registration under 1
GST are referred as Unregistered Dealers (URDs). Tax invoices cannot be issued by unregistered dealers. URDs earn
change tax or claim input tax credit.
The government has initiated the ‘Reverse Charge Mechanism’ for ensuring that the tax is collected when the got
or services are sold from different unorganized sectors. Under reverse charge, the buyers of goods or services are requii
to pay the tax to the government, the responsibility of paying tax is shifted to buyer from supplier.
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92 THEORY AND PRACTICE OF GST

Example
On 01-05-2018, Universal Traders purchased HP printers from the Reddy Traders (Unregistered Dealer)
with Supplier Invoice No. 205. The following are the transaction particulars,
Voucher: Purchase

Item Quantity Rate (?) Amount (?)

HP Printer P1007 08 Nos 7,600 60,800
On 31-05-2018, Universal Traders paid tax to the government on behalf of reddy traders (Unregistered
Dealer).
Record the above purchase transactions which are made from unregistered dealer.
Solution :

The following are the steps involved in recording the purchase transactions made from unregistered dealer,
Step 1: Creating Accounting Masters
(a) Create Party Ledger
(i) Go to Gateway of Tally > Accounts Info > Ledgers > Create
(ii) Enter the following details,
❖ Name: Reddy Traders
❖ Under: Sundry Creditors
Mailing Address
❖ Address: Plot No: 405, Trendy Complex, Hyderabad
❖ Country: India
❖ State: Telangana
❖ Pincode: 500003
❖ Set/alter GST details? Yes
GST Details screen appears, select ‘Unregistered’ from registration types list under ‘Registration Type’
(iii) Press Ctrl + A to Save.
(b) Create Purchase Ledger
(i) Go to Gateway of Tally > Accounts Info > Ledger > Create.
(ii) Enter the following details,
Name: Purchase from Unregistered Dealers
❖ Under: Purchase Accounts
Statutory Information
❖ Is GST Applicable? Applicable
❖ Set/alter GST Details? No
❖ Types of Supply: Goods
(iii) Press Ctrl + A to Save.
Step 2: Recording Purchases from Unregistered Dealer
i i) Go to Gateway of Tally > Accounting Vouchers > Click F9: Purchase
ii) Enter the following details in the Purchase Voucher,
❖ Supplier Invoice No: 205
❖ Date: 01-05-2018 [Press F2 to Change Date]
❖ Party A/c Name: Reddy Traders
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UNIT-3 : Recording Advanced Entries, GST Adjustment and Return Filing ____ 93
(iii) A ‘Party Details’ screen appears, press Ctrl + A.
(iv) Section ‘Purchase from Unregistered Dealers’ from list of ledger accounts in the purchase ledger.
(v) Select ‘HP Printer P1007’ from list of stock items in the ‘Name of Item’ field.
(vi) Enter ‘Quantity’ as 8 and Rate as 7600, amount will be calculated automatically under ‘Amount’ column.
(vii) To view the tax implication of the transaction, click “A: Tax Analysis.” The ‘Tax Analysis’ screen appears as
shown below,

Tax Analysis

Particulars Taxable Value Tax rate Duty/Tax Value

GST Details

HP Pnnter P1007 (84433240) (50,800.00 W. $44.00

Note: A-xqx-n of Nx sx&ect N ^exe’xe ceexxe

As per Calculation 10,944.00
As per Transaction

(viii) To view in details of tax implication, click ‘F1: Detailed’ in Tax Analysis screen.
The screen which appears after clicking F1: Detailed is shown below,

Tax Analysis

Particulars- Taxable Value Tax rate Duty/Tax Value

GST Details

Purchase From Unregistered Dealer - Taxable 60,800.00 10,944.00

HP Printer P100? (84433240)
/fesr Va-’ue f Purchase Valve 80.800 00 J €0.800.00
Gear's- Tax 9% 5.472.00
State Tax 5.472.00

fvofe. Amcunf of fax su&tecf to averse

As per Calculation 10.944.00
As per Transaction

(ix) Press ‘Esc’ Key to go back to Purchase Voucher transaction screen.

(x) Enter transaction information in the ‘Narration’ field or skip it by pressing ‘Enter’.
The Purchase Voucher screen appears as shown below,
Accounting Vos 2, H
1-May-2018
Date 1-May-.2018 Tuesday

Party A/c name Reddy Traders

Cement oa/ance
Purchase ledger Purchase From Unregistered Dealers
Name of Item Quantity Rate per Amount

HP Printer P1007 8.000 Mos 7,600.00 Nos 60,800.00

J End of List

Narration: Accept ?

Yes " No

(xi) Press ‘Enter’ to accept.

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94 THEORY AND PRACTICE OF GST

Step 3: Viewing GST Report
It is an Inward Supply, therefore, it can be viewed in GSTR-2
To view GSTR-2,
i i) Go to Gateway of Tally > Display > Statutory Reports > GST > GSTR-2
‘GSTR-2’ screen appears as shown below,

Enter on B2B Invoices to view Voucher Register.

The ‘Voucher Register’ screen appears as shown below,

Step 4: Record Journal Voucher to Generate Liability and Input Tax Credit
(a) Create Central Tax Ledger
(i) Go to Gateway of Tally > Accounts Info > Ledgers > Create
'ii) Enter the details in ‘Central Tax’ ledger as shown below,

3
jr

.iii) Press Enter to Accept.

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UNIT-3 : Recording Advanced Entries, GST Adjustment and Return Filing 95

(b) Create State Tax Ledger
(i) Go to Gateway of Tally > Accounts Info > Ledgers > Create
(ii) Enter the details in State Tax Ledger as shown below,

(iii) Press Enter to Accept.

(c) Recording Adjustment Entry
(i) Go to Gateway of Tally > Accounting Vouchers > Click F7: Journal
(ii) Click ‘F2: Date’ to change the date as 01 -05-2018
(iii) Click ‘F12: Configure’, Journal Standard Configuration screen appears, set ‘Yes’ to ‘Use Cr/Dr instead of To/By
during entry’.
(iv) Click ‘J: Stat Adjustment’, select the following in the ‘Stat Adjustment’ screen as shown below,
Star Adjustment

Type of duty/tax GST

Mature of adjustment Increase of Tax Liability &. Input Tax Credit

Additional Details

Additional Details Purchase under Reverse Charge

(v) Under ‘Particulars field’, select Central Tax from list of Ledger Accounts and enter ‘5,472’ under ‘Debit’
column. Similarly,
❖ Select State Tax and enter ‘5,472’ under ‘Debit’ column.
❖ Select Central Tax and enter ‘5,472’ under ‘Debit’ column.
❖ Select State Tax and enter ‘5,472’ under ‘Credit’ column.
❖ Select Central Tax and enter ‘5472’ under ‘Credit’ column.
(vi) /Enter Transaction information in the ‘Narration’ field or skip it by pressing Enter.
The ‘Journal Voucher’ screen ■s as shown below,

pHKBESEEOMMI no. f 1-f4ay-201B

Tuesday
Used for. Increase of Tax Liability & Input Tax Credit
(Addt-c^a^ Deta-:s Purchase ur.der Re, erse Charge)

Particulars Debit Credit

'.Dr Central Tax 5,472.00

CvrSs' 0.00 Dr
State Tax 5,472.00
Cur Bai 0.00 Dr
Cr Central Tax 5,472.00
BaT 0,00 Dr
State Tax 5.472.00
Ov*- Ba- 0 00 Dr

i
I Narration 1 0.g44J
Accept ?

Ye® : He?

(vii) Press Enter to Accept.

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96 ~ _ THEORY AND PRACTICE OF GST

(d) Create Bank Ledger
(i) Go to Gateway of Tally > Accounts Info > Ledgers > Create
(ii) Enter the following details,
❖ Name: Indian Bank
❖ Under: Bank Accounts
❖ Opening Balance: 6,00,000
(iii) Press Ctrl + A to Save.
Step 5: Recording Payment Transaction
(i) Go to Gateway of Tally > Accounting Vouchers > Click F5: Payment.
(ii) Select ‘Indian Bank’ from ‘List of Ledger Accounts’ in ‘Account’ Field.
(iii) Select ‘Reddy Traders’ from ‘List of ledger Accounts’ under Particulars and enter ‘60,800’ under ‘Amount’
columns. A ‘Bill-Wise Details’ For Reddy Traders Screen appears as shown below,
Reddy Traders
Bill-wise Details tor
Upto ? SO.800.00 Dr
Type of Ref Name Dug Date or Amount Dr/ :
Method of Adj redit Days Cr
1-May-2018)
Advance
REEEE9HM I
New Ref
On Account

(iv) Select ‘Agst Ref’ from list of Method of Adj by pressing enter. A Pending Bills screen appears as shown below,
Bill-wise Details for Reddy Traders
Upto. ? 60.800.00 Dr
Type of Ref Name 'DueDate or Amount Dr/
Credit Davs Cr

Agst Ref

(v) Select the given pending bill by pressing enter.

(vi) Press Ctrl + A to Save.
(vii) In the accounting voucher creation screen, keep pressing Enter, till bank allocation box appears,
(viii) ^Press Ctrl + A
(ix) Enter transaction information in the ‘Narration’ field or skip it by pressing ‘Enter’.
The ‘Payment Voucher’ screen appears as shown below,

1-May-201B
T uesdayi

Account Indian Bank •

Gto-Ss 5.39.200.00 Dr
Particulars Amount!

Reddy Traders 60,800.00

0.00 Dr
Agst Ref 205 60,800.00 Dr

narration Rn pnn no.

■
Accept ?

cr Mo

(x) Press ‘Enter’ to Accept.

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UNIT-3 : Recording Advanced Entries, GST Adjustment and Return Filing 97

Step 6: Payment of Tax to Department
(i) Go to Gateway of Tally > Accounting Vouchers > Click F5: Payment
(ii) Click ‘F2: Date to change the date as 31 -05-2018.
(iii) Click‘S: Stat Payment’ in order to have Statutory Payment sub-screen.
(iv) Enter the details in the Statutory Payment sub-screen as shown below,
Statutory Payment

Type of Payment
Tax Type GST
Period From 1-May-2018 To ■* Any ■ • . .
Payment Type Advance
Recipient Liability
Regular

(V) Under ‘Account’ field, select ‘Indian Bank’ from ‘List of Ledger Accounts’,
(vi) Under ‘Particulars’ field, select ‘Central Tax’ from List of Ledger Accounts and enter 5,472 in the ‘Amount’
column.
(vii) Select ‘State Tax’ from ‘List of Ledger Accounts and enter’ 5,472 in the ‘Amount Column’.
(viii) Set ‘Yes’ to ‘Provide GST Details’ in order to define bank details. The ‘Bank Details’ screen appears as shown
below,
Bank Details

Mode of payment Net Banking - (E-Payments)

Name of the Bank Indian Bank
Common Portal Identification NumberiCPINf 13417600816513
Challan Identification NumberfCIN)
I
BRN/UTR Indian176171
4
Payment date 02-05-2018

(ix) Enter the details as shown in above screen.

(X) Enter transaction information in the ‘Narration’ field or skip it by pressing ‘Enter’.
The ‘State Payment’ Voucher screen appears as shown below, t
31-May-2018
Thursday I
Statutory payment for: GST
(Payment Type: Recipient Liability?

Account ■ Indian Bank

Cu Sa 6.79.224.00 Dr
Particulars Amount

Central Tax 5.472.00

Cur Sa?. 28,692.00 Dr
State Tax 5.472.00
Cur Bai. 28,692,00 Dr

Provide GST Details Yes

Narration-.

Yes No

(xi) Press ‘Enter’ to Accept.

(d) Create Bank Ledger
(i) Go to Gateway of Tally > Accounts Info > Ledgers > Create
(ii) Enter the following details,
❖ Name: Indian Bank
❖ Under: Bank Accounts
❖ Opening Balance: 6,00,000
(iii) Press Ctrl + A to save.
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98 THEORY AND PRACTICE OF GST

3.4 EXPORTS_________
Q11. Define Exports. What are the various types of exports and their Tax Applicability?
Answer: Model Paper-I, Q11(b)

Exports
Exports can be defined as the supply of goods outside the country. Goods are supplied to recipients outside the
country. In this transaction, the location of the supplier is in one country and the location of recipient of goods/services is
in another country.
Types of Exports
<
Exports are of various natures. Based on their nature, exports ae classified into the following types,
1. Exempt Export
Exempt exports refers to those export transactions which are exempted from tax applicability.
Tax Applicability: None
2. Taxable Export
Taxable exports refers to those export transactions which are taxable under GST.
Tax Applicability: Integrated Tax
3. Exempt Exports Under LUT/Bond
It refers to the exports through LUT/BOND, which are applicable only when accompanied by a letter of undertaking
with the export department without the payment of duty.
Tax Applicability: None
4. Deemed Export
Deemed exports are those exports in which the payment is received in the country while the goods which are supplied
do not leave the country. The goods are manufactured and supplied within the country. The supply ofgoods is to the end exporters.
3.4.1 Exports Through LUT/Bond
Q12. What do you mean by exports through LUT/Bond? Give example.
Answer :
Exports Through LUT/Bond
Exports of goods through LUT/Bond are exempted from Tax. This type of export is applicable when the exporter
has signed up a letter of undertaking with the department for exporting goods without paying duty.
Example
On 31-05-2018, Universal Traders exported HP Printers to Quest Traders, Malaysia under LUT. The
following are the transaction particulars.
Voucher: Sales
Item Quantity Rate (?) Amount (?)
HP Printer P1007 06 8,200 49,200
Record the export transactions in the books of account.
Solution :
Following are the steps for recording the export transactions,
Step 1: Creating Accounting Masters
(a) Create Party Ledger
(i) Go to Gateway of Tally > Accounts Info > Ledgers > Create
(ii) Enter the following details,
❖ Name: Quest Traders
❖ Under: Sundry Debtors
❖ Country: Malaysia
(iii) Press Ctrl + A to Save.
SIA PUBLISHERS AND DISTRIBUTORS PVT. LTD. ■ -

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UNIT-3 : Recording Advanced Entries, GST Adjustment and Return Filing 99

(b) Create Sales Export Ledger
(i) Go to Gateway of Tally > Accounts Info > Ledgers > Create
(ii) Enter the following details,
❖ Name: Sales Export
❖ Under: Sales Accounts
Statutory Information
❖ Is GST Applicable? Applicable
❖ Set/alter GST Details? Yes
A ‘GST Details’ screen appears as shown below,

Enter the details as shown above.

❖ Types of Supply: Goods
(iii) Press Ctrl + A to Save.
Step 2: Recording Exports Under LUT/Bond
(i) Go to Gateway of Tally > Accounting Vouchers > Click F8: Sales.
(ii) Ensure sales voucher is in item invoice mode or press Alt + I.
(iii) Click ‘F2: Date’ to change the date as 31-05-2018.
(iv) Enter ‘UT/18/01’ in ‘Reference no’, field.
(v) Select Quest Traders in the Party A/c name field.
(vi) Click A: Accept to accept Party Details screen.
(vii) Select Sales Export in Sales Ledger field.
(viii) Select ‘HP Printer P1007’ from ‘List of Stock Items’ in the ‘Name of Item’ field.
(ix) Enter ‘Quantity’ as ‘6’ and ‘Rate’ as 8,200 amount will be calculated automatically under ‘Amount’ column.
(x) Set ‘Yes’ to ‘Provide GST Details’.
‘Additional Details: Exports Taxable’ screen appears as shown below,
Additional Details: Exports LUT/Bond

Shipping bill no. 123987 Date 31-05-2018.

Enter the details as shown above.

(xi) Enter transaction information in the ‘Narration’ field or skip it by pressing ‘Enter’.
SIA PUBLISHERS AND DISTRIBUTORS PVT. LTD

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100 THEORY AND PRACTICE OF GST
The ‘Sales Voucher’ Screen appears as shown below,

(xii) Press‘Enter’to Accept.

Step 3: Viewing GST Report
It is an outward supply, therefore it can be viewed in GSTR-1
To view GSTR-1,
(i) Go to Gateway of Tally > Display > Statutory Reports > GST > GSTR-1.
GSTR-1’ screen appears as shown below,

(ii) To view the ‘Voucher Register’, press ‘Enter’ on Exports Invoices.

3.4.2 Exports Taxable
Q13. Define Export Taxable. Explain Accounting of taxable exports with an example.
Answer :
Export Taxable
Export taxable can be defined as the exports which are taxable under GST. These exports attract Integrated Tax.
Accounting of Taxable Exports
Example
On 01-06-2018, Universal Traders exported taxable HP Printers to Sam Traders, Nigeria and charged
integrated tax @ 18%. The following are the transaction particulars,
Voucher: Sales
Item Quantity Rate (?) Amount (?)
HP Printer P1007 5 8,600 43,000
Record the taxable export transactions.
SIA PUBLISHERS AND DISTRIBUTORS PVT. LTD. _______________

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UNIT-3 : Recording Advanced Entries, GST Adjustment and Return Filing 101
Solution :
Following are the steps for recording taxable export transactions,
Step 1: Creating Accounting Masters
(a) Create Party Ledger
(i) Go to Gateway of Tally > Accounts Info > Ledgers > Create
(ii) Enter the following details,
❖ Name: Sam Traders
❖ Under: Sundry Debtors
❖ Country: Nigeria
(iii) Process Ctrl + A to Save.
(b) Create Integrated Tax Ledger
(i) Go to Gateway of Tally > Accounts Info > Ledgers > Create
(ii) Enter the following details,
❖ Name: Integrated Tax .r*
❖ Under: Duties and Taxes ©j..:
❖ Types of duty/tax: GST
❖ Tax Type: Integrated Tax
❖ Percentage of Calculation ? 0 %
❖ Rounding Method: Not Applicable
(iii) Press Ctrl + A to Save.
(c) Create Exports Taxable Ledger
(i) Go to Gateway of Tally > Accounts Info > Ledgers > Create
(ii) Enter the following details,
❖ Name: Exports Taxable
❖ Under: Sales Accounts
Statutory Information
❖ GST Applicable: Applicable
❖ Set/Alter GST Details ? Yes
^A ‘GST Details’ screen appears as shown below,

Enter the details as shown above

❖ Type of Supply: Goods
(iii) Press Ctrl + A to Save.
SIA PUBLISHERS AND DISTRIBUTORS PVT. LTD.

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102 THEORY AND PRACTICE OF GST

Step 2: Recording Exports Taxable
(i) Go to Gateway of Tally > Accounting Vouchers > Click F8: Sales.
(ii) Ensure Sales Voucher is in Item Invoice mode or press Alt + I.
(iii) Click ‘F2: Date’ to change the date as 01-06-2018.
(iv) Enter ‘UT/18/02’ in ‘Reference no.’ Field.
(v) Select ‘Sam Traders’ in the ‘Party A/c Name’ field.
(vi) Click ‘A: Accept’ to accept party details screen.
(vii) Select ‘Exports Taxable’ in ‘Sales Ledger’ field.
(viii) Select ‘HP Printer P1007’ from ‘List of Stock Items’ in the ‘Name of Item’ field.
(ix) Enter ‘Quantity’ as ‘5’ and ‘Rate’ as ‘8,600’, amount will be calculated automatically under ‘Amount’ column.
(x) Select ‘Integrated Tax’ Ledger from ‘List of Accounts’ in the ‘Name of Item’ field, the amount of tax under
‘Amount’ column is taken automatically.
(xi) Set ‘Yes’ to ‘Provide GST Details’.
‘Additional Details: Exports Taxable’ Screen appears as shown below,
Additional Details : Exports Taxable

Shipping bill no. : 321789 Date ai-w-2tm

*
Enter the details as shown above.
(xii) To view ‘Tax Analysis’, click ‘A: Tax Analysis’ or press Alt + A.
txiii) To view in detailed mode, click ‘F1: Detailed’ or press ‘Alt + FT, the ‘Tax Analysis’ screen appears as shown
below,

Tax Analysis

Particulars Taxable Value Tax rate Duty/Tax Value

GST Details

HP Printer P10O7 (84433240) 43.000.00 7.740.00

Item Value (Sales Value 43.000.00 j 43.000.00
Integrated Tan 18% 7,740.00

Total 7,740.00

(xvi) go back to Sales Voucher screen, press ‘Esc’.

(xv) Press F12 and ensure that the option ‘Use defauts for bill allocations’ is set to ‘No’.
(xvi) A ‘Bill-Wise Details for: Sam Traders’ screen appears as shown below,

Bill-wise Details for: Sam Traders

Upto 7 50,740.00 Dr
Type of Ref Name Due Date, or Amount Dr/
Credit Days Cr
t'wef: Uun-2018)

New Ref UT/18/02 MEEEESDr

50,740.00 Dr

Enter the details as shown above.

(xvii) Enter transaction information in the ‘Narration’ field or skip it by pressing ‘Enter’.
SIA PUBLISHERS AND DISTRIBUTORS PVT. LTD.________________ ______

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UNIT-3 : Recording Advanced Entries, GST Adjustment and Return Filing 103
(xviii) The ‘Sales Voucher’ screen appears as shown below,__________________ _______
Mn ?
Reference no UT«f18.-'O2 Friday

Party A/c name Sam Traders

Cumen/ ba'a^-ca .*
Saies ledger Exports Taxable

Name of Item Quantity Rate per Amount

HP Printer P1007 5.000 Nos 8,600.00 Nos 43,000.00

Integrated Tax 7,740.00

Provide GST details Yes

5000 Nos Accept ?

■ - - x No

(xix) Press ‘Enter’ to accept.

Step 3: Viewing GST Report
It is an outward supply, therefore, it can be viewed in GSTR-1
To view GSTR-1,
(i) Go to Gateway of Tally > Display > Statutory Reports > GST > GSTR-1.
‘GSTR-T screen appears as shown below,

• 12 SetoT of Tax Daid against ,

■ i Advances

(ii) To view the ‘Voucher Register’ press ‘Enter’ on ‘Exports Invoices’.______________________________

3.5 IMPORTS ______________ _________________________
Q14TDefine import. Explain accounting of imports in Tally.ERP 9 with an example.
Answer :
Import
Imports can be defined as the goods which are purchased from another country. It refers to all inward supplies oi
goods from another country. In case of imports, reverse charges are applicable. The recipient of goods is liable to pay
integrated tax to the government.
Accounting of Imports in Tally.ERP 9
Accounting of imports in Tally.ERP 9 can be explained by using the following example,
Example
On 01-06-2018, Universal Traders imported taxable HP Printers from Beam Traders, Ireland. The following
are the transaction particulars,
Voucher Purchase
Item Quantity Rate (?) Amount (?)
HP Printer 1007 12 7,700 92,400
Record the above import transactions in the Tally.ERP 9.
- - ■ ■ ■' • ■ 5IIA PUBLISHERS AND DISTRIBUTORS PVT. LTD

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104 THEORY AND PRACTICE OF GST

Solution :
Following are the steps for recording the imports in Tally.ERP 9:

Step-1: Creating Accounting Masters

(a) Create Party Ledger

(i) Go to Gateway of Tally > Accounts Info > Ledgers > Create
(ii) Enter the following details,
❖ Name: Beam Traders
❖ Under: Sundry Creditors
❖ Country: Ireland
(iii) Press Ctrl+A to save.

t b) Create Imports Ledger

(i) Enter the following details,
❖ Name: Imports
❖ Under: Purchase Account
Statutory Information
❖ Is GST applicable? Applicable
❖ Set/alter GST details? Yes
A ‘GST Details’ screen appears as shown below,
Tax Rate Details

HSN/SAC Details ♦

Description HP Printer P1007

HSN/SAC 84433240
Nature of transaction Imports Taxable

Tax Details

Taxability Taxable
Is reverse charge applicable ? Yes
r
Tax Type Rate
Integrated Tax 18 %
Central Tax 9 %
State Tax 9 %
Cess ■3%

Press F12: Configure to set option ‘Enable reverse charge calculation’ to ‘Yes’ and enter the details as
shown above’.
❖ Type of Supply: Goods
(ii) Press Ctrl + A to save.

Step-2: Recording Import Transactions

i) Go to Gateway of Tally > Accounting Vouchers > Click F9: Purchase.
ii) Click ‘F2 Date’ to change the date as 01 -06-2018.
5IA PUBLISHERSAND DISTRIBUTORS PVT. LTD. „ ...... -

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UNIT-3 : Recording Advanced Entries, GST Adjustment and Return Filing 105
(iii) Enter ‘123’ in ‘Supplier Invoice no’.
(iv) Select ‘Beam Traders’ in the ‘Party A/c name’ field.
(v) Click ‘A: Accept’ to accept party details screen.
(vi) Select ‘Import’ in ‘Purchase Ledger’ field.
(vii) Select ‘HP Printer P1007’ from ‘List of Stock Items’ in the ‘Name of Item’ field.
(viii) Enter ‘Quantity’ as ‘12’ ‘Rate’ as 7,700, amount will be calculated automatically under ‘Amount’ column.
(ix) To view ‘Tax Analysis’, click A: Tax Analysis or press Alt + A.
(x) To view in detailed mode, click F1: Detailed or press ‘Alt + Fl ’.
The “Tax Analysis’ screen appears as shown below,
1 Tax Analysis Universal Traders Ctrl + M El

Tax Analysis

Particulars Taxable Value Tax rate Duty/Tax Value

GST Details

HP Printer P1007 (84433240) 92.400.00 16.632.00

item Value ( Purchase Value 92.400.001 92.400.00
integrated Tax 18% 16.632.00

Note: Amount of tax subject to reverse charge

As per Calculation 16,632.0C

As per Transaction

(xi) To go back to Purchase Voucher screen, press Esc.

(xii) Press ‘Enter’ on the ‘Amount Field’, ‘Tax Classification Details’ screen appears as shown below,

Tax Classification Details

Taxable Value ■■K2C3E3 ( 92.4oo. oo i

(xiii) Set ‘Yes’ to ‘Provide GST Details’. ‘Additional Details: Import Taxable’ screen appears as shown below,
Additional Details : Imports Taxable

Bill of entry no 221555 Date P1t>6 2018

Enter the details as shown above.

(xiv) A ‘Bill Wise Details for: Beam Traders’ screen appears as shown below,

Enter the details as shown above.

(xiv) Enter transaction information in the ‘Narration’ field or skip it by pressing ‘Enter’.
------ —------- - SIA PUBLISHERS AND DISTRIBUTORS PVT. LTD

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106 THEORY AND PRACTICE OF GST
The ‘Purchase Voucher’ screen appears as shown below,

Purchase No 3 1Jun-2018
er invoice no.. 123 Date . 1-Jun-2018 Friday

-?r-y A/c name Beam Traders

'. ~s',t balance
- . chase ledger Imports
tame of Item_______________________________________________________________________________________ Quantity______ Rate per________ Amount

-P Printer P1007 12.000 Nos 7,700.00 Nos 92,400.00

End of List

; —.’de GST details Yes

nation: 12.000 Nos Accept ?

Yes or Ho

(xvi) Press ‘Enter’ to accept.

Step-3: Viewing GST Report
It is an inward supply, therefore, it can be viewed in GSTR-2.
To view GSTR-2,
(i) Go to Gateway of Tally > Display > Statutory Reports > GST > GSTR-2
‘GSTR-2’ screen appears as shown below,

(ii) To view the ‘Voucher Register’, press ‘Enter’ on ‘Import of Goods Invoices’.
Step-4: Record Journal Voucher to Generate Liability
(a) Create Purchase Expenses Ledger
(i) Go to Gateway of Tally > Accounting Info > Ledgers > Create
5IA PUBLISHERS AND DISTRIBUTORS PVT. LTD. ----------

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UNIT-3 : Recording Advanced Entries, GST Adjustment and Return Filing 107
(ii) Enter the details in ‘Purchase Expenses’ ledger as shown below,
Name Purchase Expenses Total Opening Balance

6,00,000.00 Dr

Difference
6,00.000.00 Dr
Mailing Details
Under Indirect Expenses Name
Address
Inventory values are affected ? Mo

Country

Statutory information
Provide bank details : No
Is GST Applicable ? J Not Applicable
Set/alter GST Details ? No Tax Registration Details
PAN/lTNo
Include in assessable value calculation for J Not Applicable

Accept ?
Opening Balance (on 1-Apr-2018): Yes or No

(iii) Press ‘Enter’ to accept.

(b) Recording Journal Entry
(i) Go to Gateway of Tally > Accounting Vouchers > click F7: Journal
(ii) Click ‘F2: Date’ to change the date as 02-06-2018
(iii) Click ‘J: Stat Adjustment’ select the following in the ‘Stat Adjustment’ sub-screen as shown below,
Stat Adjustment

Type of duty/tax GST

Nature of adjustment Increase of Tax Liability

Additional Details

Additional Details jm ports

(iv) Under particulars select ‘Purchase Expenses’ ledger from ‘List of Ledger Accounts’ and enter ‘16,632’ under
‘Debit’ column.
(v) Select ‘Integrated Tax’ from ‘list of ledgers account’ and enter ‘16,632’ under ‘Credit’ column.
(vi) Enter transaction information in the ‘Narration’ field or skip it by pressing ‘Enter’
^The ‘Journal Voucher’ screen appears as shown below,

(vii) Press ‘Enter’ to Accept.

. -.......... SIA PUBLISHERS AND DISTRIBUTORS PVT. LTD

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1U8 THEORY AND PRACTICE OF GST
Step-5: Recording Payment Transaction
d) Go to Gateway of Tally > Accounting Vouchers > Click F5: Payment
i ii) Click ‘F2: Date’ to change the date as 02-06-2018
ii) Select ‘Indian Bank’ from ‘List of Leddger Accounts in ‘Account’ field.
iv) Select ‘Beam Traders’ from ‘List of Ledger Accounts’ under ‘Particulars’ and enter ‘92,400’ under,‘Amount’
column. A ‘Bill-wise Details’ screen appears as shown below,

Enter the details as shown above.

(v) Enter transaction information in the ‘Narration’ field or skip it by pressing ‘Enter’.
The ‘Payment Voucher’ screen appears as shown below,
Payment 2-Jun-2018
Saturday

Account Indian Bank

Cur Bal. 4,35,866.00 Dr
Particulars Amount

Beam Traders 92,400.00

Cur Bal: 0.00 Dr
Agst Ref 123 92,400.00 Dr

Narration —a? Ann on

Accept ?

Yes c; No

(vi) Press ‘Enter’ to Accept.

Step-6: Payment of Tax to Department

(i) To tp Gateway of Tally > Accounting Vouchers > Click F5: Payment.
(ii) Click ‘F2: Date’ to change the date as 02-06-2018.
(iii) Click‘S: Stat Payment’ in order to have Statutory Payment sub-screen.
(iv) Enter the details in the ‘Statutory Payment’ sub-screen as shown below,

Statutory Payment

Tax Type
Period From To
Payment Type Eegular

(v) Under ‘Account’ field, select ‘Indian Bank’ from ‘List of Ledger Accounts’.
SIA PUBLISHERS AND DISTRIBUTORS PVT. LTD. _______

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UNIT-3 : Recording Advanced Entries, GST Adjustment and Return Filing 109
(vi) Under ‘Particulars’ field, select ‘Integrated Tax’ and enter ‘16,632’ in the ‘Amount’ column.
(vii) Set ‘Yes’ to ‘Provide GST Details’ in order to define bank details. The ‘Bank Details’ screen appears as shown
below,
Bank Details

Mode of payment Net Banking - (E-Payments)

Name of the Bank Indian Bank
Common Portal Identification Number(CPIN) 13417600816513
Challan Identification NumberfCINj
BRN/UTR Indian176171
Payment date 02-06-201

(viii) Enter the details as shown in above screen.

(ix) Enter transaction information in the ‘Narration’ field or skip it by pressing ‘Enter’
The ‘Payment Voucher’ screen appears as shown below,
Nh-i 4 2-Jun-2018
Saturday
Statutory payment for. GST
(Payment Type: Recipient liability}
*
I Account: Indian Bank
Cur Bal. 4.19.224.00 Dr
Particulars Amount

Integrated Tax 16,632.00

Cur Ba!. 7.740.00 Cr

Provide GST Details Yes

Narration: . .ifi.ar.2 no.

Accept ?

Yes or Ne

(x) Press ‘Enter’ to Accept.

Step-7: Recording Journal Voucher to Generate Input Tax Credit

(i) Go to Gateway of Tally > Accounting Vouchers > Click F7: Journal.
(ii) f Click ‘F2: Date’ to change the date as 02-06-2018.
(iii) Click ‘J: Stat Adjustment’, select the following in the ‘Stat Adjustment’ sub-screen as shown below,
Stat Adjustment

Type of duty/tax GST

Nature of adjustment Increase of Input Tax Credit

Additional Details

Additional Details rts

(iv) Under Particulars, select ‘Integrated Tax’ from ‘List of Ledger Accounts’ and enter ‘16,632’ under
‘Debit’ column.
(v) Select ‘Purchase Expenses’ from ‘List of Ledger Account’ and enter ‘16,632’ under ‘Credit’ column.
(vi) Enter transaction information in the ‘Narration’ field or skip it by pressing ‘Enter’.
________ _ _________________________ SiA PUBLISHERSAND DISTRIBUTORS PVT. LTD

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110 THEORY AND PRACTICE OF GST

The ‘Journal Voucher’ screen appears as shown below,

vii) Press ‘Enter’ to accept.

3.6 EXEMPTED GOODS

Q15. What do you mean by exempted goods? Explain accounting of exempt purchases with an example,
tnswer :
Exempted Goods
Exempted goods refer to those goods which are not taxable. Taxability of these goods is considered as exempt. The
interstate or local purchases of goods are exempted from GST.
Accounting of exempt purchases in Tally.ERP 9
Accounting of exempt purchases in Tally.ERP 9 can be explained by using the following example.
Example
On 02-06-2018, Universal Traders purchased the following exempted goods from Lotus Traders,
Hyderabad with supplier invoice number 014.
Voucher: Purchase

Item Quantity Rate (?) Amount (?)

Stamps 120 255 30,600
Record the above transactions in Tally.ERP 9.
Solution :
Fallowing are the steps for recording the purchase of exempted goods in Tally.ERP 9,
Step-1: Creating Accounting Masters
(a) Create Party Ledger
(i) Go to Gateway of Tally > Accounts Info > Ledgers > Create
(ii) Enter the following details,
❖ Name: Lotus Traders
❖ Under Sundry Creditors
❖ Set/alter GST details ? “Yes”
A ‘GST Details’ screen appears as shown below,
GST Details

Registration type Regular

GSTIN/UIN 36CCCCC1877A2Z6
Party Type J Not Applicable
Is a e-Commerce operator ? No

SIA PUBLISHERS AND DISTRIBUTORS PVT. LTD.

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UNIT-3 : Recording Advanced Entries, GST Adjustment and Return Filing Ill
Enter the GST details as shown above.
❖ Type of Supply: Goods
(iii) Press Ctrl + A to save.

(b) Create Purchase Exempt Ledger

(i) Enter the following details,
❖ Name: Purchase Exempt
❖ Under: Purchase Accounts
Statutory Information
❖ Is GST applicable? Applicable
❖ Set/alter GST Details? Yes
‘Tax Rate Details’ sub-screen appears as shown below,

Tax Rate Details

HSN/SAC Details

Description
HSN/SAC 4802/4907
Nature of transaction Purchase Exempt

Tax Details Taxability

(From 1-Apr-2018)
J Unknown
Taxability Exempt Exempt
| Nil Rated
Is reverse charge applicable ? No | Taxable |
Tax Type Rate i............. „... i
integrated Tax 0 %
Central Tax 0 %
|
State Tax o % •
Cess 0 % 1

Enter the details as shown above.

❖ Type of Supply: Goods
(ii) Press Ctrl + A to save.

Step-2: Creating Inventory Masters

Create Stock Item

(i) Go to Gateway of Tally > Inventory Info. > Stock Items > Create
(ii) Enter the following details,
❖ Name: Stamps
❖ Under: Primary
❖ Units: Nos
Statutory Information
❖ GST applicable? Applicable
❖ Set/alter GST details? Yes
SIA PUBLISHERS AND DISTRIBUTORS PVT. L'

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.12 THEORY AND PRACTICE OF GST
Ill
A ‘GST Details’ screen appears as shown below,

Tax Rate Details

HSN/SAC Details

Description Stam
HSN/SAC 4802/4907

Tax Details
(From 1-Apr-2018)
Calculation type On Value
Taxability Exempt
Is reverse charge applicable ? No

Tax Type Rate

Integrated Tax 0 %
Central Tax 0 %
State Tax 0 %
Cess 0 %

Enter the details as shown above.

❖ Type of Supply: Goods
u) Press Ctrl + A to save.
Step-3: Recording of Exempt Purchases in Tally.ERP 9
Go to Gateway of Tally > Accounting Vouchers > Click F9: Purchase
i) Click ‘F2: Date’ to change the date as 02-06-2018.
Enter ‘014’ in the ‘Supplier invoice no.’ field.
N) Select ‘Lotus Traders’ in the ‘Party A/c Name’ field. A ‘Party Details’ screen appears, press Ctrl + A or click A: Accept.
VI Select ‘Purchase Exempt’ in the ‘Purchase Ledger’ field.
Vl) Select ‘Stamps’ from ‘List of Stock Items’ in the ‘Name of Item’ field
Enter ‘Quantity’ as ‘120’ and ‘Rate’ as ‘255’, amount will be calculated automatically under ‘Amount’ column.
Keep pressing ‘Enter’ till ‘Bill-wise Details’ screen appears, accept the screen as it is.
Enter transaction information in the ‘Narration’ field or skip it by pressing ‘Enter’.
The ‘Purchase Voucher’ screen appears as shown below,
Purr .base | No 4 2-Jun-2018
' jpplier invoice no 014 Date 2-Jun-2(l18 Saturday

-arty A?c name Lotus Traders

.’."ent balance
Purchase ledger Purchase Exempt
'iame of Item Rate per Amount

Stamps 120.000 Hos 255.00 Mos 30.500.00

a
- End of List

'iarratjon; 120 000 Mos Accept ?

Yes or Ho

x) Press ‘Enter’ to accept.

LTD. SIA PUBLISHERS AND DISTRIBUTORS PVT. LTD.

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UNIT-3 : Recording Advanced Entries, GST Adjustment and Return Filing 113
Q16. Explain accounting of exempt sales in Tally.ERP 9 with an example.
Answer :
Accounting of exempt sales in Tally.ERP 9 can be explained by using the following example,
Example
On 02-06-2018, Universal Traders sold the following goods to Raja Traders (registered dealer), Hyderabad
Voucher: Sales
Item Quantity Rate (?) Amount (?)
Stamps 60 310 18,600
Record the above transactions in the Tally.ERP 9.
Solution :
Following are the steps for recording sales of exempted goods in Tally.ERP 9
Step-1: Creating Accounting Masters
(a) Create Party Ledger
(i) Go to Gateway of Tally > Accounts Info > Ledgers > Create
(ii) Enter the following details,
❖ Name: Raja Traders
❖ Under: Sundry Debtors
❖ Maintain balances bill-by-bill? Yes
(iii) Press Ctrl+A to save
(b) Create Sales Exempt Ledger
(i) Enter the following details,
❖ Name: Sales Exempt
❖ Under: Sales Account
Statutory Information
❖ Is GST applicable? Applicable
❖ Set/alter GST details? Yes
‘Tax Rate Details’ sub-screen appears as shown below,
Tax Rate Details

HSN/SAC Details

Description

HSN/SAC

Nature of transaction Sales Exempt

Tax Details
(From 1-Apr-2018)
Taxability Exempt
Is reverse charge applicable ? No

t Tax Type Rate

Integrated Tax 0%
Central Tax 0%
State Tax • 0 %
Cess 0 %

❖ Type of Supply: Goods

(ii) Press Ctrl + A to save.
SIA PUBLISHERS AND DISTRIBUTORS PVT. L

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113
114 THEORY AND PRACTICE OF GST
Step-2: Recording of Exempt Sales in Tally.ERP 9
Go to Gateway of Tally > Accounting Vouchers > Click F8: Sales
:i) Click ‘F2 Date’ to change the date as 02-06-2018.
aad. iii) Enter ‘UT/18/03’ in the ‘Reference no.’ field.
:v) Select ‘Raja Traders’ in the ‘Party A/c name’ field, a ‘Party Details’ screen appears, press Ctrl + A or Click
A: Accept.
iv) Select ‘Sales Exempt’ in the ‘Sales Ledger’ field.
vi) Select ‘Stamps’ from ‘List of Stock items’ in the ‘Name of Item’ field.
vii) Enter ‘Quantity’ as ‘60’ and rate as ‘310’, amount will be calculated automatically under ‘Amount’ column.
viii) Keep pressing ‘Enter’ till ‘Bill-wise Details’ screen appears, accept the screen as it is.
ix) Enter transaction information in the ‘Narration’ field or skip it by pressing ‘Enter’.
The ‘Sales Voucher’ screen appears as shown below,
Sales 2-Jun-2018
Reference no UT/18/03 Saturday

Party Ac name Raja Traders

Current balance 18.600.00 Dr
Sales ledger Sales Exempt
Name of Item Quantity Rate pet Amount

Stamps 60.000 Nos 310.00 Nos 18,600.00

J End of List

Narration 60 000 Nos Accept ?

Yes Mo

3.7 SEZ SALES

Q17. Define SEZ sales. What are its types? Explain accounting of SEZ sales in Tally.ERP 9 with an example.
Answer :

SEZ Sales
SEZ stands for Special Economic Zone. SEZ sales can be defined as sale of goods or services to SEZ. Any outward
supply made to a recipient belonging to SEZ is called an SEZ sale. In Tally.ERP 9, sales voucher is used to record SEZ
sales. Integrated tax is applicable for such sales.
Types of SEZ Sales
Based on the applicability of tax, SEZ sales are divided into the following types,
1. Taxable SEZ Sale
It refers to those SEZ sales in which integrated tax is applicable for both interstate and intrastate parties.
2. Sale Under LUT/Bond
SEZ sales under LUT/Bond are allowed only when the sale is accompanied by a letter of undertaking from the department
for the sale of goods with no payment of duty. Tax is not applicable for such sales.
5IA PUBLISHERS AND DISTRIBUTORS PVT. LTD. _____ m

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UNIT-3 : Recording Advanced Entries, GST Adjustment and Return Filing 115
3. Exempt SEZ Sale
It refers to those SEZ sales which are exempted from any tax or duty. No tax is applicable for exempt SEZ sales.

Accounting of SEZ Sales in Tally.ERP 9

Accounting of SEZ sales in Tally.ERP 9 can be explained by using the following example,

Example
On 02-06-2018, Universal Traders sold the following goods to Infotech Pvt. Ltd., Telangana State
Industrial Infrastructural Corporation Ltd.(TSIIC), (SEZ), Telangana.
Voucher: Sales

Item Quantity Rate (?) Amount (?)

HP Printer P1007 12 8,200 98,400

Record the SEZ sales in Tally.ERP 9.

Solution :
Following are the steps for recording the SEZ sales in Tally.ERP 9,

Step-1: Creating Accounting Masters

(a) Create Party Ledger

(i) Go to Gateway of Tally > Accounts info > Ledgers > Create
(ii) Enter the following details,
❖ Name: Infotech Pvt. Ltd. - TSIIC
❖ Under: Sundry Debtors
❖ Maintain balances bill-by-bill? Yes
❖ Set/alter GST details? Yes
A ‘GST Details’ screen appears as shown below,

GST Details

Registration type Regular

GSTIN/UIN 36DDDDD1970C2Z5
Party Type SEZ
Is a e-Commerce operator ?OSHi
Enter the details as shown above.
(iii) Press Ctrl+A to save.

(b) Create SEZ Sales Ledger

(i) Enter the following details,
❖ Name: SEZ Sales
❖ Under: Sales Accounts
Statutory Information
❖ Is GST applicable? Applicable
❖ Set/alter GST details? Yes
———————— SliA PUBLISHERS AND DISTRIBUTORS PVT. LTD I 51

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115 116 THEORY AND PRACTICE OF GST
A ‘Tax Rate Details’ sub-screen appears as shown below,
Tax Rate Details

HSN/SAC Details

Description HP Printer P1007

HSN/SAC 84433240
Nature of transaction : Sales to SEZ - Taxable
State Tax Details

Taxability Taxable
Is reverse charge applicable ? No

Tax Type Rate

Integrated Tax 18 %
Central Tax ■0%
State Tax 9 %
Cess 0 %

Enter the details as shown above.

❖ Type of Supply: Goods
> Press Ctrl + A to save.
Step-2: Recording SEZ Sales
Go to Gateway of Tally > Accounting Vouchers > Click F8: Sales.
i) Click ‘F2 Date’ to change the date as 02-06-2018.
iii) Enter ‘UT/18/04’ in the ‘Reference no.’ field.
tv) Select ‘Infotech Pvt. Ltd. - TSIIC’ in the ‘Party A/c name’ field, a ‘Party Details’ screen appears press Ctrl +A or
click A: Accept.
v) Select ‘SEZ Sales’ in the ‘Sales Ledger’ field.
i vi) Select ‘HP Printer P1007’ from ‘List of Stock Items’ in the ‘Name of Item’ field.
vii) Enter ‘Quantity’ as ‘12’ and ‘Rate’ as 8,200, amount will be calculated automatically under ‘Amount’ column.
i viii) Select ‘Integrated Tax’ ledger by pressing twice, duty amount will be calculated automatically.
ix) Set ‘Yes’ to ‘Provide GST Details’ option, an additional details screen appears as shown below,
Additional Details : Sales to SEZ - Taxable

Shipping bill no 551234 Date 02-06-2018

(x) A ‘Bill-wise Details’ screen appears, accept the screen as it is.

I xi) Enter transaction information in the ‘Narration’ field or skip it by pressing ‘Enter’.
The ‘Sales Voucher’ screen appears as shown below,

xii) Press ‘Enter’ to accept.

I SIA PUBLISHERS AND DISTRIBUTORS PVT. LTD._______

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UNIT-3 : Recording Advanced Entries, GST Adjustment and Return Filing 117
Step-3: Viewing GST Report
It is an outward, therefore it can be viewed in GSTR-1.
❖ Go to Gateway of Tally > Display > Statutory Reports > GST > GSTR-1
‘GSTR-1’ screen appears as shown below,

GSTR-1 1-Jun-2018 to 30-Jun-2018

Returns Summary
Total number of vouchers for the period 9
Included in returns 3
Not relevant for returns 6
Incomplete/Mismatch in information Ito be resolved) 0
Tab- Particulars Cou- Taxable Value Integrated Central Tax State Tax Cess Tax Amount Invoice Amount
le nt Tax Amount Amount Amount Amount
No.

5 B2B Invoices
6 B2C(Large) Invoices

7 B2C(Sma1l) Invoices
8 Credit/Debit Notes
9 Nil Rated invoices 1 18.600 00 18.600.00
.'■j
K
11 Tax Liability on Advances

12 Setoff of Tax Paid against

Advances

Press ‘Enter’ on Exports Invoices to view Voucher Register as shown below,

[ Voucher Register Universal Traders Ctrl T H El

Vouchers of Exports Invoices 1-Jun-2018 to 36 Jun 2018

Date Particulars GSTIN/UIN Veh Type Veh No. Taxable Integrated Tax Central Tax State Tax Cess Total Tax Invoice
Value Amount Amount Amount Amount Amount Amount

1-S-2018 Sam Traders Sales 2 43.000.00 7.740.00 7.740.00 50.740,001

36CD0DCH970C2ZS Sates 4 98,400.00 17,712.00 17.712 00 1.16,112 001

Grand Total 1,41,400.9# 25,452.00 25,452.00 1,66,852.9#

3.8 ADVANCE RECEIPTS AND PAYMENTS - ACCOUNTING ADVANCE RECEIPT AND SALES
INVOICE IN THE SAME MONTH
■ .................. -...................................- — ■■ — ’■ ■ ........— ...................... - — ■ ........................................ — —■ ..... - — — ■ -■ —■

Q18. Discuss the applicability of GST for advance receipts and payments. Explain accounting of advance
receipt and sales invoice in the same month.
Answer : Model Paper-lll, Q11(a

Applicability of GST for Advance Receipts and Payments

The recipient of the advance is liable to pay GST if any advance is received for the goods or services but the
corresponding sales invoice is not raised within the same month. The voucher recorded for advance received is to be tracked
against the invoice which is raised against an advance received in a different tax period.
Accounting of Advance Receipt and Sales Invoice in the Same Month
Accounting of advance receipt and sales invoice in the same month can be explained by using the following example,
Example
(i) Voucher: Receipt
On 01-07-2018, Universal Traders received an advance amount of ? 30,000 from Moon Traders towards
sale agreement of HP Printer P1007.
....... ............... SNA PUBLISHERSAND DISTRIBUTORS PVT. LTD

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118 THEORY AND PRACTICE OF GST
ii) Voucher: Sales
On 02-07-2018, Universal Traders sold goods to Moon Traders against the advance received on 01-07-2018.

Item Quantity Rate (?) Amount (?)

HP Printer P1007 10 Nos 8,200 82,000
Record the above transactions in the Tally.ERP 9.
Solution :
The steps for recording the advance receipt and sales in the same month are as follows,
Step-1: Creating Accounting Masters
a) Create Party Ledger
(i) Go to Gateway of Tally > Accounts Info > Ledgers > Create
(ii) Enter the following details,
❖ Name: Moon Traders
❖ Under: Sundry Debtors
❖ Set/alter GST details? Yes
A ‘GST Details’ screen appears as shown below,

GST Details

Registration type Regular

GSTIN/UIN 36DDDDD2009A3Z5
Party Type . ~ • MMB 1 Applu >»■!»• /'/ ■ -
Is a e-Commerce operator ? No

<* (iii) Press Ctrl+A to save.

OC Step-2: Recording of Receipt Voucher for Advanced Receipt

□ Following are the steps required for recording Receipt Voucher for Advanced Receipt,
Go to Gateway of Tally > Accounting Vouchers > Click F6: Receipt.
Click ‘F2 Date’ to change the date as 01-07-2018.
ii) Press Alt + V for Advance Receipt.
.ES v) Select ‘Indian Bank’ in the ‘Account’ field.
I Under the ‘Particulars’ field, select ‘Moon Traders’ from ‘List of Ledger Account’
nee ‘Ac/vance Receipt Details’ screen appears as shown below,

Advance Receipt Details I ‘st of Stock rtems I

11 (* Slock item Ledger Name Amount Amount Central Tax Sta

4 Not Applicable j
(Ind of Tax) Rato Amount Rat*
HP Printer P1007
Stamps

: the
ii) Click F12: Configure to set ‘Yes’ to ‘Allow entry of amount inclusive of tax’.
:kec
■ iii) Enter the following details in ‘Advance Receipt Details’ screen.
❖ Stock Item: HP Printer Pl007

le. ❖ Ledger Name: It will be skipped,

❖ Amount (Incl. of tax): It will be calculated automatically after entering amount in ‘Amount’ field
❖ Amount: 30,000
Rate and amount of both Central Tax and State will get automatically calculated as GST rates are defined in the
a rds stock item ledger.
SIA PUBLISHERSAND DISTRIBUTORS PVT. LTD.
,TD

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UNIT-3 : Recording Advanced Entries, GST Adjustment and Return Filing 119
The ‘Advance Receipt Details’ screen appears as shown below,
Advance Receipt Detai h
| Stock Horn Lsdg&r Hams Amount Amount Central Tax Stat© Tax Coss
(fact of Tsx} Rate Amount Rate. Amount Rate Amount

HP Printer Pi 007 J Not Applicable 35,400.001 O % 2,700.00 s % 2,700.00

35,400.00 30,000.06 2.700.00 2.700.00

(ix) Press Ctrl + A to accept.

(x) Press 'Enter’ on the ‘Account’ field to get ‘Bill-wise Details for Moon Traders’ Screen.
Enter the following details,
❖ Type of Ref: Advance
❖ Name:Adv/01
❖ Due Date, or Credit Days: Leave it blank
❖ Amount: 30,000
(xi) Press Ctrl + A or Click A: Accept.
(xii) In Bank Allocation screen, select ‘Specify Bank Name’ from list of banks, ‘Bank Name’ sub-screen appears, enter
‘Indian Bank’ and press ‘Enter’.
(xiii) Enter transaction information in the ‘Narration’ field or skip it by pressing ‘Enter’.
The ‘Receipt Voucher’ screen appears as shown below,
■■ElSnSMitio 1 1-Jul-2018
Sunday
Uses for Advance Receipt

Account Indian Bank

Curfia 4.49,224.00 Dr
Particulars Amount

Moon Traders 30.000.00

CVr 8a’ 30.000.00 Cr
Advance Adv/01 30,000.00 Cr

narration th nnn.nn

Accept ?

Yes r. Ho

(xiv) Press ‘Enter’ to accept.

Step-3: Viewing Print View of Advance Receipt Voucher
(i) Go to Gateway of Tally > Display > Day Book.
(ii) In the ‘Day Book’ screen, press ‘Enter’ on Moon Trader Voucher.
(iii) Press Alt + P in the ‘Accounting Voucher Alteration (Secondary)’ screen.
The ‘Voucher Printing’ screen appears as shown below,
Voucher Printing

Printer : Canon L6P6300 (IP 192.168 0 8) Paper type: . A4

Number of copies : 1
Print language : English tFWfwg dmnswts}
Print format : Neat Mode Paper size: (B2rx1169*)«(210i™nx28Tmm)
Range of pages to print: All Print area : (7 95* x 1134*) or (2C2 mm k 288 mm)

Report Titles

Receipt Voucher

(with Print Preview)

IV/thouf company phone no. Without company web&te Print ?

Print Advance Receipt : Yes

Yes No

SIA PUBLISHERS AND DISTRIBUTORS PVT. LTI

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9
120 THEORY AND PRACTICE OF GST
(iv) Press ‘Enter’ to accept.
The ‘Advance Receipt’ appears as shown below,
Advance Receipt
Universal Traders
Plot NO 312- Galaxy Tower Kofi. Hyderabad
GSTIN/UIN . 36AAAAA1984A1Z9

Party Moon Traders Invoice No 1

Address Invoice Date . 01/07/2018 .
GSTIN No. 36DDDDD2Q09A3Z5
SI No Particulars Rate per Amount

HP Printer P1007 30,000.00 30,000.00

? 30,000.00
Amount received (in words)
INR Thirty Thousand Only
HSN/SAC Taxable Central Tax State T ax
Value Rate Amount Rate Amount
84433240 30.000.00 9% 2,700.00 9% 2.700.00
iter Total 30.000.00 2,700.00 2.700.00
Tax Amount (in words) : INR Five Thousand Four Hundred Only £ & OE

for Universal Traders

Prepared by Verified by Authorised Signatory

Step-4: Viewing GST Report

i i) Go to Gateway of Tally > Display > Statutory Reports > GST > GSTR-1
‘GSTR-1’ report screen appears as shown below,

Included in returns 1
Not relevant for returns o
Incomplete/Mismatch in information (to be resolved} 0
Tab­ Particulars Cou- Taxable Value Integrated Central Tax State Tax Cess Amount Tax Amount Invoice Amount
le nt Tax Amount Amount Amount
•to.

B2B Invoices
: B2C(Large) Invoices

B2C(Small) Invoices
: CreditjBebit Notes

Nil Rated Invoices

'0 Exports Invoices

' Tax Liability on Advances 30,000.00 2.700.00
‘2 Setoff of Tax Paid against
Advances

ii) Press ‘Enter’ on ‘Tax Liability on Advance’ to view ‘Voucher Register’.

Step-5: Create ‘Taxable Sales’ Ledger
Go to Gateway of Tally > Accounts Info. > Ledgers > Create
:i) Enter the following details,
❖ Name: Taxable Sales
❖ Under: Sales Accounts
Statutory Information
❖ Is GST/applicable? Applicable
❖ Set/alter GST details? Yes
.TD. 5IA PUBLISHERSAND DISTRIBUTORS PVT. LTD. __

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UNIT-3 : Recording Advanced Entries, GST Adjustment and Return Filing 121
‘Tax Rate Details’ sub-screen appears as shown below,________________
Tax Rate Details

HSN/SAC Details

Description JMMR Sales laxahle *

HSN/SAC

Nature of transaction Sales Taxable

Tax Details
(From 1-Apr-2018)
Taxability Taxable
Is reverse charge applicable ? No

Tax Type Rate

Integrated Tax 18 %
Central Tax 9 %
State Tax 9 %
Cess 0 %

Enter the details as shown above,

❖ Type of Supply: Goods
(iii) Press Ctrl + A to save.
Step-6: Recording Sales Invoice Against Receipt of Same Month
(i) Go to Gateway of Tally > Accounting Vouchers > Click F8: Sales.
(ii) Click ‘F2: Date’ to change the date as 02-07-2018.
(iii) Enter ‘UT/18/05’ in the ‘Reference no.’ field.
(iv) Select ‘Moon Traders’ in the ‘Party A/c name’ field. A ‘Party Details’ screen appears, press Ctrl + A or Click
A: Accept.
(v) Select ‘Taxable Sales’ in the ‘Sales Ledger’ field.
(vi) Select ‘HP Printer P1007’ from ‘List of Stock Items’ in the ‘Name of Item’ field.
(vii) Enter ‘Quantity’ as ‘10’ and ‘Rate’ as ‘8,200’, amount will be calculated automatically under ‘Amount’ column,
(viii) Select ‘Central Tax’ ledger, the amount will be calculated automatically.
(ix) Select ‘State Tax’ ledger, the amount will be calculated automatically.
(x) A ‘Bill-wise Details for Moon Traders’ appears. Enter the following details,
❖ Type of Ref: Agst Ref
❖ Name:Adv/01
❖ Amount: 30,000
<♦ Press ‘Enter’ and enter the following,
❖ Type of Ref: New Ref
❖ Name: UT/18/05
❖ Amount: Amount will be calculated automatically
The ‘Bill-Wise Details for Moon Traders’ appears as shown below:
Bill-wise Details for Moon Traders
Upto ? 96,760.00 Dr

Type of Ref Name Due Date or Amount Dr/

Credit Days Cr
(wet 2-Jul-2018}

Agst Ref Adv/01 30,000.00 Dr

New Ref g UT/18/05 66,760.00 Dr

96,760.00 Dr

❖ Press Ctrl + A or Click A: Accept to accept.

___________________________________ SIA PUBLISHERS AND DISTRIBUTORS PVT. LTD

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122 THEORY AND PRACTICE OF GST

(xi) Enter transaction information in the ‘Narration’ field or skip it by pressing ‘Enter’. -j;:;v
The ‘Sales Voucher’ screen appears as shown below,

Press ‘Enter’ to accept.

Step-7: Viewing GST Report

Go to Gateway of Tally > Display > Statutory Reports > GST > GSTR-1
The ‘GSTR-1 ’ report appears as shown below,

After recording the sales invoices against the advances received, the entry of‘Tax Liability on Advances’ shifted
to B2B Invoices.

3.8.1 Advance Receipt and Sales Invoice Recorded in Different Months

Q19. What are the various steps involved in accounting of advance receipt and sales invoice in different
months in Tally.ERP 9?
Answer :

The various steps involved in accounting of advance receipt and sales invoice in different months in Tally.ERP 9
can be explained by using the following example,
SNA PUBLISHERS AND DISTRIBUTORS PVT. LTD.

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UNIT-3 : Recording Advanced Entries, GST Adjustment and Return Filing 123
Example
(i) Voucher: Purchase
On 31-07-2018, Universal Traders purchased the following goods from Crescent Traders (registered
dealer), Telangana and Central and State Tax was charged by him.

Item Quantity Rate (?) Amount (?)

HP Printer P1007 120 7,500 9,00,000
(ii) Voucher: Receipt
On 01-08-2018, Universal Traders received an advance amount of ? 1,50,000 from Moon Traders towards
sale agreement of HP Printer P1007, through bank with reference Adv/02.
(iii) Voucher: Receipt
On 02-08-2018, Universal Traders received an advance amount of? 80,000 from Moon Traders towards
sale agreement of HP Printer P1007, through bank with reference Adv/03.
(iv) Voucher: Sales
On 01 -09-2018, Universal Traders sold the following goods to Moon Traders against the advance received
on 01-08-2018.

Item Quantity Rate (?) Amount (?)

HP Printer P1007 50 8,200 4,10,000
1. Record the purchase made from Crescent Traders
2. Record the advance receipt and sale invoice made in different months in Tally.ERP 9.
Solution :
1. Recording the Purchase Made from Crescent Traders
The following are the steps for recording the purchase in Tally.ERP 9,
Step-1: Creating Accounting Masters
(a) Create Party Ledger
(i) Go to Gateway of Tally > Accounts Info > Ledgers > Create
(ii) Enter the following details,
❖ Name: Crescent Traders
❖ Under: Sundry Creditors
❖ Set/alter GST details? Yes
A ‘GST Details’ screen appears as shown below,

GST Details

Registration type Regular

GSTIN/UIN 36QQQQQ1234Q1Z6
Party Type J Not Applicable
Is a e-Commerce operator ?E3Hi
(iii) Press Ctrl+A to save.
(b) Create Purchase Taxable Ledger
(i) Enter the following details,
❖ Name: Purchase Taxable
❖ Under: Purchase Accounts
❖ Type of Supply: Goods
(ii) Press Ctrl + A to save.
____________ _ SIA PUBLISHERSAND DISTRIBUTORS PVT. LTD

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124 THEORY AND PRACTICE OF GST

Step-2: Recording Purchase Voucher
Following are the steps required for recording Purchase Voucher,
red ) Go to Gateway of Tally > Accounting Vouchers > Click F9: Purchase.
i) Click ‘F2 Date’ to change the date as 31 -07-2018.
iii) Enter ‘020’ in the ‘Supplier Invoice no’ field.
iv) Select ‘Crescent Traders’ in the ‘Party A/c name’ field. A ‘Party Details’ screen appears, press Ctrl + A or
click ‘A: Accept’.
rds v) Select ‘Purchase Taxable’ in the ‘Purchase Ledger’ field.
(vi) Select ‘HP Printer P1007’ in the ‘Name of Item’ field.
vii) Select ‘Central Tax’ ledger in the ‘Name of Item’ field.
rds
. iii) Select ‘State Tax’ ledger in the ‘Name of item’ field.
Enter ‘Quantity’ as ‘120’ and ‘Rate’ as 7,500, amount will be calculated automatically under ‘Amount’ column.
<ed IX) Keep pressing ‘Enter’ till ‘Bill-Wise Details’ screen appears, accept the screen as it is.
• xi) Enter transaction information in the ‘Narration’ field or skip it by pressing ‘Enter’.
The ‘Purchase Voucher’ screen appears as shown below,
Accounting Voucher Creation Universal Traders Ctrl F M □

Purchase No 5 31Jul-2018
S-cpIier invoice no 020 Date 31-Jul2018 Tuesday

-arty A/c name Crescent Traders

' . msnt balance
- .-chase ledger Purchase Taxable
same of Item Quantity Rate per Amount

-P Printer P1007

' antral Tax 81,000.00

sate Tax 81,000.00

^nation 120.000 Nos Accept ?

Yes er No

xii) Press ‘Enter’ to accept.

2. Recording the Advance Receipt and Sale Made in Different Months in Tally.ERP 9
Following are the steps for recording the advance receipt and sale made in different months in Tally.ERP 9,
Step-1: Recording of Receipt Voucher for Receipt
Following are the steps required for recording Receipt Voucher for Advanced Receipt,
Go to Gateway of Tally > Accounting Vouchers > Click F6: Receipt.
Click ‘F2 Date’ to change the date as 01-08-2018.
Press Alt + V for Advance Receipt.
Select ‘Indian Bank’ in the ‘Account’ field.
Under the ‘Particulars’ field, select ‘Moon Traders’ from ‘List of Ledger Accounts’.
»t) ‘Advance Receipt Details’ screen appears, click F12: Configure to set ‘Yes’ to ‘Allow Entry of Amount
Inclusive of Tax’.
). I SIA PUBLISHERS AND DISTRIBUTORS PVT. LTD.

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UNIT-3 : Recording Advanced Entries, GST Adjustment and Return Filing 125
(vii) Enter the details as shown below,
Advance Receipt Dotalte

Stock Item Ledger Name Amount Amount Central Tax State Tax Cew
(tnc! of Tax) Rate Amount Rate Amount Rate Amount

HP Printer P1007 J Not Applicable 1,77,000.00 ■KEE3E] 9% 13,500.00 9% 13,500.00

1,77,000.00 1,50,000.00 13,500.00

(viii) Press Ctrl + A to accept.

(ix) Press ‘Enter’ on the ‘Account’ field to get ‘Bill-wise Details for Moon Traders’ screen as shown below,

(x) Press Ctrl + A or Click A: Accept to accept.

(xi) In Bank Allocation screen, select ‘Specify Bank Name’ from list of banks, ‘Bank Name’ sub-screen appears,
enter ‘Indian Bank’ and press ‘Enter’.
(xii) Enter transaction information in the ‘Narration’ field or skip it by pressing ‘Enter’.
The ‘Receipt Voucher’ screen appears as shown below,
1-Aug-2O18
Wednesday
Used for Advance Receipt

Account Indian Bank

Cur Bai 5.99.224.00 Or
Particulars Amount

Moon Traders 1,50,000.00

Cur Ba 83,240.00 Cr
Advance Adv/02 1.50,000.00 Cr

Narration f miwum

Accept ?

Yes or No

(xii) Press ‘Enter’ to accept.

Similarly, record the Purchase Voucher which the advance received on 02-08-2018.
The ‘Purchase Voucher’ screen for the advance received on 02-08-2018 is shown below,

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125 126 THEORY AND PRACTICE OF GST

Step-2: Viewing GST Report
(i) Go to Gateway of Tally > Display > Statutory Reports > GST > GSTR-1
iii) Click‘F2: Period’and enter the date as 01-05-2018 to 31-08-2018
The ‘GSTR-1’ report screen appears as shown below,
GSTR-1______________________________________________________________________________________________________ 1 May-2018to 31Aug-2O18
Returns Summary',
[Total number of vouchers for Ore
Included in returns 7
Not relevant for returns 13
Incomplete/Mismatch in information (to be resolved) 0
Tab Particulars Cou­ Taxable Value integrated Central Tax State Tax Cess Tax Amount invoice Amount
ie nt Tax Amount Amount Amount Amount
No.

5 B2B Invoices 1 82,000.00 7 380 00 7,380 00 14.760 00 96 .760 00

6 B2C(Large) Invoices
7 B2C(Small) Invoices
8 Credit/Debrt Notes
9 Nil Rated Invoices 1 18600.00 18,600.00
10 Exports Invoices 3 1,90 600.00 25.452.00 25.452.00 2.16.052 00
11 Tax Liability on Advances 2 2.30.000.00 20,700.00 20700.00 41,400.00 2.30.000 00
12 Setoff of Tax Paid against
Advances

i iii) Press ‘Enter’ on ‘Tax Liability on Advance’ to view ‘Voucher Register’.

Step-3: Recording Journal Voucher to Raise Tax Liability
•ears.
Following are the steps required for recording Journal Voucher to raise tax liability,
ii) Go to Gateway of Tally > Accounting Vouchers > Click F7: Journal
i ii) Click ‘ F2: Date’ to change the date as 01 -08-2018.
(iii) Press Alt + C to create ‘Tax on Advance’ ledger.
i iv) Enter ‘Tax on Advance’ in the ‘Name’ field.
(v) Select ‘Current Assets’ in ‘Under’ field.
(vi) Press Ctrl + A to save.
i vii) Click ‘J: Stat Adjustment’, select the following in the ‘Stat Adjustment’ sub-screen as shown below,
Stat Adjustment

Type of duty/tax GST

Nature of adjustment Increase of Tax Liability

Additional Details

Additional Details En Account of Advance Recei

iviii) Under ‘Particulars’ field, select ‘Tax on Advance’ and enter ‘27,000’. Similarly,
Select ‘Central Tax’ ledger and enter 13,500 under ‘Credit’ column.
Select ‘State-Tax’ ledger and enter 13,500 under ‘Credit’ column.
i ix) Enter transaction information in the ‘Narration’ field or skip it by pressing ‘Enter’
i x) The ‘Journal Voucher’ screen appears as shown below,

Similarly, create a tax liability for the advance receipt made on 02-08-2018 for ? 80,000.
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UNIT-3 : Recording Advanced Entries, GST Adjustment and Return Filing 127
The ‘Journal Voucher’ screen appears as shown below,

Step-4: Recording Sales Invoice Against Receipt of Previous Month

(i) Go to Gateway of Tally > Accounting Vouchers > Click F8: Sales.
(ii) Click ‘F2: Date’ to change the date as 01-09-2018.
(iii) Enter ‘UT/18/06’ in the ‘Reference no.’ field.
(iv) Select ‘Moon Traders’ in the ‘Party A/c name’ field. A ‘Party Details’ screen appears, press Ctrl + A or click
A: Accept.
(v) Select ‘Taxable Sales’ in the ‘Sales Ledger’ field.
(vi) Select ‘HP Printer P1007’ from ‘List of Stock Items’ in the ‘Name of Item’ field.
(vii) Enter ‘Quantity’ as ‘50’ and ‘Rate’ as ‘8,200’ amount will be calculated automatically under ‘Amount’ column.
(viii) Select ‘Central Tax’ ledger, the amount will be calculated automatically.
(ix) Select ‘State Tax’ ledger, the amount will be calculated automatically.
(x) A ‘Bill-Wise Details for Moon Traders’ appears,
Enter the following details,
❖ Type of Ref: Agst Ref
❖ Name: Adv/02
❖ Amount: 1,50,000
❖ Press ‘Enter’ and enter the following,
❖ Type of Ref: New Ref
❖ Name: UT/18/06
❖ Amount: Amount will be calculated automatically.
The ‘Bill-Wise Details for Moon Traders’ screen appears as shown below,
Bill-wise Details for Moon Traders
Upto T 4,83,800.00 Dr
Type of Ref . Name Due Date or Amount Dr/
Credit Davs Cr
(wet 2-Aug-2018)

Agst Ref Adv/02 1,50,000.00 Dr

New Ref UT/18/06 3.33.800.00 FT1

4,83,800.00 Dr

❖ Press Ctrl + A or click A: Accept to accept.

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128 THEORY AND PRACTICE OF GST

(xi) Enter the tr ansaction information in the ‘Narration’ field or skip it by pressing ‘Enter’
The ‘Sales; Voucher’ screen appears as shown below,
Sales | No 6
j Reference no UT/ 18/06 Saturday

I Party A/c name Moon Traders

I Current balance 3,20.560.00 Dr
Sales ledger Taxable Sales
. Name of Item Quantity Rate pet Amount

HP Printer P1007 50.000 Nos 8.200.00 Nos 4.10,000.00

Central Tax 36,900.00

State Tax 36,900.00

Narration 50 000 Nos 4,83,800.00

(xii) Press‘Enter’to accept.

Step-5: Viewing GST Report
(i) Go to Gateway of Tally > Display > Statutory Reports > GST > GSTR-1.
(ii) Click ‘F2: Period’ to change the period as 01-09-2018 to 31-09-2018.
(iii) The‘GST-1’ report appears as shown below,

After recording the entry, the transaction shifted from ‘Tax Liability on Advances’ field to ‘Set off Tax paid
against advances field’.___________________
3.8.2 Reversal of GST on Account of Cancellation of Advance Receipt
Q20. Explain accounting of advance receipt and its cancellation in the same month in Tally.ERP 9 a with an
example.
Answer :
Accounting of advance receipt and its cancellation in the same month in Tally.ERP 9 can be explained by using the
following example,
Example
Voucher: Journal
On 01-09-2018, Moon Traders cancelled the advance receipt which was received on 02-08-2018 with
Adv/03.
Record the above transactions in Tally.ERP 9.
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UNIT-3 : Recording Advanced Entries, GST Adjustment and Return Filing 129
Solution :
Following are the steps for recording cancellation of advance receipt of last month,
(i) Go to Gateway of Tally > Accounting Vouchers > Click F7: Journal.
(ii) Click ‘F2: Date’ to change the date as 01-09-2018.
(iii) Click ‘J: Stat Adjustment’, ‘Stat Adjustment’ screen appears as shown below,
Stat Adjustment

Type of duty/tax GST

Nature of adjustment Decrease of Tax Liability

Additional Details
Additional Details Cancellation of Advance Receipts

Enter the details as shown above.

(iv) Under ‘Particulars’, select ‘Central Tax’ ledger and enter ‘7,200’ in ‘Debit’ field.
(v) Select ‘State Tax’ ledger and enter ‘7,200’ in the ‘Debit’ field.
(vi) Select ‘Tax on Advance’ ledger and enter ‘14,400’.
(vii) Enter transaction information in the ‘Narration’ field or skip it by pressing ‘Enter’.
The ‘Journal Voucher’ screen appears as shown below,
Journal No 6 1-Sep-2018
Saturday
Used for Decrease of Tax Liability
(Additional Details: Cancellation of Advance Receipts) ■

Particulars Debit Credit

Dr Central Tax 7,200.00

Cur Bal: 28.692.00 Dr
Dr State Tax 7,200.00
Cur Ba!: 28.692.00 Dr
Cr Tax on Advance 14.400.00
Cur Bal: 27,000.00 Dr
i -d

Narration 14,400.00- i<t Ann an.

Accept ?

Yes of No

(viii) Press ‘Enter’ to accept.

3.8.3 Accounting of Advance Payment for Purchase of Taxable Goods Under Reverse Charge
Q21. Explain accounting of an advance payment for purchase of taxable goods under reverse charge in
Tally.ERP 9 with an example.
Answer :

An advance payment voucher is recorded whenever the payment for taxable goods under reverse charge is made in
advance. That is due to the bill received on a future date.
Accounting of an advance payment for purchase of taxable goods under reverse charge in Tally. ERP 9 can be
explained by using the following example,
Example
Universal Traders made an advance payment to Saqi Traders, Singapore for purchases. Following are
the details of the transaction.
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130 THEORY AND PRACTICE OF GST

Date Particulars
31-7-2018 Payment Voucher:
Made advance payment of ? 50,000 to Saqi Traders, location Singapore
towards purchase of Ink cartage.
1-8-2018 Purchase Voucher:
Universal traders raised a purchase invoice against the advance paid on
30-7-18 to Saqi traders, Singapore.
Name of Item Quantity (Nos) Rate Amount (?)
Ink Cartage 50 1,000 50,000
Solution :
The following steps are required for accounting of advance payment voucher in Tally. ERP 9,
Step-1: Creating Accounting Masters
The following steps are involved in Accounting Master Creation,
(i) Go to Gateway of Tally > Accounts Info. > Ledgers > Create
(ii) Enter the following details,
❖ Name: Saqi Traders
❖ Under: Sundry Creditors
Mailing Details
❖ Country: Singapore
(iii) Press Ctrl + A to accept.
Step-2: Creating Inventory Masters
The following steps are involved in Inventory Masters Creation,
(i) Go to Gateway of Tally > Inventory Info. > Stock Items > Create
(ii) Enter the following details,
❖ Name: Ink Cartage
❖ Under: Primary
❖ Units: Nos
Statutory Information
❖ GST Applicable? Applicable
❖ Set/Alter GST Details: Yes
❖ A GST Details sub-screen appears as shown below,
Tax Rate Details
------------------------------------------

HSN/SAC Details

Description Ink Cartage

HSN/SAC 12345678

Tax Details

Calculation type On Value

Taxability Taxable
Is reverse charge applicable ? Yes

Tax Type Rate

Integrated Tax 18 %
Central Tax 9 %
State Tax 9 %
Cess ■qI%
SIA PUBLISHERSAND DISTRIBUTORS PVT. LTD. ____________

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UNIT-3 : Recording Advanced Entries, GST Adjustment and Return Filing 131
(iii) Enter the following details in GST Details sub-screen,
❖ Press F12 and set ‘Yes’ to ‘Enable Reverse Charge Calculation’
HSN/SAC Details
Description Ink Cartage
HSN/SAC 12345678
Tax Details
Calculation Type On Value
Taxability Taxable
Is reverse charge applicable: ‘Yes’, Integrated Tax: 18%.
❖ Central Tax and State Tax are taken as 9% each by default.
(iv) Select ‘Goods’ as type of supply .
(v) Press Ctrl + A to save.
The Stock Item creation screen appears as shown below,
Name Ink Cartage
(anas)

Set/modify default ledgers for invoicing 7 Ho

Under J Primary Statutory Information Behaviour

Units Nos
GST Applicable J Applicable Costing method Avg. Cost
Alternate units J Hot Applicable
Set/alter GST Details ? Yes Market valuation method Avg. Price

Set standard rates . ? No Type of Supply Goods Ignore difference due to physical counting? Ho
Rate of Duty (eg 5) 0 Ignore negative balances ? No
Treat all sales as new manufacture ? Ho
Treat all purchases as consumed 7 Mo
Treat all rejections inward as scrap 7 No

Quantity Rate per Value

Opening Balance

Step-3: Record Advance Payment Voucher Towards Reverse Charge

The following steps are involved in recording Advance Payment Voucher towards Reverse Charge,
(i) Go to Gateway of Tally > Accounting Vouchers > Press F5 for Payment Voucher.
(ii) Press F2 and Enter Date as 31 -7-18.
(iii) Press Alt + V for Reserve Charge Adv.
(iv) Select Indian Bank in the Account field.
(v) Select Saqi Traders in the Particulars field.
An Advance Payment Details screen appears as shown below,

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132 THEORY AND PRACTICE OF GST

(vi) Enter the following details in the Advance Payment Details Screen,
Stock Item : Ink Cartage
Amount : 50,000
The Central Tax and State Tax are automatically calculated.
❖ Press Enter to accept.
(vii) In the Bill-Wise Details Screen for Saqi Traders,
Enter the following details,
Type of Ref : Advance
Name : Adv/04
Amount is automatically calculated
Press Ctrl + A to accept.
Bill-wise Details tor: Saqi Traders
Upto ? 50,000.00 Dr
Type of Ref Name Due Date, or Amount Dr/
Credit Days Cr
(wef 1-Jun-2018)

Advance ADV/04 50,000.00 FJ

50,000.00 Dr

(viii) Enter Inst.No. as 123456 and Inst. Date as 31-7-18 in the Bank Allocation Screen and Save.
Bank Allocations for Indian Bank
For 50,000.00

Transaction Type Amount

Cheque 50.000.00

Cheque range 4 Not Applicable

test. no 123456 Inst, date ■■31 Jul-2018 | -

(jk) Press Ctrl + A to save the Voucher.

The Payment Voucher appears as shown below,
31-JUI-2O18
T uesdav
Used for: Advance Payment Under Reverse Charge

Account Indian Bank

O^Bai. 4,78,266.00 Dr
Particulars Amount

Saqi Traders 50.000.00

Gw Bal: 50,000.00 Dr
Advance ADV/04 50,000.00 Dr

narration. 50.000.00

(x) View the reflection of the transaction in GSTR-2 to view,

❖ Go to Gateway of Tally > Display > Statutory Reports > GST > GSTR-2
❖ Press Enter on Tax Liability under Reverse Charge on advances to view the vouchers of tax liability under
reverse charge on advances to the voucher register.
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UNIT-3 : Recording Advanced Entries, GST Adjustment and Return Filing 133
The GSTR-2 Report appears as shown below,
GSTR-2 1 Jul-2018 to 31 Jul-20181

Returns Summary_________________ _____

Total number of vouchers for the period
Included in returns
Net relevant for returns 2

Incomplete/Mismatch io information (to be resolved) 0|

Table Particulars Count Taxable Value Integrated Tax Central Tax State Tax Amount Cess Amount Tax Amount invoice Amount
No. Amount Amount

4 B2B Invoices

5 import of Goods Invoices

6 Import of Services invoices

7 Credit-Debit Notes

8 Nil Rated Invoices

9 ISD Credit

TDS Credit

10(21 TCS Credit

11 ITC Received

/: ■b
13 Tax Paid under Reverse Charge on Advance

14 !TC Reversal

Step-4: Record a Journal Voucher for Raising Liability for Reverse Charge
Following are the steps required to record a journal voucher,
(i) Go to Gateway of Tally > Accounting Vouchers > Press F7 for Journal Voucher
(ii) Press F2 and enter date as 31 -7-18
(iii) Press Alt + J for Stat Adjustment.
A Stat Adjustment details screen appears as shown below,

Stat Adjustment

Type of duty/tax GST

Nature of adjustment Increase of Tax Liability

Additional Details

Additional Details

Imports
Imports of Capital Goods
Interest
Late Fees
On Account of Advance Receipts
Others
Penalty
Purchase under Reverse Charge

(iv) In the Stat Adjustment details screen, enter the following details,
Stat Adjustment
Type of Duty/tax : GST
Nature of Adjustment : Increase of Tax liability
Additional Details
Additional Details : Advances paid under reverse charge
(v) In the Journal Voucher, debit and tax on advance (current asset ledger) and enter the amount as 9,000.
(vi) Credit the integrated tax and enter the amount as 9,000.
(vii) Press Ctrl + A to Accept or Save.
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134 THEORY AND PRACTICE OF GST

To Journal Voucher appears as shown below,

3.9 MIXED SUPPLY AND COMPOSITE SUPPLY UNDER GST

Q22. Explain the concept of Mixed Supply and Composite Supply Under GST.
Answer :
The concept of mixed and composite supply has been newly introduced under GST to over come from the problem of
identifying tax rates for combined supply of goods and services. These two concepts helps to identify whether the supplies
made together and they are related or not. It means, supplies of two or more goods and services can either be ‘mixed supply’
or ‘composite supply’. Under GST, the concept of mixed supply is entirely new one, but the concept of composite supply
is similar to the concept ‘Bundled services’ which was under service tax law.
As the GST law defined specific rates for goods and services separately, it is easy to identify the tax rate for particular
goods or services while supplying. However, in some cases, supply of good and services may be connected or may be
supplied together eventhough they are not connected. For example, Air Condition (AC) is supplied with its installation
services. In such cases, the concepts of mixed and composite supply will play a important role in identifying the tax rates
for kind of supplies.
The concept of mixed and composite supply of services under GST are explained in details separately in the following
manner,
1. Mixed Supply Under GST
For answer refer Unit-Ill, Page No. 134, Q.No. 23.
2. Composite Supply Under GST
For answer refer Unit-Ill, Page No. 138, Q.No. 24.
3.9.1 Mixed Supply of Goods
Q23. What do you mean by Mixed Supply of Goods? Explain accounting of mixed supplies under GST using
Tally. ERP 9.
Answer :
Mixed Supply of Goods
Mixed supply of goods refers to the supply of combination of two or more goods and services for a single price, by
a taxabl/individual. The combination of goods and/or services are supplied individually in the ordinary course of business.
They are not bundled due to natural necessities. The highest rate of tax applicable on either of the bundled goods and/or
services is considered while calculating the tax liability on mixed supply.
Accounting of Mixed Supplies under GST using Tally. ERP 9
The accounting of mixed supplies under GST using Tally. ERP 9 can be explained with the help of the following
example,
Example
Universal Traders bundled the following goods and sold it to the Baggins Traders, Telangana with
Central and State Tax applicable.
Date Name of Item Quantity Rate Amount
(in Bundles) (?) (?)
1-7-2018 Triplet pack (Candy, Hot chocolate mix, coffee) 100 500 50,000
31-7-2018 Triplet pack (Candy, Hot chocolate mix, coffee) 150 500 75,000
Record the above transaction in appropriate voucher in Tally.ERP 9.
SIA PUBLISHERS AND DISTRIBUTORS PVT. LTD. ———————__________

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134 THEORY AND PRACTICE OF GST

To Journal Voucher appears as shown below,
HBEEESMBi no. 2 31-JUI-2O1S
Tuesday
Used for. Increase of Tax Liability
Details A(t,a*ces Pa d under Reverse Charge)

Particulars Debit Credit

Dr Tax on Advance 9.000.00

Cur 8®' 9,000.00 Dr
Cr Integrated Tax 9,000.00:
Cur Bai. 1S.TiO.OOCr

narration 9.000.00 9,000.00:

3.9 MIXED SUPPLY AND COMPOSITE SUPPLY UNDER GST

Q22. Explain the concept of Mixed Supply and Composite Supply Under GST.
Answer :
The concept of mixed and composite supply has been newly introduced under GST to over come from the problem of
identifying tax rates for combined supply of goods and services. These two concepts helps to identify whether the supplies
made together and they are related or not. It means, supplies of two or more goods and services can either be ‘mixed supply’
or ‘composite supply’. Under GST, the concept of mixed supply is entirely new one, but the concept of composite supply
is similar to the concept ‘Bundled services’ which was under service tax law.
As the GST law defined specific rates for goods and services separately, it is easy to identify the tax rate for particular
goods or services while supplying. However, in some cases, supply of good and services may be connected or may be
supplied together eventhough they are not connected. For example, Air Condition (AC) is supplied with its installation
services. In such cases, the concepts of mixed and composite supply will play a important role in identifying the tax rates
for kind of supplies.
The concept of mixed and composite supply of services under GST are explained in details separately in the following
manner,
1. Mixed Supply Under GST
For answer refer Unit-Ill, Page No. 134, Q.No. 23.
2. Composite Supply Under GST
For answer refer Unit-Ill, Page No. 138, Q.No. 24.
3.9.1 Mixed Supply of Goods
Q23. What do you mean by Mixed Supply of Goods? Explain accounting of mixed supplies under GST using
Tally. ERP 9.
Answer :
Mixed Supply of Goods
Mixed supply of goods refers to the supply of combination of two or more goods and services for a single price, by
a taxable*individual. The combination of goods and/or services are supplied individually in the ordinary course of business.
They are not bundled due to natural necessities. The highest rate of tax applicable on either of the bundled goods and/or
services is considered while calculating the tax liability on mixed supply.
Accounting of Mixed Supplies under GST using Tally. ERP 9
The accounting of mixed supplies under GST using Tally. ERP 9 can be explained with the help of the following
example,
Example
Universal Traders bundled the following goods and sold it to the Baggins Traders, Telangana with
Central and State Tax applicable.
Date Name of Item Quantity Rate Amount
(in Bundles) (?) (?)
1-7-2018 Triplet pack (Candy, Hot chocolate mix, coffee) 100 500 50,000
31-7-2018 Triplet pack (Candy, Hot chocolate mix, coffee) 150 500 75,000
Record the above transaction in appropriate voucher in Tally.ERP 9.
SIA PUBLISHERS AND DISTRIBUTORS PVT. LTD. ——___________ ______________

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UNIT-3 : Recording Advanced Entries, GST Adjustment and Return Filing __ _ 135
Solution :
Following are the steps involved in recording the sales transaction of the bundled goods in Tally. ERP 9,
Step 1: Create Accounting Masters
Following are the steps required to create Accounting Masters,
(i) Go to Gateway of Tally > Accounts Info. > Ledgers > Create.
(ii) Enter the following details in the Ledger Creation,
Name : Baggins Traders
Under: Sundry Debtors
Mailing Details
Set/alter GST details ? ‘Yes’
(iii) In GST Details sub-screen,
❖ Select Registration type as ‘Regular’
❖ Enter GST IN/UIN as 36SSSSS1456S1Z4
❖ Press Ctrl + A to Accept
(iv) Create Mixed Sales ledger with the following details,
Name : Mixed Sales
Under : Sales Accounts
Statutory Information
Is GST Applicable ? Applicable
Set/Alter GST Details ? No
Type of Supply : Goods
Step 2: Create Inventory Masters
Following are the steps required to create inventory masters
(i) Go to Gateway of Tally > Inventory Info. > Stock Items > Create.
(ii) Enter the following details in the Ledger Creation,
Name : Triplet Pack
Under: Primary
Units : Press Alt + C and create unit as ‘Bundles’
{ Statutory Information
GST Applicable : Applicable
Set/alter GST Details ? ‘Yes’
❖ Enter details in the GST Details sub-screen as shown below,
Tax Rate Details
HSN/SAC Details:
Description : Bundled Goods
HSN/SAC : 12348567
Tax Details:
Calculation type : On value
Taxability : Taxable
Tax Type Rate:
Integrated Tax: 18%
❖ Central Tax and State Tax are automatically calculated
❖ Enter Opening balance of Quantity as 250
..... ..... SIA PUBLISHERSAND DISTRIBUTORS PVT. LTD

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136 THEORY AND PRACTICE OF GST
❖ The GST Details sub-screen appears as shown below,
GST Dctafc

Tax Rate Details

HSN/SAC Details

Description Bundled Goods

HSN/SAC 12348567

Tax Details
(From 1-Apr-2018)
Calculation type On Value
Taxability Taxable

Tax Type Rate

Integrated Tax 18 %
Central Tax 9 %
State Tax 9 %
Cess

Step 3: Record the Sales Transaction in Sales Voucher

Following are the steps required to record sales transaction,
i i) Go to Gateway to Tally > Accounting Vouchers > Press F8 for Sales Voucher.
i ii) Press F2 and enter date as 1 -7-18.
(iii) Enter Reference no:as SAL/01. ,
(iv) Select Baggins Traders in the Party A/c name.
(v) Accept the Party Details screen.
(vi) Select Mixed Sales in Sales Ledger field.
(vii) Select Triplet Pack in the Name of Item field.
( viii) Enter Quantity as 100 and Rate as 500. Amount is automatically calculated.
I ix) Press enter twice to select GST ledgers.
(x) Select Central Tax and the amount is automatically calculated.
(xi) Select State Tax and the amount is automatically calculated.
(xii) ^Press Alt + A to view Tax Analysis.
(xiii) Press Alt + F1 for details.
The Tax Analysis screen appears as shown below,

(xiv) Press Esc to go back to Sales Voucher.

(xv) Select New Ref as Type of Ref in Bill-wise Details
(xiv) Enter SAL/01 as Name and Save.
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UNIT-3 : Recording Advanced Entries, GST Adjustment and Return Filing 137
The Sales Voucher appears as shown below,
1 Jul-2018
Reference no SAL/01 Sunday

i Party Ac name Baggins Traders

i Sas-'? SAs-ce
: Safes ledger Mixed Sales
Name of Item Quantity Rate per Amount

. Triplet Pack MJJMBwidfes 500.00 Bate 50,000.00

Central Tax 4,500.00

i State Tax 4.500.0C
*

flarration 100 080 Bundles Sf.OOO.K

Step 3 : Record Another Sales Transaction

Following are the steps required to record another sales transaction,
(i) Go to Gateway to Tally > Accounting Vouchers > Press F8 for Sales Voucher.
(ii) Press F2 and enter date as 31 -7-18.
(iii) Enter Reference no : as SAL/02.
(iv) Select Baggins Traders in the Party A/c name.
(v) Accept the Party Details screen.
(vi) Select Mixed Sales in Sales Ledger filed.
(vii) Select Triplet Pack in the Name of Item field
(viii) Enter Quantity as 150 and Rate as 500 Amount is automatically calculated.
(ix) Press enter twice to select GST ledgers.
(x) Select Central Tax and the amount is automatically calculated.
(xi) Select State Tax and the amount is automatically calculated.
(xii) Press Alt + A to view Tax Analysis.
(xiii) Press Alt + F1 for details.
The Tax Analysis screen appears as shown below,

(xiv) Press ESC to go back to Sales Voucher

(xv) Select New Ref as Type of Ref in the Bill-wise Details
(xvi) Enter SAL/02 as Name and Save.
The Sales Voucher appears as shown below,
MB Mb. 4 31 Jul-2018
Reference no • JiAL/02 Tuesday

Party A/c name Baggins Traders

balance 89.000.00 Dr
Sales ledger Mixed Sales
flame of Item Quantity Rate pei Amount-

Triplet Pack WJWBwdta 500.00 fata 75,000.00

Central Tax 6,750.00

State Tax 6,750.00

Narration' 1 160 080 Bundles 88,500.00

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138 THEORY AND PRACTICE OF GST
Step 5: View the Transaction in GSTR -1
Following are the steps required to view the sales transaction in GSTR -1
(i) Go to Gateway of Tally > Display > Statutory Reports > GST > GSTR -1
The GSTR -1 report appears as shown below,
1 Jul-2018 to 31 -Jul-2018 j
:R-1
; &im$ Summary
3tal number of vouchers for the period 2
■ouded in returns 2\

’»ot relevant for returns O'

: • o[
hcomplete/Mismatch in information (to bs resolved)
'•-ole Particulars Count Taxable Value Integrated Tax Central Tax State Tax Amount Cess Amount Tax Amoun t 1 nvoice Amo u n t|
Bo. Amount Amount

i B2C(Large) invoices

B2C(Smsll) Invoices

: CreditXDebit Motes

Nil Rated Invoices

1 Exports Invoices

Tax Liability on Advances

2 Setoff of Tax Paid against Advances

(ii) Press Enter on B2B Invoices to go to Voucher Register.

The Voucher Register- B2B Invoices screen appears as shown below,
suchers of B2B invoices 1-Jul 2018 to 31 Jul-2018

Date Particulars GSTIN/UIN Veh Type Veh No. Taxable Integrated Tax Central Tax State Tax Cess Total Tax Invoice i
Value Amount Amount Amount Amount Amount Amount:

J. L
.''-7-2018 Baggins Traders 36SSSSS1456S1Z4 Sales 4 75.000 00 6 760 .00 6.750.00 13,500.00 88,500.001
e

Grand Total 1,25,000.00 11,250.00 11,250.00 22,500.00 1,47,500.00 j

3.9.2 Composite Supply of Goods (129 -138)

Q24. What is Composite Supply of Goods? Discuss accounting of composite supplies under GST using
Tally.ERP 9.
\nswer :
Composite Supply of Goods
Composite supply of goods refers to the supply of combination of two or more supplies of goods or services or both
for a single price by a taxable person. They are naturally bundled based upon the necessities during the ordinary course
of business. The elements of such supply are dependent elements on the ‘Principle Supply’ of goods or services which
are pre-doi/inant elements in the supply of goods or services. In Tally.ERP 9, sales voucher is used to record a composite
supply. The rate of tax applicable on the principle supply is considered as the composite supply’s tax rate.
Accounting of Composite Supplies under GST using Tally.ERP 9
The Accounting of composite supplies under GST using Tally.ERP 9 can be explained with the help of the following
example,
Example
Universal Traders Sold the following goods to the Baggins Traders, Telangana with Central and State
Tax applicable with transportation charges of? 40,000.
Quantity Rate Amount
Date Name of Item (?) (?)
(in Bundles)
31-7-2018 HP Printer P1007 50 8000 4,00,000
A4 Size Print Papers 80 600 48,000

Record the above transaction in appropriate voucher in Tally.ERP 9.

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UNIT-3 : Recording Advanced Entries, GST Adjustment and Return Filing 139
Solution :

Following are the steps involved in recording the sales transaction of the composite goods and services in Tally. ERP 9,
Step 1: Create a Service Ledger
Following are the steps required to create a Service Ledger,
(i) Go to Gateway of Tally > Accounts Info. > Ledgers > Create.
(ii) Enter the following details in the Ledger Creation,
Name : Transportation Charges
Under : Indirect Expenses
Inventory values are affected ? ‘No’
Statutory Information
Is GST Applicable : ‘Not Applicable’
Set/Alter GST Details : No
Include in assessable value calculation for : GST
Appropriate to : Goods
Method of Calculation : Based on value
(iii) Press Ctrl + A to Save.
The ‘Transportation Charges’ ledger appears as shown below,

Step 2: Create Stock Items

Following are the steps required to create a Stock Item
(i) Go to Gateway of Tally > Inventory Info. > Stock Items > Create.

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140 THEORY AND PRACTICE OF GST
(ii) Enter the following details in the Stock Item creation,
Name : A4 Size Print Papers
Under : Primary
Units : Bundles
Statutory Information
GST Applicable : Applicable
Set/Alter GST Details: ‘Yes’
❖ Enter the following details in GST Details Sub-Screen
HSN/SAC Details:
Description : A4 Size Print Papers
HSN/SAC : 4802
Tax Details:
Calculation type : On value
Taxability : Taxable
Tax Type
Integrated Tax 18%
Central Tax 9%
State Tax 9%
Cess 0%
The GST Details sub-screen appears as shown below,
1 GST Detarts

Tax Rate Details

HSN/SAC Details

Description A4 Size Print Papers

HSN/SAC 4802

Tax Details

Calculation type On Value

Taxability ; Taxable

Tax Type Rate

Integrated Tax 18 %
Central Tax 9 %
State Tax 9 %
Cess ■B%
❖ Press Ctrl + A to Save.
(iii) Enter Opening balance of Quantity as 80.
(iv) Press Ctrl + A to save the Stock Item.
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UNIT-3 : Recording Advanced Entries, GST Adjustment and Return Filing 141
The Stock Item Creation screen appears as shown below,

[Name : A4 Size Print Papers

i (alias} ■■ u ' 'A • • ' ' ' ' • i : ; ( i U i • U -L r . r 'iii / ■•• . i |■ ■ r: i ;/ ■ ■ j ■ ' ' . u- | z . • • •• i i i i / i '-i i :

f Set-'modify default ledgers for invoicing No ii ■■ i

J Primary
i; c.'ii ij i j ? i ■ ; ■■ ■:
Under Statutory Information Behaviour
Units Bundles
GST Applicable -* Applicable Costing method Avg. Cost
Alternate units J Not Applicable
Set/alter GST Details ? Yes Market valuation method Aug. Price

Set standard rates ? No Type of Supply Goods Ignore difference due to physical counting? No
Rate of Duty (eg S) : & Ignore negative balances ? No
Treat all sales as new manufacture ? No
Treat ail purchases as consumed ? No . .............*
Treat all rejections inward as scrap ? Nc

«3
: • > . j i' ' ji ij

Quantity Rate per Value Accept ?

Opening Balance 8MO8 Bundles

......................... Yes or tto

Step 3: Create Composite Sales Ledger

Following are the steps required to create a Composite Sales Ledger,
(i) Go to Gateway of Tally > Accounts Info. > Ledgers > Create.
(ii) Enter the following details in the Ledger Creation,
Name : Composite Sales
Under : Sales Accounts
Inventory values are affected ? ‘Yes’
Statutory Information
Is GST Applicable ? Applicable
Set/Alter GST Details ? No
Type of Supply : Goods
❖ Press Ctrl + A to Save the ledger.
Step 4: Record the Sales Transaction
Following are the steps required to record a sales transaction.
(i) Go to Gateway of Tally > Accounts Vouchers > Press F8 for Sales Voucher.
(ii) Pi-pss F2 and enter Date as 31 -7-18
(iii) Enter Reference no. as CS/01
(iv) Select Baggins Traders in the Party A/c name field
(v) Accept (Ctrl + A) the Party details sub- screen
(vi) Select Composite Sales in the Sales Ledger field.
(vii) Select HP Printer P1007 in the Name of Item field.
(viii) Enter Quantity as 50 and Rate as 8000. Amount is automatically calculated.
(ix) Select A4 Size Print Papers in the Name of Item field.
(x) Enter Quantity as 80 and Rate as 600. Amount is automatically calculated.
(xi) Press Enter twice.
(xii) Select Transportation Charges and enter amount as 40,000
(xiii) Select Central Tax Ledger and the amount is automatically calculated.
(xiv) Select State Tax ledger and the amount is automatically calculated.
(xv) In the Bill-Wise Details screen, select New Ref as the Type of Ref and enter the Name as CS/01.
(xvi) Press ALT + A to view Tax Analysis.
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142 THEORY AND PRACTICE OF GST
The Tax Analysis screen appears as shown below,
Tax Analysis

Particulars Taxable Value Tax rare Duty/Tax Value

j ST Details

HP Printer PI007 (84433240) 4.35.714 29 78428.58

Item Value (Sales Value 4 00.000.001 4.00.000.00
Charges (40.00000/4.48.00000 * 4.00.000 00) 35,714.29
Centra- Ta/. 9% 39.214.29
State Tax 9% 39.214.29
A 4 S>ze Pwl Papers (4802) 52.285.71 9.411.42
/a'u&f Sa-'ea value 48.000.00 > 48.000.00
Trar.sa&tattc-r- Charges (40.000.00 / 4.48.000.00 * 48.000.00) 4.285.71
Central Tax 9% 4,705.71
State Tax 9% 4.705.71

Total 87,840.00

••ii) Press Esc to go back to Sales Voucher

. ■ iii) Press Ctrl + A to Accept.
The Sales Voucher appears as shown below,
31 Jul-2918 i
~«-enceno CS/01 Tuesday:

-r». A/c name Baggins Traders

t■: balance 1,47.500.00 Dr
■aes ledger Composite Sales
lame of Item Quantity Rate per Amount

<» Printer P1007 50.000 Nos 8,000.00 Nos 4.09,000.00

-t Size Print Papers 88.080 Be wiles 600.00 Bate 48,800.00

4,48,000.00^
exportation Charges 40.000.00
leetral Tax 43.929.00
43,920.00!

wration 5.7SMO.&O.

3.10 GST REPORTS GENERATING GSTR REPORT IN ERP

125. What is a GST Report? How are GSTR-1 and GSTR-2 reports generated in Tally.ERP 9?
Answer :
GST Report
A GST report is a document consisting of summary of monthly quarterly or annual returns which includes the details
■ all the inward and outward supplies which are filed by a taxable individual registered under GST.
Generating GSTR-1 Report in Tally. ERP 9
Following are the steps required for generating GSTR-1 report in Tally. ERP 9,
Step 1:
Go Gateway of Tally > Display > Statutory Reports > GST > GSTR -1
Step 2:
Press F2 and Enter the period as 1 -6-18 to 31-7-18
Step 3:
Press Alt + V to view the following screen,
GSTR-1 1Jun-2018 to 31 Jul-2018
Returns Summary

Included in returns 3
Nat relevant ter rahims ■ 2
Incomplete/Mismatch in information (to be resolved} 0
Table Particulars Count Taxable Value integrated Tax Central Tax State Tax Amount Cess Amount Tax Amount invoice Amount
No. Amount Amount

5 526 Invoices 2 1.25 000 00 11.250 00 11 250 00 22.500.00 1 47 500.00

6 B2CiLarge) Invoices
■ 7 B2Ct'Small: Invoices
i8 CredrVDetrit Notes

:9 Nii Rated Invoices

: 10 Experts invoices 1 43.000 00 7.740.OS 7.740 00 50.740 GO
111 Tax Liability on Advances

12 Seto# of Tax Paid against Advances

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UNIT-3 : Recording Advanced Entries, GST Adjustment and Return Filing 143
Activities which can be Performed from GSTR -1 Report in Tally. ERP 9
For answer refer Unit-II, Page No. 77, Q.No. 20, Topic: Activities Performed from GSTR-1 in Tally.ERP 9.
2. Generating GSTR - 2 Report in Tally.ERP 9
Following are the steps required for generating GSTR -2 report in Tally.ERP 9,
Step 1:
Go to Gateway of Tally > Display > Statutory Reports > GST > GSTR-2
Step 2:
Press F2 and Enter the date as 1-6-18 to 31-7-18
Step 3:
Press Alt + V to view the following screen,

3.11 INPUT TAX CREDIT SET OFF

Q26. How is Input Tax Credit Set Off?
Answer : Model Paper-ll, Q11(W

If the input tax credit amount is more than the liability, then the credit will be carried forward to the next assessmer
year. If the input tax credit amount is less than the liability then tax is to be paid to the government.
The following table shows the setting off of the Input tax credit against each of these components as prescribed b
GST Law,

Input Tax Credit Set off Against Liability (in that Order)
Central Tax Central Tax and Integrated Tax
State Tax/UT Tax State/UT Tax and Integrated Tax
Integrated Tax Central/ State and Integrated Tax
Integrated tax credit can be set off against integrated, Central State and UT tax.
The adjustment of Input tax credit can be explained with the help of the following example,
Example
Adjust the following input tax credit against available tax liability,

Date Input Tax Credit Liability Amount

31-08-2018 Central Tax 5000 Central Tax 5,778
State Tax 5000 State Tax 5,778
Integrated Tax 10,000 Integrated Tax 16,750
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144 THEORY AND PRACTICE OF GST

solution :
The following steps are involved in adjustment of input tax credit,
Step 1: Resolve the Exceptions
The following steps are required to Resolve any Exceptions,
(i) Go to Gateway of Tally > Display > Statutory Reports > GST > GSTR -1.
(ii) Press F2 and enter the period as 1-7-18 to 31 -8-18
The GSTR -1 Report screen appears as shown below,
15TR-1 Uul-2018 to 31-Aug-2018^

A®--ns Summary

-: uded in felums 2|
relevant for returns 2
oj
- 22rnplete/Mismatch in information (to be resolved)
Particulars Taxable Value integrated Tax Central Tax State Tax Amount Cess Amount Total Tax Amounts
Amount Amount
I
. : wa r d Supplies

.2 2 31 Sales 1,25,000.00 11.250.00 11,250.00 22.500.00>

’«table 1.26,000.00 11,250.00 11,250.00 22.500.00\

Iotal Outward Supplies 1.25,000.00 _________________ 11,250.09 ______ 11,250.00_______________________________ 22,500.00 j

It can be observed that there are no incomplete/mismatch information which is to be resolved.

(iii) Go GST Reports > GSTR-2
The GSTR-2 Report appears as shown below,

It can be observed that there are no incomplete/mismatch in information which is to be resolved.

Since there are no exceptions, the GSTR-1 and GSTR-2 report display correct Input tax credit and Tax liability
mount in Tally. ERP 9.
Step 2: Set off Central Tax Input Credit against Central Tax Liability
The following steps are required to set off Central Tax Input Credit against Central Tax Liability.
(i) Go to Gateway of Tally > Accounting Vouchers > Press F7 for Journal voucher.
(ii) Press F2 and enter the date as 31 -8-2018
(iii) Press Alt + J for Stat Adjustment
Enter the following details,
Type of duty/tax : GST
Nature of adjustment: Decrease of Tax Liability
Additional Details
Additional Details : Adjustment Against Credit
The Stat Adjustment Details Screen appears as shown below,
Stat Adjustment

Type of duty/tax GST

Nature of adjustment Decrease of Tax liability

Additional Details

Additional Details
List of Nature of Adjustments

st Credit
Cancellation of Advance Payments under Reverse Charge
Cancellation of Advance Receipts

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UNIT-3 : Recording Advanced Entries, GST Adjustment and Return Filing 145
(v) Debit the Central Tax Ledger and enter the amount to the extent of available i.e., 5000
(vi) Debit the State Tax Ledger and ent the amount to the extent of available credit i.e., 5000
(vii) Credit the Central Tax Ledger for setting - off the payable amount against the credit available,
(viii) Credit the State Tax Ledger for setting - off the payable amount against the credit available.
The Journal Voucher appears as shown below,
31-Aug-2018
Frida)
Used he Decrease of Tax Liability
(AcfcFfrona/ Details. Adjustment Against Credit)

Particulars Debit Credit

Dr Central Tax 5,000.00

Cur Ba/ 5.778.00 Cr
Dr State Tax 5.000.00
C^Bal 5,778.00 Cr
.Cr Central Tax 5,000.00
Cur Sa/ 5,778.00 Cr
Cr State Tax 5,000.00
Cur 8a/ 5.778.00 Cr

Narration 10,000.00 10,000.00

(ix) Press Ctrl + A to Accept or Save.

Step 3: Set off Integrated Tax Input Credit Against Integrated tax Liability
The following steps are required to set off Integrated Tax against integrated Tax liability.
(i) Go to Gateway of Tally > Accounts Vouchers > Press F7 for Journal Voucher.
(ii) Press F2 and enter Date as 31 -08-18
(iii) Press Alt + J for State Adjustment
(iv) Enter the following details,
Type of duty/tax : GST
Nature of adjustment: Decrease of Tax Liability
Additional Details
Additional Details : Adjustment Against Credit
(v) Debit the Integrated Tax Ledger and enter the amount to the extent of available credit.
(vi) Credit the Integrated Tax Ledger for setting - off the payable amount against the credit available.
The Journal Voucher appears as shown below,
■■E3S9MI no. 4 31-Aug-201l
Frida
Used for Decrease of Tax Liability
(Add&oba/ Details: Aduslment Against Credit)

•; Particulars Debit Credit

Dr Integrated Tax 10,000.00

! Cur 8a/ 16.740.00 Cr
| Cr Integrated Tax 10,000.00
i Cur Ba/ 16.740.00 Cr

I Narration 10,000.00 10,000.00

3.12 GST TAX PAYMENT - TIME LINE FOR PAYMENT OF GST TAX - MODES OF PAYMENT -
CHALLAN RECONCILIATION
Q27. Write about: (i) GST Tax Payment, (ii) Timeline for Payment for GST, (iii) Modes of Payment.
Answer :

(i) GST Tax Payment

The GST details such as Tax liability, deposits and input tax of each taxable person and are administered ana
maintained on a common portal under various accounts like Electronic Cash ledger, Electronic Credit Ledger and Electron:;
Tax Liability Register.
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.46 THEORY AND PRACTICE OF GST
The various accounts used for maintaining GST details are as follows,
Electronic Cash Ledger
An electronic cash ledger is maintained for every registered taxable person on the common portal to credit the deposited amount.
This ledger shall be debited to the extent of payment which is made towards interest, tax penalty, fee or any other amount.
Electronic Credit Ledger
An electronic credit ledger is maintained for every registered taxable person on the common portal to credit every claim
of input tax credit under it. This ledger shall be debited to the extent of utilization of input tax credit for discharging the
tax liability and refunding of claims.
Electronic Tax Liability Register
An electronic tax liability registeris maintained for every registered taxable person on the common portal to debit (add)
all the amount payable. It shall be credited to the extent of the payment which is made by depositing the amount in the
electronic tax liability register through e-filling or by utilizing the input tax credit.
Time Line for Payment of GST Tax
The time line for payment of tax under GST tax regime is as follows,
Type of Dealer Due Date
Regular 20th of the subsequent month.
Composition Dealer 18th of the subsequent quarter
Modes of Payment of GST Tax
The Payment of GST Tax can be done either through offline or online mode. Offline payment can be done only for payments
jp to ?10,000 per challan per tax period.
Following are the various modes of payment of GST
Offline Mode Offline Payment can be done through the following,
1. Demand Draft by depositing through Over the Counter
Payment (OTC)from authorized banks.
2. Cash
3. Cheque
Online Mode Online payment can be done through the following,
1. National Electronic Fund Transfer (NEFT) from any
bank.
2. Internet banking through authorized bank.
3. Real Time Gross Settlement (RTGS) from aiiy bank
4. Credit card or Debit card after registering them in a
common portal through the authorized bank.
GST Tax Payment

I __ 1
Time
Maintenance and
Administration of
GST details of GST

f
ZE
Regular 20th of
the subsequent
month
V
__ i _ V ♦
Electronic Tax
Electronic Electronic
Cash ledger Credit ledger Liability Register

2. Cash Fund Transfer (NEFT)

3. Cheque 2. Internet Banking
3. Real Time Gross Settlement
4. Credit Card or Debit Card

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UNIT-3 : Recording Advanced Entries, GST Adjustment and Return Filing 147
Q28. Explain accounting of GST tax payment to the department with an example.
Answer :
Accounting of GST tax payment to the department can be explained with the help of the following example,
Example
Universal Traders paid the following taxes to government. Record the GST tax payment transaction in
Tally.ERP 9.
Date Type of Tax Tax Amount (?)
1-9-2018 Central Tax 5,778
State Tax 5,778
Note The Payment date for Regular dealers is 20th of the subsequent month but educational mode of
Tally. ERP 9 doesn’t allow entries on other dates than 1,2, and last date. Hence the example is created
to with 1-9-18 as date.
Solution :
Following are the steps involved in recording GST tax payment to the department,
Step 1:
Go to Gateway of Tally > Accounting Vouchers > Press F5 for Payment Voucher
Step 2:
Press F2 and Enter Date 1 -9-18
Step 3:
Press ALT + S for Stat Payment
A Stat Payment Details screen appears as shown below,
Statutory Payment

Type of Payment
Tax Type GST
Period From l-Aug-2018 To J Any
Payment Type ____ 1| Advance
Recipient Liability
Regular

Step 4:
Enter the following details,
Tax Type : GST
Period From : 1-8-18 to 31-8-18
Payment Type : Regular
❖ Press enter to accept
Step 5:
Select Indian Bank in the Account field.
Step 6:
Select Central Tax in the Particulars and enter .the amount to the extent of available balance i.e., 11,250.
Step 7:
Select State Tax and enter the amount to the extent of available balance i.e., 11,250.
Step 8:
Set ‘Yes’ to Provide GST Details. A GST Details sub-screen appears as shown below,
Bank Details

Mode of payment Met Banking - (E-Payments)

Name of the Bank . Indian Bank
Common Portal Identification NumberjCPIN! 12589634752165
Challan Identification NumberfCIN)
BRN/UTR ________________
Payment date HKE23EID

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.41 THEORY AND PRACTICE OF GST
9ap9: ” ~~
Enter the following details,
Bank Details
Mode of Payment: Net Banking - (E - Payment)
Name of the Bank : Indian Bank
Common Portal Identification Number (PIN): 12589634752165
Payment date : 1-9-18
Step 10:
In the Bank Allocations screen as shown below,
❖ Enter Inst. No : 456238
Inst, date : 1-9-18
Bank Allocations for: Indian Bank
For: 11.556.00

Ledger Name Transaction Type Amount

Central Tax Cheque 11.556.00

CAeque range J Not Applicable

Inst. no. . 456238 Inst, date

Step 11:
Save the screen and press Ctrl + A to Accept the Voucher.
The Payment Voucher appears as shown below,
no. 4 1-Sep-2018:
Saturday
Statutory payment for: GST
(Payment Type: Regular)

-2count indianBank
Cur Ba/. 4,66700.00 Dr
Particulars Amount-

Central Tax 5,778.00

Cur Ba! 0.00 Dr
Sate Tax 5,778.00
Car Bal 0.00 Dr

- : vide GST Details Yes

^■-ration. _____________________11,556.00 j

129. Explain Challan Reconciliation in Tally. ERP 9.

‘nswer :
Challan Reconciliation is the reconciliation of the payment details of GST. The tax payment vouchers which are
worded for payment of GST and other liabilities can be view through a Challan Reconciliation report. The Payment
:e:ails which were left at the time of recording the payment voucher can be defined in challan reconciliation.
The steps required to reconcile a challan in Tally.ERP 9 are as follows,
Step 1:
Go to Gateway of Tally > Display > Statutory Reports > GST
Step 2:
Select Challan Reconciliation
The Challan Reconciliation screen appears as shown below,
s of Payment Vouchers 1-Apr-2018 to 1-Sep-2018 I

(Reconciliation)
Date Particulars Veh Type Veh Ho. Type of Payment Period Type of Mode of payment Bank Name Common Portal Amount
Tax Payment Identification
Payment NumbedCPIN)
From To

5 mors ... —
ETTWS Indian Bank Payment 1 GST 1-May-2G18 3tMay-2018 Net Banking - (E-Payments) Indian Bank 1341780081S513 10,944.00
'-Sep-2018 Indian Bank Payment 4 GST 1-Aug-2018 31 Aug-2018 Net Banking -(E-Payments) mdian Ban-. 12589634752155 11 556 00

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THEORY AND PRACTICE OF GST
Step 9:
Enter the following details,
Bank Details
Mode of Payment: Net Banking - (E - Payment)
Name of the Bank : Indian Bank
Common Portal Identification Number (PIN): 12589634752165
Payment date : 1-9-18
Step 10:
In the Bank Allocations screen as shown below,
❖ Enter Inst. No : 456238
Inst, date : 1-9-18
Bank Allocations for: Indian Bank
For 11.556.00

Ledger Maine Transaction Type Amount

Central Tax Cheque 11.556.00

Cheque range J Not Applicable

Inst. no. . 456238 Inst, date

Step 11:
Save the screen and press Ctrl + A to Accept the Voucher.
The Payment Voucher appears as shown below,
■■ZHSSSMH no. « 1-Sep-2018
Saturday

Statutory payment for: GST

(Payment Type: Regu’ar)

: aunt. Indian Bank

Our 5s/ 4,66,760.00 Dr
Particulars Amount

Central Tax 5,778.00

CvrBs?. 0.00 Dr
State Tax 5,778.00
CurBs/ 0.00 Dr

- : vide GST Details Yes

Taxation 11,558.00

129. Explain Challan Reconciliation in Tally. ERP 9.

Knswer :
Cha^an Reconciliation is the reconciliation of the payment details of GST. The tax payment vouchers which are
-tcorded for payment of GST and other liabilities can be view through a Challan Reconciliation report. The Payment
lietails which were left at the time of recording the payment voucher can be defined in challan reconciliation.
The steps required to reconcile a challan in Tally.ERP 9 are as follows,
Stepl:
Go to Gateway of Tally > Display > Statutory Reports > GST
Step 2:
Select Challan Reconciliation
The Challan Reconciliation screen appears as shown below,
-st of Payment Vouchers 1-Apr-2018 to 1-Sep-2018 \

(Reconciliation)i
Date Particulars Veh Type Veh No. Type of Payment Period Type of Mode of payment Bank Name Common Portal Amount '
Tax Payment Identification
Payment Numbe^CPttl)
From To

5 more ... —
Indian Bank Payment 2 GST 1-May-2018 31-May-2018 Met Banking -rE-Payments) Indian Bank 13417800818513 10 344 00.
'-Sep-2018 Indian Bank Payment 4 GST 1-Aug-2018 31-Aug-2018 Net Banking -fE-Payments) Indian Bank 12583634752155 11 556 00

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UNIT-3 : Recording Advanced Entries, GST Adjustment and Return Filing 149
Step 3:
The period is taken by default from 1-4-18 to 1-9-18. Press F2 to change the period if needed.
Step 4:
Press ALT + S to enter Stat Payment Details. A Stat Payment Details sub-screen appears as shown below,

Statutory Payment
Period From 1-May-2018 To 31-May-2018
Mode of payment Net Banking ■ (E-Payments)
Bank Name Indian Bank
Common Portal Identification NumbefiCPIN) 14725836975321

Challan Identification NumberfCIN) 8521473

BRN/UTR 14728963214

Payment date 31/5/18!

Step 5:
Enter the payment details which were left while recording the tax payment entry as shown below,
Statutory Payment
Period From: 1-5-18 to 31-5-18
Mode of Payment: Net Banking (E- Payments)
Bank Name: Indian Bank
Common Portal Identification Number (PIN): 14725836975321
Challan Identification Number (CIN): 8521473
BRN/UTR: 147528963214
Payment date : 31-5-18
Step 6: I
Press Ctrl + A to Accept.
Step 7:
Follow the same steps to enter Stat Payment Details for other payment vouchers.
The Stat Payment Details sub-screen for
Payment voucher dated : 1/9/18 appears as shown below.

Statutory Payment
Period From 1-Aug-2018 To 31-Aug-2018
Mode of payment Net Banking - (E-Payments)
Bank Name Indian Bank
Common Portal Identification NumbenCPIN) 12539634752165

Challan Identification NumberfCIN) 1258963

3
BRN/UTR 125896345675
Payment date MhCifi

9
Press Ctrl + A to Accept.
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150 THEORY AND PRACTICE OF GST

3.13 EXPORTING GSTR -RETURN AND UPLOADING IN GST PORTAL

130. How is GSTR -1 return exported and uploaded in GST portal.
Answer: Model Paper-Ill, Q11(b)

GSTR-1 return should not have any unresolved, exceptions falling under the head Incomplete/Mismatch in information
•? be resolved). All exceptions are required to be resolved before exporting the GSTR -1 return in the specified excel
?rmat for a given period. The transactions which fall under the head ‘Included in returns’ in the GSTR -1 report will be
imported.
Following are the steps needed to export the GSTR -1 return in the specified excel format,
Step 1:
Go to Gateway of Tally > Display > Statutory Reports > GST > GSTR -1
Step 2:
Press F2 and change the period to 1-7-18 to 31-7-18
Step 3:
Ensure that there are no vouchers under the ‘Incomplete/Mismatch in information (to be resolved)’ section.
Step 4:
Press ALT + V for Table view
The GSTR -1 screen appears as shown below,
STR-1____________________ ■ ___________________________________________________________________________________________________________________ ____________ 1-Jui-201S to 31-Jt.d 2018
ms Summary, - .

El
•eluded returns- 2
-.ot relevant for returns ■ . : • ■ ■ . .. ■ ' • 2
'complgte^Mismatch tn information (to be resolved; 0
Particulars Taxable Value Integrated Tax Central Tax State Tax Amount Cess Amount Total fax Amount
Amount Amount

3 utw a rd Supplies

_ocal Sates 1,25,000.00 11,2500 11,250.00 22,500.®

'axable 1,25.000.00 11,250.00 11,250.00 22'500.00

Total Outward Supplies 1,25.000.00 11.250.00 11,250.00

.........................

Step 5:
Press Ctrl + E for e-Return
An Export Report screen as shown below appears,

Exporting GSTR-1

Language Default JAH Languages}

Format Excel (Spieadsheet) :
Export Location d:\Tally.ERP9Wata
Output File Name GSTR-1 36AAAAA1984A1Z9 July 2018-19.xls
Open Exported. File ? Yes

Accept ?
From date 1 -7-201 §
To date 31-7-2018
¥e» ar Ho

I Step 6:
Enter the details as shown in the above screen.
I Step 7:
Press Ctrl + A to accept.
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ISO THEORY AND PRACTICE OF GST

-.13 EXPORTING GSTR -RETURN AND UPLOADING IN GST PORTAL

«3O. How is GSTR -1 return exported and uploaded in GST portal.
‘nswer : Model Paper-Ill, Q11(b)

GSTR-1 return should not have any unresolved, exceptions falling under the head Incomplete/Mismatch in information
be resolved). All exceptions are required to be resolved before exporting the GSTR -1 return in the specified excel
mat for a given period. The transactions which fall under the head ‘Included in returns’ in the GSTR -1 report will be
imported.
Following are the steps needed to export the GSTR -1 return in the specified excel format,
Step 1:
Go to Gateway of Tally > Display > Statutory Reports > GST > GSTR -1
Step 2:
Press F2 and change the period to 1-7-18 to 31-7-18
Step 3:
Ensure that there are no vouchers under the ‘Incomplete/Mismatch in information (to be resolved)’ section.
Step 4:
Press ALT + V for Table view
The GSTR -1 screen appears as shown below,
f Jui-2®18to31JuJ 2fl1Sj

warns Summary

mcoced tn returns - 2|
~. -? Isvant for returns ; A
«!
-: p^ete/Mfsmatch in information fto be resolved)
Total fax Amount i
= articular* Taxable Value Integrated Tax Central Tax State Tax Amount Cess Amount
Amount Amount

.ward Supplies
t
. :-:ai Sates 1,25,000.00 11,250.00 11,250.00 22,500,001
"axable 1,25,000.00 11,250.00 11,250.00 22,500.00
i

Total Outward Supplies 1,25,000.00 11,250.00 •........ ... 11,250.00 ^,500.00 i

Step 5:
Press Ctrl + E for e-Return
An Export Report screen as shown below appears,

Exporting G STR-1

Language Default (All Languages)

Format ' Etcs/ (Spreadsheet)
Export Location d:\Tally.ERP9Wata
Output Fite Name GSTR-1_36AAAAA1984A1Z9_July_2018-19.xls
Open Exported File ? Yes

Accept ?
From date 1-7-2018
To date 31-7-2018
Yes 3-' No

:tep 6:
Enter the details as shown in the above screen.
Step 7:
Press Ctrl + A to accept.
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UNIT-3 : Recording Advanced Entries, GST Adjustment and Return Filing 151
An Exported Excel Sheet appears as shown below,
A2 • Jfc 36SSSSS1456S1Z4
A B C E * F G H I J < L M J

~ ?' r aet>MNr in.9ic«#«re h>c-a Pace 0*Sueply Re-isrse Cfte-’pe P-:.jaenai AnewM* S-Ceiwerc*S3”*; <»te;ory MSttfSAC cf 5vppy Total "axatle value Rate K>S~Amount C<5$TP
2 {36SSSSS1456S1Z4 Is C1/07/2G18 59000 36 X X G 12342567 50000- 0
3 ■ : 31/07/2018 88500 36 X JlM G 22342567 75000 0

its

S, ’
to ............................ .......... ...................................................... ....... ......................... ................ .................. ................ ................................... ............................................ .......... H

12 * ’
8 • . . ■

14 ■ ■
15.
1€
17 . . ■ ;
18
J9
29
21 J j
22
: _ I

« « » »i b2b ^ o2&3 . s3c’ b2ca .. b2cs ‘&2csa aim ainrc. t 3t_ ata e\? ,_e?pa „._fxpd ^..5/*\... ... ■ - .c......... .. ]UU JUw

It can be observed that the exported Excel Sheet is in line with the format prescribed by the department. It comprises of
all the outward supplies transaction details falling under various head such as B2B, B2C, Export Invoices etc. This file can be
imported to the offline utility tool which can be downloaded from the official website : WWW, gst,gov.in/downloads/retum . The
offline tool converts it into a.json file which can be uploaded on the GST portal.
Follow the same steps to generate GSTR -1 return for the month of August.
Q31. Explain exporting and uploading of GSTR -2 return in portal.
Answer :
GSTR-2 return should not have any unresolved, exceptions falling under the head Incomplete/Mismatch in informatics
(to be resolved). All exceptions are required to be resolved before exporting the GSTR-2 return in the specified excel format fcr
a given period. The transactions which fall under the head ‘Included in returns’ in the GSTR -2 report will be exported in Excel sheet
Following are the steps required to export the GSTR-2 return in the specified excel format.
Step 1: Go to Gateway of Tally > Display > Statutory Reports > GST > GSTR-2
Step 2: Press F2 and change the period to 1-5-18 to 31-5-18
Step 3: Ensure that there are no vouchers under the ‘Incomplete/Mismatch in information (to be resolved)’ section.
Step 4: Press ALT + V for Table View.
The GSTR-2 screen appears as shown below,

Step 5: Press Ctrl + E for e-Return

Step 6: Enter the details as shown in the above screen.
Step 7: Press Ctrl + A to Accept.
It can be observed that the exported Excel Sheet is in line with the format prescribed by the department. It comprises
all the outward supplies transaction details falling under B2B, Imports Nil - Rated Invoices etc. This file can be imported to t
offline utility tool which can be downloaded from the official website : WWW, gst.gov.in/downloads/retums. The offline tc
converts it into a.json file which can be uploaded on the GST portal.
Follow the same steps to generate GSTR-2 return for the month of August.
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152 THEORY AND PRACTICE OF GST

I. Multiple Choice
1. According to GST Law, the GST transaction should be maintained by . [ ]

(a) Owner of Business (b) Operator of Warehouse

(c) Transporter of goods and services (d) All the above.

2. The place of maintaining _____ of GST transaction should be the place where the business take place. [ ]
(a) Supply (b) Accounts
(c) Purchase (d) None of the above
3. The accounts of GST should be audited by r
]
(a) Finance manager (b) Audit manager
(c) Chartered Accountant (d) Owner of business
4. Which account should be prepared by owner under GST? [ ]
(a) Input CGST A/c (b) Output CG ST A/c

(c) Both (a) & (b) (d) None of the above.

5. A taxable person may not be eligible for dealer if he supplies goods through e-■commerce operator.
[ ]
(a) Composite (b) Registered
(c) Un-registered (d) None of the above
6. Un-registered dealers cannot issue [ ]
(a) Bills (b) Tax invoice
(c) Receipts (d) None of the above
7. Supply of goods outside the country is referred as [ 1
(a) Imports (b) Exports
(c) Trade (d) Import-Export.
8. There are types of exports. [ ]
(a) Two (b) Three
(c) Four (d) Five
9. There are types of SEZ sales. [ ]
(a) Two (b) Three
(c) Four (d) Five

10. _______concepts are newly introduced under GST to overcome from the problem of identifying tax rates for
combined supply of goods and services. [ ]

(a) Composite supply (b) Mixed supply

(c) Both (a) and (b) (d) None of the above
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UNIT-3 : Recording Advanced Entries, GST Adjustment and Return Filing 153

II. Fill in the Blanks

1. A dealer having an aggregate turnover of less than 1.5 crores during previous year is referred as________ .
2. A dealer having an aggregate turnover of less than the recommended amount for purpose of registration under
the GST are referred as_________ .
3. Unregistered dealer cannot claim_________ .
4. In_________ the location of supplier is one country and location of recipient is other country.
5. SEZ stands for_________ .
6. Under_________ goods are purchased from other country.
7. _________ tax is applicable to SEZ sales.
8. ______ of goods refers to the supply of combination of two or more goods and services for a single price
by a taxable individual.
9. _________ is maintained for every registered taxable person on the common portal to credit the deposited
amount.
10. Challan reconciliation is the reconciliation of payment details of______ .

KEY
Will81
I. Multiple Choice
1- (d)
2. (b)
3- (c)
4. (c)
5. (a)
6. (b)
7. (b)
8. (c)
9. (b)
, 10- (C)

II. Fill in the Blanks

1. Composite Dealer
2. Un-registered Dealer
3. Input Tax Credit (ITC)
4. Exports
5. Special Economic Zone
6. Imports
7. Integrated
8. Mixed Supply
9. Electronic Cash Ledger
10. GST.
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154 THEORY AhltiPRACTICE OF GST

—
III. Very Short Questions and Answers

Q1. Who is a Un-Registered Dealer?

Answer :

A dealers having an aggregate turnover of less than the recommended amount for purpose of registration under the
GST are referred as Unregistered Dealers (URDs). Tax invoices cannot be issued by unregistered dealers. URDs cannot
. hange tax or claim input tax credit.

02. What are Exports?

Answer :

Export can be defined as the supply of goods outside the country. Goods are supplied to recipients outside the
country. In this transaction, the location of the supplier is in one country and the location of recipient of goods/services is
m another country.

Q3. What are Imports?

Answer :

Imports can be defined as the goods which are purchased from another country. It refers to all inward supplies of
goods from another country. In case of imports, reverse charges are applicable. The recipient of goods is liable to pay
integrated tax to the government.

04. What is SEZ?

Answer :

SEZ stands for Special Economic Zone. SEZ sales can be defined as sale of goods or services to SEZ. Any outward
supply made to a recipient belonging to SEZ is called an SEZ sale. In Tally.ERP 9, sales voucher is used to record SEZ
sales. Integrated tax is applicable for such sales.

Q5. Write a note on Challan Reconciliation.

Answer :

Challan Reconciliation is the reconciliation of the payment details of GST. The tax payment vouchers which are
recorded for payment of GST and other liabilities can be view through a Challan Reconciliation report. The Payment
details which were left at the time of recording the payment voucher can be defined in challan reconciliation.

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UNIT

4 GETTING STARTED WITH GST

(SERVICES) SNA GROUP
\_ ____ /

( LEARNING OBJECTIVES )

After studying this unit, one would be able to understand,

❖ Determination of Supply of Services and Places of Supply of Services.

❖ Enabling GST and Defining Tax Details.

❖ Transferring Input Tax Credit to GST.

❖ Intra and Inter State Supply of Services.

❖ Cancellation of Supply of Services.

❖ Defining Tax Rates at Master and Transaction Levels.

C INTRODUCTION ~~~)

The American marketing association defines services as “services are the activities, benefits or satisfaction
which are offered for sale and provided in connection with the sale of goods”.

A service is an act or performance offered by one party to another. Although the process may be tied to a
physical product, the performance is essential intangible and does not normally result in ownership of any of
the factors of productions.

Services are applicable for tax as per the Central Government of India. Service is one of the term used in the
full form of GST i.e., Goods and Service Tax. The introduction of GST imposed the taxes on services in a
service tax category. All the services mentioned under the GST law are eligible for service taxes.

The Schedule-II of GST law provided the explaination and determination criterias for the type of supply
of services which would be applicable for service tax. It aims is to eliminate the confusion available in the
current indirect tax system. This schedule helps to determine the type of supply of goods and type of supply
of services. Based on such determination that supply can be treated for tax purpose.

Determinating the place of supply of services is very important for the appropriate calculation of tax. As the
GST is variable and it is different for every state of India. Place of supply of services should be compulsorily
identified.

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156 THEORY AND PRACTICE OF GST

PART-A
_______________ SHORT QUESTIONS WITH SOLUTIONS_______________
Q1. Define Services.
Answer : Model Paper-Ill, Q6

The American marketing association defines services as “services are the activities, benefits or satisfaction which
are offered for sale and provided in connection with the sale of goods”.
A service is an act or performance offered by one party to another. Although the process may be tied to a physical
product, the performance is essential intangible and does not normally result in ownership of any of the factors ofproductions.
Services are applicable for tax as per the Central Government of India. Service is one of the term used in the full
form of GST i.e., Goods and Service Tax. The introduction of GST imposed the taxes on services in a service tax category.
All the services mentioned under the GST law are eligible for service taxes._____________________________________
02. Write a short note on the determination of place of supply of services.
Answer :

Determinating the place of supply of services is very important for the appropriate calculation of tax. As the GST is
■ triable and it is different for every state of India. Place of supply of services should be compulsorily identified. Because
services will be eligible for GST rates based on the area or state in which it is supplied or consumed. Thus, the place of
supply of services is the location ofthe supplier or the location where the services has been delivered, installed or assembled.
The place of supply of services can be identified or determined based on two different types, they are,
1. Intra-State Supply of Services
In intra-state supply of services, the place of supply of services and the location of the supply will be same. For
example, ABC company of Telangana supplied services to XYZ company, of Telangana.
2. Inter-State Supply of Services
In inter-state supply of services, the place of supply of services and the location of the supply will be different. For
example, ABC company of Telangana supplied services to XYZ company of Delhi._______________________________
Q3. What do you mean by intra state supply of services?
Answer : Model Paper-ll, Q2

ntra-State Supply of Services

Intra-State Supply of Services refers to the transactions in which the supplier of the services and the recipient of the
services belong to the same state or union territory. It means, the transaction takes place within the same state.
Example: Alavi Traders Pvt. Ltd. traded or supplied services to a trader of same state i.e., Telangana. This transaction
referred ps intra-state supply of services.
The intra-state supply of services would be divided into two types. They are,
Intra-State Inward Supply of Services
1 Intra-State Outward Supply of Services.
The inward and outward supply of services are recorded by using ‘purchase voucher’ and sale of services are recorded
- ■ using sales voucher.
ntra-State Inward Supply of Services
Intra-State Inward Supply of Services means intra-state receipt of services either by acquisition or by purchase with
r without consideration. The recording of business transactions in intra-state inward supply of services includes central
ix and state tax as per the provisions provided by the GST Law.
ntra-State Outward Supply of Services
Intra-state outward supply refers to the supply of services through sale, exchange, transfer, rental, lease, barter
-nd disposal of services in a business. It takes place within the same state or union territory. The supplier of services and
re recipient must be in the same location, State or Union Territory. Central Tax and State Tax are applicable in these
ransactions.
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UNIT-4 : Getting Started with GST (Services) 157

Q4. What do you mean by inter state supply of services?
Answer :
Inter-State Supply of Services
Inter-State Supply of Services refers to the transactions in which location of the supplier of the services is different
from the location of the recipient of the services. It means the transaction takes place between different states. Since the
transaction of services is inter-state i.e., different states as such, ‘Integrated Tax’ charges is applicable.
Example: Alavi Traders Pvt. Ltd. is a trader registered in Telangana. When it supplies services to a recipient trader
in Allahabad, then it is said to be ‘Inter-State Supply of Services’.
The inter-state supply of services would be divided into two types. They are,
1. Inter-state Inward Supply of Services
2. Inter-state Outward Supply of Services.
The inward and outward supply of seryices are recorded by using ‘purchase voucher’ and sale of services are recordec
by using sales voucher.
Inter-State Inward Supply of Services
Inter-State Inward Supply of Services means inter-state receipt of services either by acquisition or by purchase
with or without consideration. The recording of business transactions in inter-state inward supply of services includes
‘Integrated Tax’ as per the provisions provided by the GST Law.
Inter-State Outward Supply of Services
Inter-state outward supply refers to the supply of services through sale, exchange, transfer, rental, lease, license
barter and disposal of services in a business. In this type of supply, the supplier’s location and the location of supply
services are different. In simple words it can be defined as a situation where the supplier of the services belongs to a
different location and the services are supplied to a different location, such a supply of services is called as ‘Inter-State
Outward Supply of Services’. Integrated Tax is applicable in such transactions._________________________________ I
Q5. Write about cancellation of services.
Answer : Model Paper-I.

Cancellation of Services
Cancellation of services may occurs when a company failed to provide the promised services to other company
client. For example, ABC company promised or contracted to provide cleaning services to XYZ company, but due to i
reason it failed to provide such services, then that situation is results in cancellation of services. At the time of cancellat
of services, debit and credit notes are issued or updated with taxable value and GST.
Types of Cancellation of Services
The cancellation of services are classified into different types which are listed below,
1. r Cancellation of Inward Supply of Services.
2. Cancellation of Outward Supply of Services.
Q6. How tax rates are defined?
Answer : Model Paper-l:

In Tally. ERP 9, when tax details are defined at different levels, the details would be recorded based on the follow
hierarchy or structure,
Transactions ■> Accounting Ledger —> Accounting Group —> Company

Figure: Levels of Transactions in Tally. ERP 9

In all the previous explanations and executions it has been explained how GST details is defined for Alavi Trai
Pvt. Ltd. and created accounting ledgers at company level. In this section, it would be explained what will be the proced:
of taxes in Tally. ERP 9 if a company is providing or supplying more than one service.
Suppose Alavi Traders Pvt. Ltd. decided to host a celebration party for its clients and employees. The comp
party event will be controlled and managed by Apricot Events Pvt. Ltd. They will provide the services like videogra
and photography services. Therefore, Alavi Traders Pvt. Ltd. is going to receive services from Apricot Events Pvt. Ltd
managing party event.
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158 THEORY AND PRACTICE OF GST

4.1 INTRODUCTION - DETERMINATION OF SUPPLY OF SERVICES - DETERMINING PLACE OF

SUPPLY OF SERVICES
Q7. What do you mean by services? Explain briefly about the determination of supply of services and place
of supply of services.
Answer : Model Paper-I, 012(a)

Services
The American marketing association defines services as “services are the activities, benefits or satisfaction which
are offered for sale and provided in connection with the sale of goods”.
A service is an act or performance offered by one party to another. Although the process may be tied to a physical
product, the performance is essential intangible and does not normally result in ownership of any of the factors of productions.
Services are applicable Tor tax as per the Central Government of India. Service is one of the term used in the full
: ?rm of GST i.e., Goods and Service Tax. The introduction of GST imposed the taxes on services in a service tax category.
All the services mentioned under the GST law are eligible for service taxes.
Determination of Supply of Services
The Schedule-II of GST law provided the explaination and determination criterias for the type of supply of services
- hich would be applicable for service tax. It aims is to eliminate the confusion available in the current indirect tax system.
This schedule helps to determine the type of supply of goods and type of supply of services. Based on such determination
fiat supply can be treated for tax purpose. Some of the examples of supplies which may be helpful in determining the
5 apply of services are as follows,
•> Transfer of goods without transfer of title.
•> Leasing, tenancy and licensing for occupying land.
❖ Leasing or letting and building.
❖ Renting immovable property and so on.
All the above are considered as supply of services.
Determination of Place of Supply of Services
Determinating the place of supply of services is very important for the appropriate calculation of tax. As the GST is
variable and it is different for every state of India. Place of supply of services should be compulsorily identified. Because
services will be eligible for GST rates based on the area or state in which it is supplied or consumed. Thus, the place of
apply of services is the location of the supplier or the location where the services has been delivered, installed or assembled.
The place of supply of services can be identified or determined based on two different types, they are,
Intra-State Supply of Services
In intra-state supply of services, the place of supply of services and the location of the supply will be same. For
example, ABC company of Telangana supplied services to XYZ company of Telangana.
2. Inter-State Supply of Services
In inter-state supply of services, the place of supply of services and the location of the supply will be different. For
example, ABC company of Telangana supplied services to XYZ company of Delhi.

4.2 ENABLING GST AND DEFINING TAX DETAILS

□8. Write about the steps involved in enabling GST and defining tax details of services.
Answer : Model Paper-I, 012(b)

In Tally.ERP 9, GST (Services) should be enabled for recording all the tax details. The various steps involved in
mabling GST and Defining Tax Details of a company in Tally.ERP 9 are as follows:
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UNIT-4 : Getting Started with GST (Services) 159

Step: 1 Creation of Company
Create a company in Tally.ERP 9 with the following details,

Under the Field Activity to be Done

Company Name Alavi Traders Pvt. Ltd.
Address No: 506, Terminus Building, Telangana-500004
Financial Year 01-04-2018
Step: 2 Enabling GST and Tax Details
Go to ‘Gateway of Tally’ > Press F11 >
A ‘Company Features’ menu will appears as shown below:
____ Gateiysy of t a;-/....
Company Features

Accounting Features

Inventory Features

Statutory & Taxation

Add-On Features

Quit

Select ‘Statutory & Taxation’ option from the above screen, then the sub-screen “Company Operations
Alteration” will appears as shown below:
Company Operations Alteration

-------------------------------------------------------------------------------- J
Compan . Alavi Traders Pvt. Ltd.

Statutory and Taxation

. Enable Goods and Services Tax (GST) ? Yes Enable Tax Deducted at Source (TDS; ? No
SeValter GST details < EESB SeValter TDS details ? No

Enabie Value Added Tax iVAT) 1 No Enable Tax Collected at Source (TCS) ? No
SeValter VAT details " No SeValter TCS details ? No

Enable excise ? No
SeValter excise details ? No
Enable sendee tax ? Yes
SeValter sewice tax details ? No

Tax Information

PAJVtame tax no.

Corporate Identity Ho (CIN)

fl: Accounts F2: Imentory F3. Statuioi;. F6: Add-Ons

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160 THEORY AND PRACTICE OF GST
Step: 3
Set ‘Yes’ to ‘Enable Goods and Services Tax (GST)’ and Set ‘Yes’ to ‘Set/Alter GST Details’> then enter
±e following details in the ‘GST Details’ menu,

Under the Field Activity to be Done

State Telangana'
Registration Type Regular
GSTIN/UIN 36AAAAA1234A1Z6
(GSTIN no. contains State Code/PAN/Entity No./Z/Checksum)
Applicable From l-July-2017 (By Default)
Set/Alter GST Rate Details Yes
A “GST Details’’ Screen appears as shown below:
GST Details

State Telangana
Registration type Regular
GSTIN/UIN 36AAAAA1234A1Z6

Applicable from 1Jul-2017

Set/alter GST rate details ? Yes

Enable GST Classifications No

Provide LUT/Bond details ? No

After setting “Set/Alter GST Tax Rate Details” as Yes in the above figure, the following screen will be displayed:
1 GST Details

Tax Rate Details

HSN/SAC Details

Description About the Product

HSN/SAC 54321

Tax Details
(From 1-Apr-2017)

Taxability Taxable
Tax Type Rate
Integrated Tax 18 %
Central Tax 9 %
State Tax 9 %
Cess

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UNIT-4 : Getting Started with GST (Services) 161
Step: 4
Enter the details in the “Tax Rate Details” menu as shown in the above screen i.e.,

Tax Rate Details

(i) HSN/SAC Details
Description About the Product
HSN/SAC 54321
Taxability Taxable
(ii) Tax Details
Taxability Taxable
(iii) Tax Type
Integrated Tax 18%
Central Tax 9% (Gets Auto-Filled)
State Tax 9% (Gets Auto-Filled)
Cess Leave as it is

Enter Integrated Tax as 18%. ‘Central Tax’ and ‘State Tax’ will be half of the Integrated Tax which gets auto­
filled.
Step: 5 Press ‘Enter’ or ‘Ctrl+A’ to Accept.

4.3 TRANSFERRING INPUT TAX CREDIT TO GST

Q9. Write the steps involved in transferring Input Tax Credit to GST and explain it with a suitable example.
Answer : Model Paper-Ill, Q12(a)

In the previous execution GST option has been enabled by creating a company i.e., Alavi Traders Pvt. Ltd. Hence,
now day-to-day transactions of the same company can be recorded in Tally.ERP 9.
The credit entries of Service Tax, Excise Duties has to be transferred to Central Tax ledgers and Tax Credit oi
VAT, Surcharge, Cess and other additional taxes should be transferred to State Tax ledger. Therefore, two separate journal
vouchers should be recorded for the opening balances of Central and State Taxes.
With the help of following example, one can understand the procedure in Tally.ERP 9 to transfer the tax credit oi
VAT and CENVAT to state and central tax ledger.
: Following entry should be credited to CENVAT (Service Tax) balance:

Date Particulars
01-06-2018 Voucher: Journal (F7)
On March 2018, Alavi Traders Pvt. Ltd. has a closing CENVAT balance of ? 25,000.
The closing balance of CENVAT (Service Tax Input Credit) ? 25,000 can be carry forwarded by Alavi
Traders Pvt. Ltd. and then it will be considered as CGST credit. Company can use this credit to set-off
its liabilities as per prescribed order.
Solution :

The steps involved in transferring Tax Credit to GST in Tally.ERP 9 are as follows,
Step-1: Creation of Statutory Accounting Details with GST
Select the company in Tally.ERP 9 by pressing F3 from the Company Info. Press F11 > “Statutory & Taxation’
> Set ‘Yes’ to “Enable Goods & Services Tax (GST)” and set ‘Yes’ to “Set/Alter GST Details” > enter the
necessary ‘Service Tax details’ > Press ‘Ctrl+A’ to Accept the details.
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162 THEORY AND PRACTICE OF GST
ctep-2: Creation of Ledgers
Create ‘Central Tax’ Ledger
(i) Go to “Gateway of Tally” > Accounts Info. > Ledgers > Create.
(ii) Enter the following details,

Under the Field Activity to be Done

Name Central Tax
Under Duties & Taxes
Type of Duty/Tax GST
Tax type Central Tax
Rounding Method Not Applicable

Press ‘Ctrl+A’ or Enter to ‘Accept’. The ‘Central Tax’ ledger will be created as shown in the screen below:
’.oTie Central Tax Total Opening Balance
: aS)

Mailinq Details
Jnder Duties & Taxes
(Current Liabilities) Address

oe ofduty/tax GST
Tax type Central Tax
- entory values are affected ? No
percentage of calculation ? 0%

Rounding method J Not Applicable

Provide bank details No
Statutory Information

Tax Registration Details

PAN/IT No.

Accept ?

Opening Balance ( on 1-Apr-2018) :

Yes or No

b) Create ‘Service Tax’ Ledger

Enter the following details,

Under the Field Activity to be Done

Name Service Tax
Under Duties & Taxes
Type of Duty/Tax Service Tax
Tax type Service Tax
Rounding Method Not Applicable

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UNIT-4 : Getting Started with GST (Services) 163
Press ‘Ctrl+A’ or Enter to ‘Accept’. The ‘Service Tax’ ledger will be created as shown in the screen below:
Total Opening Balance
Name Service Tax
(alias)

Mailing Details
Under : Duties & Taxes Name
(Cuirerit Liabilities) Address

Type of duty-tax : Service Tax

Tax head Service Tax
Inventory values are affected ? No

Rounding method ■* Not Applicable

Provide bank details No

Statutory Information
Tax Registration Details
PAN/IT No.

Accept ?

Opening Balance { on 1-Apr-2018) Yes or No

Step-3: Recording of Credit transaction under ‘GST on Services’ in the ‘Journal (F7)’ Voucher
Following steps should be followed to record the Credit transaction under GST on Services in F7 voucher,
(i) Go to ‘Gateway of Tally’ >Accounting Vouchers > F7: Journal.
(ii) Press F2 to change the date.
(iii) Press J: ‘Stat Adjustment’ and select the following options:

Under the Field Activity to be Done

Type of Duty/Tax GST
Nature of Adjustment Increase of Input Tax Credit
Additional Details Transitional Credit
Press ‘Ctrl+A’ to ‘Accept’. The ‘Stat Adjustment’ menu can be seen in the screen below:
Stat Adjustment

Type of duty/tax GST

Nature of adjustment increase of Input Tax Credit

Additional Details

Additional Details Transitional Credit

(i) Press Enter to save and go back to the ‘Journal’ voucher.

(ii) Select ‘Central Tax’ ledger and enter the amount of? 25,000 in the debit side of journal voucher.
(iii) Select ‘Service Tax’ ledger and enter the same amount of? 25,000 in the credit side ofjournal voucher.
(iv) Enter ‘Narration’ if you want.
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3 164 THEORY AND PRACTICE OF GST

By Central Tax 25,000.00

Cur Ba: 16.000.00 Dr

To Service Tax 25,000.00

Cur Bai iS.OOO.OOCr

Narration 25,000.00 25,000.00

Step-4: Press Enter or ‘Ctrl+A’ to Accept.

Step-5: Verification
Go to ‘Gateway of Tally’ > Display > Trial Balance > Press Enter on ‘Current Liabilities’ > Press Enter on
‘Duties & Taxes’ to get the details of Central Tax and Service Tax as shown in the screen below:

Duties <S Taxes

Alavi Traders Pvt. Ltd.
Particulars 1Apt-2018 to 1 Jul-2018
Closinq Balance
Debit Credit

Central Tax 25,000.00

Grand Total 25.000.00 25,000.00

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UNIT-4 : Getting Started with GST (Services) 165

4.4 INTRASTATE SUPPLY OF SERVICES - INTRASTATE INWARD SUPPLY

Q10. What is Intra-State Supply of Services? Explain Intra-State Inward Supply of Services with an
example.
Answer : Model Paper-Ill, Q12(b)

Intra-State Supply of Services

Intra-State Supply of Services refers to the transactions in which the supplier of the services and the recipient of the
services belong to the same state or union territory. It means, the transaction takes place within the same state.
Example: Alavi Traders Pvt. Ltd. traded or supplied services to a trader of same state i.e., Telangana. This transaction
is referred as intra-state supply of services.
The intra-state supply of services would be divided into two types. They are,
1. Intra-State Inward Supply of Services
2. Intra-State Outward Supply of Services.
The inward and outward supply of services are recorded by using ‘purchase voucher’ and sale of services are recorded
by using sales voucher.
Intra-State Inward Supply of Services
Intra-State Inward Supply of Services means intra-state receipt of services either by acquisition or by purchase with
or without consideration. The recording of business transactions in intra-state inward supply of services includes central
tax and state tax as per the provisions provided by the GST Law.
Example
From the following details, pass the necessary entries in Tally.ERP 9:
Date Particulars
01-07-2018 Purchase Voucher:
The Alavi Traders Pvt. Ltd. of Hyderabad, Telangana provided a Advertising services in
Khammam to Excel Enterprises with a budget of ? 1,50,000.18% GST was charged; Reference
Number: CD/986.
Calculate tax liability with considering the following details:
Place of Supplier Alavi Traders Pvt. Ltd., Hyderabad, Telangana.
Supply To Company Excel Enterprises, Khammam, Telangana.
Taxes Central and State Taxes
Solution :
The recipient Excel Enterprises belongs to Khammam, which is in Telangana only. Therefore, the transaction is an
intra-state supply of services, so ‘Central Tax’ and ‘State Tax’ are applicable here.
The following are the steps involved in accounting for intra-state inward supply of services,
Step 1: Creation of Accounting Masters
(a) Create ‘Advertising Services’ Ledger
(i) Go to “Gateway of Tally” > Accounts Info. > Ledgers > Create.
(ii) Enter the following details in the ‘Advertising Services’ ledger, ‘Tax Rate Details’ screens:
Advertising Services
Under the Field Activity to be Done
Name Advertising Services
Under Indirect Expenses
Inventory values are affected No
Is GST Applicable Applicable
Set/Alter GST Details No
Type of Supply Services

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166 THEORY AND PRACTICE OF GST

(iii) Press ‘Enter’ to Accept.
The ‘Advertising Services’ ledger will be created as shown in the screen below:
I I Creation Ala v> Traders Pvt. Ltd.
Name Advertising Services Total Opening Balance
('akasl

Mailing Details
Undec : indirect Expenses Name
Address
inventory values are affected ? No

Country

Statutory Information
Provide bank, details No
Is GST Applicable 2 J Applicable
Set/alter GST Details 2 No
Type of Supply Tax Registration Details
: Services
PAN/IT No
Is service tax applicable 2 J Undefined
Set/alter service tax details 2 No

Accept ?

Opening Balance (on 1-Apr 2018) :

Yes ur No

(b) Create ‘State Tax’ Ledger

Enter the following details in the ‘State Tax’ ledger,

State Tax
Under the Field Activity to be Done
Name State Tax
Under Duties & Taxes
Type of Duty/Tax GST
Tax Type State Tax
Rounding Method Not Applicable
The ‘State Tax’ ledger will be created as shown in the screen below:
Name State Tax Total Opening Balance
(■sli-ssl

Mailing Details
Under Duties & Taxes Name
fCtz/renf Liabilities) Address
Type of duty/tax GST
Tax type : State Tax
Inventory values ate affected ? No
Percentage of calculation ? 0 %

Rounding method J Not Applicable

Provide bank details No
Statutory Information
Tax Registration Details
PANAT No

Accept ?
Opening Balance ( on 1-Apr-2018) : Yes o No

Press ‘Enter’ to Accept.

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UNIT-4 : Getting Started with GST (Services) 167
—
Create Party Ledger viz., ‘Excel Enterprises’
Enter the following details in the ‘Excel Enterprises’ ledger, ‘Tax Registration Details’, ‘GST Details’:
Excel Enterprises
Under the Field Activity to be Done
Name Excel Enterprises
Under Sundry Creditors
Maintain Balances Bill-by-Bill Yes
Default Credit Period Press ‘Enter’
Check for Credit days during voucher entry? No
Inventory Values are affected? No

Tax Registration Details

PAN/IT No. AKGHP9865L
Set/Alter GST Details Yes
GST Details
Registration Type Regular
GSTIN/UIN 36AAAAA1234A1Z6
Party Type Not Applicable
Is a e-Commerce Operator No
The ‘Excel Enterprises’ ledger will be created as shown in the screen below:
Name Excel Enterprises Total Opening Balance
fs/iasj

Mailing Details
Under Sundry Creditors Name Excel Enterprises
Ua&'&es) Address
Maintain balances bill-by-bill ? Yes
Default credit period
Check for credit days during voucher entry ? No
Inventory' values are affected ? No
Country India
State Telangana Pincode

Provide bank details No

Tax Registration Details

PAN/IT No AKGHP98S5L
Set/alter GST details ? Yes
Set/alter semce tax details ? No

Accept ?

Opening Balance ( on 1-Apr-2018) : Yes No

Press ‘Enter’ to Accept.

The ‘GST Details’ screen is shown below:
GST Details

Registration type Regular

GSTIN/UIN 36AAAAA1234A1Z6
Party Type J Hot Applicable
Is a e-Commerce operator ? No

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167 i68 THEORY AND PRACTICE OF GST
Step 2: Transaction of Intra-State Inward Supply of Services
The following steps should be followed to record the ‘Intra-State Inward Supply of Services’ transaction,
Go to ‘Gateway of Tally’ > Accounting Vouchers > F9: Purchase Voucher.
Enter Reference No. : CD/986.
Press F2 to change the date.
Enter ‘Excel Enterprises’ in ‘Party A/c name’ field.
Create ‘Purchase A/c’ in ‘Purchase Ledger’ field.
Select ‘Advertising Services’ under ‘Name of item’.
•ii) Enter amount as ? 1,50,000.
•ui) Press‘Enter’two times.
Select ‘Central Tax’ ledger, the deducted tax amount gets automatically calculated.
Select ‘State Tax’ ledger, the deducted tax amount gets automatically calculated.
Press Enter to Accept.
While remaining on the same screen (F9: Purchase Voucher) Press A: Tax Analysis to view the Tax Calculation
details.
xni) Click F1: Detailed.
The ‘Purchase Voucher’ screen is shown below:

The ‘Tax Analysis’ Report is shown in the screen below:

Tax Analysis

Particulars Taxable Value Tax rate Doty/Tax Value •

i ST Details

Adverting Sewcea (54321) 1.50.000,00 27.000.00

: 'em mme ( Pmdmse Vsee t OD. 000. 00 1.50.000.00
Central Tax $%■ 13.500 00
State Tax 9%. 13,500.00

:: .j m
Total 27,000.00;

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UNIT-4 : Getting Started with GST (Services) 169
Therefore the above execution is an intra-state inward supply of services, the tax details of this transaction can be
seen in ‘GSTR-2’ Report.
To view ‘GSTR-2’ Report,
Go to ‘Gateway of Tally’ > Display > Statutory Reports > GST > GSTR-2. The transaction is recorded under
‘B2B Invoices’. The taxable value is ? 1,50,000, Central Tax value is ? 13,500, State Tax value is ? 13,500 and the Total
‘Tax Amount’ is ? 27,000 as shown in the screen below:

GSTR-2 Uul-2018 to 31 Jul-2018

Returns Summary

IncHei in returns 1
Not relevant for returns 2
Incomplete,%iisr®art in information its be rested) : • ,7 / I 9
Table Particulars Count Taxable Value Integrated Tax Central Tax State Tax Amount Cess Amount Tax Amount Invoice Amount
No, Amount Amount

4 BiBtaices 1 15O(MOO 13,500.00- B(58.a 27000 00 1 77,000.00^

5 Import of Goods Invoices
5 import of Series Invokes
I Credit-Debit Notes
8 Nil Rated Invoices
3 ISO Credit
1011) IDS Credit
10(21 TCS Credit
II ITC Received

12 Tax liability under Reverse Charge on Advance

13 Tax Paid under Reverse Charge on Advance
14 ITC Reversal
C

-C-- C............ \....................................... ~............................. 1......... "............... -

4.4.1 Intrastate Outward Supply

Q11 . What do you mean by Intra-State Outward Supply of services? Explain with a suitable example.
Answer :
Intra-State Outward Supply of Services
Intra-state outward supply refers to the supply of services through sale, exchange, transfer, rental, lease, bartr
and disposal of services in a business. It takes place within the same state or union territory. The supplier of services and
the Recipient must be in the same location, State or Union Territory. Central Tax and State Tax are applicable in these
transactions.
Example
The company Alavi Traders Pvt. Ltd. has the following details. Pass the necessary entries in Tally.ERP 9
and determine its taxability.
Date Particulars
01-07-2018 Sales Voucher:
The Alavi Traders received a catering services at a Board Meeting in Hyderabad with a
budget of? 2,50,000 from CNR Steels Pvt. Ltd. 18% GST was charged; Reference Number:
CD/009.
Calculate tax liability by considering the following details:
Place of Supplier CNR Steels Pvt. Ltd., Hyderabad, Telangana.
Supply To Company Alavi Traders Pvt. Ltd., Hyderabad, Telangana.
Taxes Central and State Taxes

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THEORY AND PRACTICE OF GST
Mntion :
: ’ 91OTS
The recipient Alavi Traders Pvt. Ltd. belongs to Hyderabad, which is in Telangana only. Therefore, the transaction
■ ntra-state transaction and here Central Tax and State Tax are applicable.
The following are the steps involved in accounting for intra-state outward supply of services,
>ep 1: Creation of Accounting Masters
Create ‘Catering Services’ Ledger
(i) Go to “Gateway of Tally” > Accounts Info. > Ledgers > Create.
(ii) Enter the following details in the ‘Catering Services’ ledger and ‘Tax Rate Details’ screens:
Catering Services
Under the Field Activity to be Done
Name Catering Services
Under Indirect Incomes
Inventory values are affected No
Is GST Applicable Applicable
Set/Alter GST Details Yes
Type of Supply Services
Tax Rate Details
(i) HSN/SAC Details
Description Catering Services
HSN/SAC Details 986532
Nature of Transaction Not Applicable
(ii) Tax Details
Taxability Taxable
(iii) Tax Type
Integrated Tax 18%
Central Tax 9% (Gets Auto-Filled)
State Tax 9% (Gets Auto-Filled)
Cess Leave as it is
The ‘Catering Services’ ledger will be created as shown in the screen below:
Name . Catering Services Total Opening Balance |
(abas)

Mailing Details
Under Indirect Incomes Name Catering Services
Address
Inventc^’values are affected
? Ho

Country -* None

Statutory Information
Provide bank details . No
Is GST Applicable ? J Applicable
Set/alter GST Details ? Yes
Type of Supply Services Tax'Registration Details

Is service tax applicable ? J Undefined PAN.-TT No.

Set/alter service tax details ? No
i

.. d be- // ■

Accept ?

Opening Balance ( on 1-Apr-201§) :

Yes o< No

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UN IT-4 : Getting Started with GST (Services) 171
The ‘Tax Rate Details’ screen will be created as shown below:

(b) Create Party’s Ledger viz., CNR Steels Pvt. Ltd.

Enter the following details in the ‘CNR Steels Pvt. Ltd.’ ledger, ‘Tax Registration Details’ screen, ‘GST Details’ screens
CNR Steels Pvt. Ltd.
Under the Field Activity to be Done
Name CNR Steels Pvt. Ltd.
Under Sundry Debtors
Maintain Balances Bill-by-Bill? Yes
Default Credit Period Press ‘Enter’
Check for Credit Days during the voucher entry? No
Inventory Values are affected? No
Tax Registration Details
PAN/ITNo. AKGHP6532L
Set/Alter GST Details Yes
GST Details
Registration Type Regular
GSTIN/UIN 36AAAAA1234A1Z6
Party Type Not Applicable
Is a e-Commerce Operator No
The ‘CNR Steels Pvt. Ltd.’ ledger is seen in the screen below:
Name CNR Steels Pvt. Ltd. Total Opening Balance
fa/iasj

Mailing Details
Under Sundry Debtors Name CNR Steels Pvt Ltd.
Assets) Address
Maintain balances bill-by-bill ? Yes
Default credit period
Check fot credit days during voucher entry ? No
Country India
Inventory values are affected ? No
State Telangana Pincode

Provide bank details No

Tax Registration Details

PAN'TT No. AKGHP6532L
Set/alter GST details ? Yes
Set/alter setvice tax details ? No

Accept ?

Opening Balance (on 1-Apr2018) Yes ty No

Press ‘Enter’ to Accept.

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171 172 THEORY AND PRACTICE OF GST
The ‘GST Details’ is seen in the screen below:
-------------------------------- -------------------- .
GST Details

Registration type Regular

GSTIN/UIN 36AAAAA1234A1Z6
Party Type J Not Applicable
Is a e-Commerce operator No

Step 2: Transaction of Intra-State Outward Supply of Services

The following steps should be followed to record the ‘Intra-State Outward Supply of Services’ transaction,
Go to ‘Gateway of Tally’ > Accounting Vouchers> F8: Sales Voucher.
) Enter Reference No. : CD/009.
ui) Press F2 to change the date.
eens ) Enter ‘CNR Steels Pvt. Ltd.’ in ‘Party A/c name’ field.
Press ‘Ctrl+A’.
i) Create ‘Sales A/c’ in ‘Sales Ledger’ field.
•ii) Select ‘Catering Services’ under ‘Name of item’.
:ii) Enter amount as ? 2,50,000.
a) Press ‘Enter’ two times.
Select ‘Central Tax’ ledger, the deducted tax amount gets automatically calculated.
Select ‘State Tax’ ledger, the deducted tax amount gets automatically calculated.
ui) Press Enter to Accept.
uii) While remaining on the same screen (F8: Sales Voucher) Press A: Tax Analysis to view the Tax Calculation
details.
iv) Click F1: Detailed.
The ‘Sales Voucher’ transaction is shown in the screen below:
HHESSBNhiot Uul-2018
Sunday
Reference no CD/009

-arty A/c name CNR Steels Pvt. Ltd.

Cpenftraiartce 2.96.000.00 Or
Sales ledger Sales A/c

‘lame of Item Quantity Rate ;er Amount

Catering Services 2.50.000.00

Central Tax • 22.500.00

State Tax 22,500.00

■narration: 2,95,000.09

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UNIT-4 : Getting Started with GST (Services) 173
The ‘Tax Analysis’ Report is shown in the screen below:
l<~- i TallyShop Language j • j Control Centre h Support Centre H Help

Tax Analysis

Particulars Taxable Value Tex rate Dutyffax Value t

GST Details

Sales Taxable 2,50,M0.« 45,000.00

Value (Sstes 2 50,000.QQ *>

Certra! Tax 9% 22,
Stsie Tax h 22.5fl0.00

Total 45,000.00

Therefore the above execution is an intra-state outward supply of services, the tax details of this transaction can be
seen in ‘GSTR-1’ Report.
To view ‘GSTR-1 ’ Report,
Go to ‘Gateway of Tally’ > Display > Statutory Reports > GST > GSTR-1. The transaction is recorded
under ‘B2B Invoices’. The taxable value is T 2,50,000, Central Tax value is ? 22,500, State Tax value is ? 22,500 and
the Total ‘Tax Amount’ is ? 45,000 as shown in the screen below:

4.5 INTER-STATE SUPPLY - INTER-STATE INWARD SUPPLY

Q12. Define Inter-State Supply of Services. Explain Inter-State Inward Supply of Services with an example.
Answer :
Inter-State Supply of Services
Inter-State Supply of Services refers to the transactions in which location of the supplier of the services is differen:
from the location of the recipient of the services. It means the transaction takes place between different states. Since the
transaction of services is inter-state i.e., different states as such, ‘Integrated Tax’ charges is applicable.
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174 THEORY AND PRACTICE OF GST

Example: Alavi Traders Pvt. Ltd. is a trader registered in Telangana. When it supplies services to a recipient trader
■ Allahabad, then it is said to be ‘Inter-State Supply of Services’.
The inter-state supply of services would be divided into two types. They are,
Inter-state Inward Supply of Services
1 Inter-state Outward Supply of Services.
The inward and outward supply of services are recorded by using ‘purchase voucher’ and sale of services are recorded
r. using sales voucher.
iter-State Inward Supply of Services
Inter-State Inward Supply of Services means inter-state receipt of services either by acquisition or by purchase
- :th or without consideration. The recording of business transactions in inter-state inward supply of services includes
.-.:egrated Tax’ as per the provisions provided by the GST Law.
Example:
The following are the particulars of the transaction of purchase of services from :

Date Particulars
01-07-2018 Purchase Voucher:
The Alavi Traders Pvt. Ltd. of Hyderabad, Telangana provided a Window Cleaning Services
to Wings Enterprises company of Allahabad, Uttar Pradesh, with a budget of ? 4,00,000.18%
GST was charged; Reference Number: DB/686.
Calculate tax liability with considering the following details:

Place of Supplier Alavi Traders Pvt. Ltd., Hyderabad, Telangana.

Supply To Company Wings Enterprises, Allahabad, Uttar Pradesh.
Taxes Integrated Tax
Solution :

The recipient Wings Enterprises belongs to Allahabad, which is in Uttar Pradesh. Therefore, the transaction is an
-.er-state transfer of services, so ‘Integrated Tax’ is applicable here.
The following are the steps involved in accounting for inter-state inward supply of services:
Step 1: Creation of Accounting Masters
a) Create ‘Cleaning Services’ Ledger
(i) Go to “Gateway of Tally” > Accounting Info. > Ledgers > Create.
(ii) Enter the following details in the ‘Cleaning Services’ ledger, ‘Tax Rate Details’ screens:

Cleaning Services
Under the Field Activity to be Done
Name Cleaning Services
Under Indirect Expenses
Inventory values are affected No
Is GST Applicable Applicable
Set/Alter GST Details Yes
Type of Supply Services
Tax Rate Details
(i) HSN/SAC Details
Description Cleaning Services
HSN/SAC Details 998865
Nature of Transaction Not Applicable

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UNIT-4 : Getting Started with GST (Services) 1

(ii) Tax Details

Taxability Taxable
(iii) Tax Type
Integrated Tax 18%
Central Tax 9% (Gets Auto-Filled)
State Tax 9% (Gets Auto-Filled)
Cess Leave as it is
The ‘Cleaning Services’ ledger will be created as shown in the screen below:

Name Cleaning Services Total Opening Balance

(alias)

Mailing Details
Under Indirect Expenses Name
Address
Inventory values are affected ? Mp

Country

Statutory Information
Provide bank details No
Is GST Applicable ? J Applicable
Set/alter GST Details ? Yes
Tax Registration Details
Type of Supply Services
PAN/IT No
Is service tax applicable ? J Undefined
Set/alter service tax details ? Mo

Accept?

Opening Balance ( on 1-Apr-2018) : Yes c> fto

The ‘Tax Rate Details’ screen will be created as shown below:

Tax Rate Details

HSN/SAC Details

Description : Cleaning Services

HSN/SAC : 998865
Nature of transaction J Not Applicable

Tax Details
(From 1-Apr-2017)

Taxability Taxable

Tax Type Rate

Integrated Tax 18 %
Central Tax 9%
State Tax 9%
Cess KI %•

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6 THEORY AND PRACTICE OF GST
Create Party’s Ledger viz., ‘Wings Enterprises’
Enter the following details in the ‘Wings Enterprises’ ledger, ‘Tax Registration Details’ screen, ‘GST
details’ screens:
Wings Enterprises
Under the Field Activity to be Done
Name Wings Enterprises
Under Sundry Creditors
Maintain Balances Bill-by-Bill? Yes
Default Credit Period Press ‘Enter’
Check for Credit Days during the voucher entry? No
Inventory Values are affected? No
Tax Registration Details
PAN/ITNo. AAAAA9865L
Set/Alter GST Details Yes
GST Details
Registration Type Regular
GSTIN/UIN 09AAAAA1234A1Z5
Party Type Not Applicable
Is a e-Commerce Operator No
Press ‘Enter’ to Accept.
The ‘Wings Enterprises’ ledger is seen in the screen below:
1 Ledge-r Creation Alavi Traders Pvt. Ltd.
Name Wings Enterprises Total Opening Balance
fates)

Mailing Details
Under Sundry Creditors Name Wings Enterprises
babies) Address : Allahabad
Maintain balances cili-fcy-bitt ? Yes

Check for credit days dunng voucher entry ? Ho

Inventory values are affected ? No Country India
State UttarPradesh Pincade

Provide bank details No

Tax Registration Details

PAN/ITNo. AAAAA9865L
Set/alter GST details ? Yes
Set/alter service tax details ? Ho

Accept ?

Opening Balance I on 1-Apr-2018) :

The ‘GST Details’ menu appears as shown in the screen below:

GST Details

Registration type Regular

GSTIN/UIN : 09AAAAA1234A1Z5

Party Type J Not Applicable

Is a e-Commerce operator ?C3HI

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UNIT-4 : Getting Started with GST (Services) 177
(c) Create ‘Integrated Tax’ Ledger
Enter the following details in the ‘Integrated Tax’ ledger,

Integrated Tax
Under the Field Activity to be Done
Name Integrated Tax
Under Duties & Taxes
Type of Duty/Tax GST
Tax Type Integrated Tax
Rounding Method Not Applicable

Press ‘Enter’ to Accept.

The ‘Integrated Tax’ ledger will be created as shown in the screen below:
Name Integrated Tax Total Opening Balance
(alias)

Mailing Details
Under Duties & Taxes Name
(Current Liabilities) Address

.Type of duty/tax GST

Tax type Integrated Tax
Inventory values are affected ? No
Percentage of calculation ? 0%

Rounding method J Not Applicable

Provide bank details , No

Statutory Information
Tax Registration Details
PAN,.'IT No

Accept ?

Opening Balance ( on 1-Apr-2018)

Yes © No

Step 2: Transaction of Inter-State Inward Supply of Services

The following steps should be followed to record the ‘Inter-State Inward Supply of Services’ transaction,
(i) Go to ‘Gateway of Tally’ > Accounting Vouchers > F9: Purchase Voucher.
(ii) Enter Reference No. : DB/686.
(iii) Press F2 to change the date.
(iv) Enter ‘Wings Enterprises’ in ‘Party A/c name’ field.
(v) Press ‘Ctrl+A’.
(vi) Create ‘Purchase A/c’ in ‘Purchase Ledger’ field.
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L77 THEORY AND PRACTICE OF GST
178
(vii) Select ‘Cleaning Services’ under ‘Name of item’.
(viii) Enter amount as T 4,00,000.
(ix) Press ‘Enter’ two times.
(x) Select ‘Integrated Tax’ ledger, the deducted tax amount gets automatically calculated.
(xi) Press Enter to Accept.
(xii) While remaining on the same screen (F9: Purchase Voucher) Press A: Tax Analysis to view the Tax Calculation
details.
(xiii) Click F1: Detailed.
The ‘Purchase’ Voucher transaction is shown in the screen below:

nee

The ‘Tax Analysis’ Report is shown in the screen below:

No

Therefore the above execution is an inter-state inward supply of services. The tax details of this transaction can be
seen in ‘GSTR-2’ Report.
Inorder to view ‘GSTR-2’ Report,
Go to ‘Gateway of Tally’ > Display > Statutory Reports > GST > GSTR-2. The transaction is recorded
under ‘B2B Invoices’. The taxable value will be ? 4,00,000, Integrated Tax value will be ? 72,000 and the Total ‘Tax
.Amount’ will be T 72,000.
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UNIT-4 : Getting Started with GST (Services) 179

4.5.1 Interstate Outward Supply of Services ________________

Q13 . What is Inter-State Outward Supply of Services? Explain with an example.
Answer :
Inter-State Outward Supply of Services
Inter-state outward supply refers to the supply of services through sale, exchange, transfer, rental, lease, license
barter and disposal of services in a business. In this type of supply, the supplier’s location and the location of supply of
services are different. In simple words it can be defined as a situation where the supplier of the services belongs to 1
different location and the services are supplied to a different location, such a supply of services is called as ‘Inter-StaK
Outward Supply of Services’. Integrated Tax is applicable in such transactions.
Example
From the following details calculate tax liability for inter-state outward supply of services:

Date Particulars
01-07-2018 Sales Voucher:
The Alavi Traders Pvt. Ltd. of Hyderabad, Telangana received a contract of Support
Services in crop cultivation and production of rubber from Bin-Trif Pvt. Ltd. of Panjim,
Goa, with a budget of? 5,00,000.18% GST was charged; Reference Number: GS/564.
Solution :
The recipient ‘Bin-Trif Pvt. Ltd. ’ belongs to Panjim, which is in Goa. The given transaction is an inter-state outwarc
supply of services because ‘Bin-Trif Pvt. Ltd.’ is a trader of other state. So ‘Integrated Tax’ is applicable here.
The following are the steps involved in accounting for inter-state outward supply of services:
Step 1: Creation of Accounting Masters
(a) Create ‘Support Services’ Ledger
(i) Go to “Gateway of Tally” > Accounts Info. > Ledgers > Create.
(ii) Enter the following details in the ‘Support Services’ ledger, ‘Tax Rate Details’ screens:

Support Services
Under the Field Activity to be Done
Name Support Services
Under Indirect Incomes
Inventory values are affected No
Is GST Applicable Applicable
Set/AIter GST Details Yes
Type of Supply Services
Tax Rate Details
(i) HSN/SAC Details
Description Support Services to Crop Production
HSN/SAC Details ... 968532
Nature of Transaction Not Applicable
(ii) Tax Details
Taxability Taxable
(iii) Tax Type
Integrated Tax 18%
Central Tax 9% (Gets Auto-Filled)
State Tax 9% (Gets Auto-Filled)
Cess Leave as it is

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.80 THEORY AND PRACTICE OF GST

The ‘Support Services’ ledger will be created as shown in the screen below:
Total Opening Balance
■ (alias)

Mailina Details
Under Indirect Incomes Name
Address
Inventory values are affected ? No

Country

Statutory Information
Provide bank details No
Is GST Applicable ? J Applicable
Set/alter GST Details ? Yes
Type of Supply Services Tax Registration Details

Is service tax applicable ? J Undefined PAN/fT No

Set/alter service tax details ? No

Accept ?

Opening Balance (on 1-Apr-2018) : Yes of No

The ‘Tax Rate Details’ screen will be created as shown below:

Tax Rate Details

HSN/SAC Details

Description Support Services to Crop Production

HSN/SAC 968532
Nature of transaction J Not Applicable

Tax Details
(From < ■Apr-20'! 7>

Taxability Taxable

Tax Type Rate

Integrated Tax 18 %
Central Tax' 9 %
State Tax 9 %
Cess ■0%
b) Create Party’s Ledger viz., ‘Bin-Trif Rubber Industries’
Enter the following details in the ‘Bin-Trif Rubber Industries’ ledger, ‘Tax Registration Details’ column, ‘GST
Details’ screens:
Bin-Trif Rubber Industries
Under the Field Activity to be Done
Name Bin-Trif Rubber Industries
Under Sundry Debtors
Maintain Balances Bill-by-Bill? Yes
Default Credit Period Press ‘Enter’
Check for Credit Days during the voucher entry? No
Inventory Values are affected? No

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UNIT-4 : Getting Started with GST (Services) 181

Tax Registration Details
PAN/ITNo. GHMAO1234L
Set/Alter GST Details Yes
GST Details
Registration Type Regular
GSTIN/UIN 30AAAAA1234A1Z8
Party Type Not Applicable
Is a e-Commerce Operator No
Press ‘Enter’ to Accept.
The ‘Bin-Trif Rubber Industries’ ledger is seen in the screen below:
Ledger Creation Alavi Traders Pvt. Ltd.
Name . Bin-Trif Rubber Industries Total Opening Balance
(alas) :

Mailinci Details
Under Sundry Debtors Name Bin-Trif Rubber Industries
(Current Assets} Address Panjim
Maintain balances bill-by-cill ? Yes
Default credit period
Check fw credit days du ring voucher entry ? No
Inventory values are affected ? No
Country India
State Goa Pincode

Provide bank details No

Tax Registration Details

PAN® No. GHHAO1234L
Set/alter GST details ? Yes
Set/alter service rax details ? Ho

Accept?

Opening Balance (on 1-Apr-2018) :

The ‘GST Details’ menu appears as shown in the screen below:

GST Details

Registration type Regular

GSTIN/UW. 30AAAAA1234A1Z8
Party Type ■* Not Applicable
Is a e-Commerce operator

(C) Create ‘Integrated Tax’ Ledger

Enter the following details in the ‘Integrated Tax’ ledger,
Integrated Tax
Under the Field Activity to be Done
Name Integrated Tax
Under Duties & Taxes
Type of Duty/Tax GST
Tax Type Integrated Tax
Rounding Method Not Applicable
Press‘Enter’to Accept.
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132 THEORY AND PRACTICE OF GST
Step 2: Transaction of Inter-State Outward Supply of Services
The following steps should be followed to record the ‘Inter-State Outward Supply of Services’ transaction,
Go to ‘Gateway of Tally’ >Accounting Vouchers > F8: Sales Voucher.
Enter Reference No. : GS/564.
Press F2 to change the date.
Enter ‘Bin-Trif Rubber Industries’ in ‘Party A/c name’ field.
Press ‘Ctrl+A’.
Create ‘Sales A/c’ in ‘Sales Ledger’ field.
Select ‘Support Services’ under ‘Name of item’.
,:i) Enter amount as ? 5,00,000.
Press ‘Enter’ two times.
i Select ‘Integrated Tax’ ledger, the deducted tax amount gets automatically calculated.
Press Enter to Accept.
While remaining on the same screen (F8: Sales Voucher) Press A: Tax Analysis to view the Tax Calculation
details.
x_:i) Click F1: Detailed.
The ‘Sales’ Voucher transaction is shown in the screen below:

Retase iw„ GS/564 Sunday!

Party A/c name Bin-Trif Rubber Industries

CiWrf fralmce . 5,M000.00 &
Sales ledger Sales A/c

Name of Item Quantity Rate per Amount

Support Services • 5.K.MW

Integrated Tax

Narration ■ : ■ i •... ' ' 5,90,000.00

The ‘Tax Analysis’ Report is shown in the screen below:

I Tax Analysis Alavi Traders Pvt. Ltd. Ctrl EM □

Tax Analysis

Particulars Taxable Value Tax rate Duty/Tax Value

GST Details

............. 5.00.000 00 a.aw

ii&z (Sates Vatee 5 OO.O.OO1
/-Tfegrafed Tax MWOOO

Total M.MO.M

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UNIT-4 : Getting Started with GST (Services) 183

Therefore, the above execution is an inter-state outward supply of services, the tax details of this transaction can be
seen in ‘GSTR-1’ Report.
In order to view ‘GSTR-1 ’ Report,
Go to ‘Gateway of Tally’ > Display > Statutory Reports > GST > GSTR-1. The transaction is recorded
under ‘B2B Invoices’. The taxable value will be ? 5,00,000, Integrated Tax value will be ? 90,000 and the Total ‘Tax
Amount’ will be ? 90,000.
4.6 CANCELLATION OF SERVICES _________ ____________________
Q14. Write in detail about cancellation of services.
Answer : Model Paper-ll, Q12(a)

Cancellation of Services
Cancellation of services may occurs when a company failed to provide the promised services to other company or
client. For example, ABC company promised or contracted to provide cleaning services to XYZ company, but due to an>
reason it failed to provide such services, then that situation is results in cancellation of services. At the time of cancellatior
of services, debit and credit notes are issued or updated with taxable value and GST.
Debit Note
Debit note is issued by a supplier of services to record the addition or increase made in taxable value and GST
charged in original invoice.
Credit Note
Credit note is issued by a supplier of services to record the decrease or reduction made in taxable value and GST
charged in original invoice.
Requirements for Cancellation of Services
The basic requirements for cancellation of services in debit notes and credit notes are as follows,
1. The document should be highlighted as an important one. Ex: Revised Invoice.
2. Details of supplier like name, address and GSTIN.
3. Sequential numbering for financial year in a alphabetical or numeral form.
4. Details of recipient if he is registered. It may includes his name, address, delivery address, GSTIN etc.
5. Details of recipient if he is un-registered. It may includes, his name, address, delivery address, name of state, pin
code etc.
6. Date and serial number of original invoice or bill of supply.
7. Details of rate of tax, taxable value of services and amount of tax to be credited or debited to the recipient.
8. Supplier’s digital signature or normal signature.
Types of Cancellation of Services
I? The cancellation of services are classified into different types which are listed below,
1. Cancellation of Inward Supply of Services.
2. Cancellation of Outward Supply of Services.
4.6.1 Cancellation of Inward Supplies
Q15. From the following details pass the necessary transactions for ‘Cancellation of Intra-State Inwarc
Supply of Services with GST’ in Tally.ERP 9:
Date Particulars
01-07-2018 Purchase Voucher:
The Alavi Traders Pvt. Ltd. of Hyderabad, Telangana taken the contract to
provide a Advertising services in Khammam to Excel Enterprises with a
budget of? 1,50,000.18% GST was charged; Reference Number: CD/986.
01-07-2018 Debit Note Voucher:
The Alavi Traders Pvt. Ltd. failed to provide the Advertising Services to
Excel Enterprises as per the terms and conditions of the contract amount
of ? 1,50,000 against the Bill No. CD/986, with 18% GST, state tax and
central tax.

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184 THEORY AND PRACTICE OF GST

Answer :
The given problem is solved in the previous execution without cancellation.
For remaining answer refer Unit-IV, Page No. 165, Q.No. 10, Topic: Example.
In this problem the Alavi Traders Pvt. Ltd. failed to provide ‘Intra-State Inward Supply of Services’ to client
Excel Enterprises, so the transaction has to be cancelled. Since, the transaction is within the state or union territory, the
transaction is under intra-state inward supply of services. In the current case the transaction is recorded in a Debit Note.
For ‘Cancellation of Intra-State Inward Supply of Services’ following steps should be followed,
Step 1: Setting of Accounting Features
In this step, first active Debit and Credit Notes,
Go to “Gateway of Tally” > F11: Features > click F1: Accounting Features.
ii) Change the following options from the setting menu of ‘Accounting Features’,
Accounting Features
Under the Field Activity to be Done
Use Debit and Credit Notes Yes
Record Credit Notes in Invoice Mode Yes
Record Debit Notes in Invoice Mode Yes
The following screen shows the ‘Accounting Features’ setting:
Company Alavi Traders Pvt. Ltd,

Accounting Features

General Invoicing
Maintain accounts only ? Ho Enable invoicing ? Yes
Integrate accounts and inventory Record purchases in invoice mode ? Yes
? Yes
Use Income and Expenses Ac instead of Profit and Loss A/c Use debit and credit notes ? Yes
? No
Record credit notes in invoice mode ? Yes
Enable multi-currency ? No Record debit notes in invoice mode ’KSI
Outstanding Management
Budqets and Scenario Management
Maintain bill-wise details ? Yes Maintain budqets and controls ? No
For non-trading accounts also ? No
Use reversing journals and optional vouchers ? No
Activate interest calculation ? Ho
Use advanced parameters ? No Bankinq Features

Cost/Profit Centres Management Enable cheque printing ? Yes

Maintain payroll Set/alter transaction types ? No
? No
Maintain cost centres Set/alter banking features ? No
? No
Use cost centre for icb costinq ? No Set/alter post-dated transaction features ? No
Maintain more than one payroll or cost cateqory ? No
Use pre-defined cost centre allocations in transactions ? No Other Features
Show opening balance for revenue items in reports ? No Enable zero-valued transactions ? Ho
Maintain multiple mailing details for company and ledgers ? No
Set/alter company mailing details ? No
Enable company logo ? No

Ft: .Accounts. F2: Inventory F3: Statutory F6: Add-Ons

Step 2: Transaction for Cancellation of Services in Intra-State Inward Supply of Services

For ‘Cancellation of Services’ following transactions should be carried out,
Go to ‘Gateway of Tally’ > Accounting Vouchers > F9: Debit Note.
:i) Press F2 to change the date.
:ii) Enter ‘Original Invoice No.’: CD/986, and ‘Original Invoice Date’ as 01-07-2018.
:v) Enter ‘Excel Enterprises’ in ‘Party A/c Name’ field.
Select ‘Advertising Services’ ledger under ‘Particulars’.
i Enter amount as ? 1,50,000.
• ii) Press‘Enter’.
■ iii) Press ‘A: As Voucher’ from the right side function keys of ‘Debit Note’ voucher.

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UNIT-4 : Getting Started with GST (Services) 185

(ix) Then the ‘Bill-wise Details’ screen appears > Select “Agst Ref.” from the list of ‘Type of Ref’ > Select the Bill
No. ‘CD/986’ from the list of‘Pending Bills’.
The ‘Bill-Wise Details’ is shown in the screen below:
Excel Enterprises
Bill-wise Details for
Upto ? 1,77,000.00 Dr
Type of Ref Name Due Date or Amount Dr/

0
New Ref 1

1,77,000.00 Dr

(x) Press ‘Ctrl+A’ to Save.

(xi) Select ‘State Tax’ ledger, the deducted tax amount gets automatically calculated.
(xii) Select ‘Central Tax’ ledger, the deducted tax amount gets automatically calculated,
(xiii) Press A: Tax Analysis to view the tax calculation details.
(xiv) Press F1: Detailed.
(xv) Type Narration if required.
(xvi) Press ‘Esc’.
The ‘Debit Note’ voucher is shown in the screen below:

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186 THEORY AND PRACTICE OF GST
Therefore the above execution is a Debit Note of‘Cancellation of Intra-State Inward Supply of Services’, the tax
implications of this transaction can be seen in ‘GSTR-2’ Report.
To view ‘GSTR-2’ Report,
Go to ‘Gateway of Tally’ > Display > Statutory Reports > GST > GSTR-2.
The transaction is recorded under ‘Credit/Debit Notes’. The taxable value is ? 1,50,000, Central Tax value
is ? 13,500, State Tax value is ? 13,500 and the Total ‘Tax Amount’ is ? 27,000 as shown in the screen below:

4.6.2 Partial Cancellation

Q16. From the following details pass the transactions for ‘Partial Cancellation of Inter-State Inward Supply
of Services with GST’ in Tally.ERP 9:

Date Particulars
31-06-2018 Purchase Voucher:
The Alavi Traders Pvt. Ltd. of Hyderabad, Telangana taken the contract to provide a
Window Cleaning Services to Wings Enterprises company of Allahabad, Uttar Pradesh,
with a budget of? 4,00,000. 18% GST was charged; Reference Number: DB/686.
01-07-2018 Debit Note Voucher:
The Alavi Traders Pvt. Ltd. failed to provide the Window Cleaning Services to Wings
Enterprises as per the terms and conditions of the contract, the partial completed
contract amounted to ? 3,00,000 received on 01-07-2018 against the Bill No. DB/686,
with 18% GST, integrated tax.
Knswer :

The given problem is solved in the previous execution without cancellation.

For remaining answer refer Unit-IV, Page No. 174, Q.No. 12, Topic: Example.
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UNIT-4 : Getting Started with GST (Services) _____ _ _____ 1ST

In this problem the Alavi Traders Pvt. Ltd. failed to provide ‘Inter-State Inward Supply of Services’ to client Wings
Enterprises, so the transaction has to be cancelled. Since, the transaction is in different states, the transaction is under
inter-state inward supply of services. In this case the transaction is recorded in a Debit Note. For ‘Partial Cancellation of
Inter-State Inward Supply of Services’ following steps should be followed:
Stop 1: Setting of Accounting Features
In this step, first active Debit and Credit Notes,
(•) Go to “Gateway of Tally” > F11: Features > click F1: Accounting Features.
(ii) Change the following options from the setting menu of ‘Accounting Features’,
Accounting Features
Under the Field Activity to be Done
Use Debit and Credit Notes Yes
Record Credit Notes in Invoice Mode Yes
Record Debit Notes in Invoice Mode Yes
Stop 2: Transaction for Partial Cancellation of Services in Inter-State Inward Supply of Services
For ‘Partial Cancellation of Services’ following transactions should be carried out,
(•) Go to ‘Gateway of Tally’ > Accounting Vouchers > F9: Debit Note.
(«) Press F2 to change the date.
(iii) Enter ‘Original Invoice No.’: DB/686, and ‘Original Invoice Date’ as 01-07-2018.
(iv) Enter ‘Wings Enterprises’ in ‘Party A/c Name’ field.
(v) Select ‘Cleaning Services’ ledger under ‘Particulars’.
(vi) Enter amount as ? 3,00,000.
(vii) Press ‘Enter’.
(viii) Press ‘A: As Voucher’ from the right side function keys of ‘Debit Note’ voucher.
(ix) Then the ‘Bill-wise Details’ screen appears > Select “Agst Ref.” from the list of ‘Type of Ref’ > Select the Bill
No. ‘DB/686’ from the list of‘Pending Bills’
The ‘Bill-Wise Details’ is shown in the screen below:
Bill-wise Details tor Wings Enterprises
Upto If 3,54,000.00 Dr
Type of Ref Name Due Date or Amount Dr/

Agst Ref 2

New Ref 2

3,54,000.00 Dr

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188 THEORY AND PRACTICE OF GST
(x) Press ‘Ctrl+A’ to Save.
(xi) Select ‘integrated Tax’ ledger, the deducted tax amount gets automatically calculated.
(xii) Press A: Tax Analysis to view the tax calculation details.
(xiii) Press F1: Detailed.
(xiv) Type Narration if required.
(xv) Press ‘Esc’.
The ‘Debit Note’ voucher is shown in the screen below:
■KSnSlHo 2 MOW
Onginal invoice no DB-686 Date : l-Jul-2018 Sunday

Party A/c name : Wings Enterprises

Cwwtbtiance 1.18.000.00 Cr

Particulars Rate per Amount

Cleaning Services 3,00.000.00

Integrated Tax 54,000.00

Provide GST details Ho

Narration 3,54,000.00

Press ‘Enter’ to Accept.

Therefore, the above execution is a Debit Note of‘Partial Cancellation of Inter-State Inward Supply of Services’,
:he tax implications of this transaction can be seen in ‘GSTR-2’ Report.
To view ‘GSTR-2’ Report,
Go to ‘Gateway of Tally’ > Display > Statutory Reports > GST > GSTR-2.
The.transaction is recorded under ‘Credit/Debit Notes’. The taxable value will be ? 3,00,000, Integrated Tax
■ alue will be ? 54,000, and the Total ‘Tax Amount’ will be 54,000.

4.6.3 Cancellation of Outward Supply of Services

Q17. Provide the required transactions for ‘Cancellation of Intra-State Outward Supply of Services with
GST’ in Tally.ERP 9:

Date Particulars
01-07-2018 Sales Voucher:
The Alavi Traders received the contract to provide a Catering Services at a Board
Meeting in Hyderabad with a budget of ? 2,50,000 from CNR Steels Pvt. Ltd. 18%
GST was charged; Reference Number: CD/009.
01-07-2018 Credit Note Voucher:
The Alavi Traders Pvt. Ltd. failed to provide the Catering Services to CNR Steels Pvt.
Ltd. as per the terms and conditions of the contract amounted to ? 2,50,000 received
against the Bill No. CD/009, with 18% GST, state tax and central tax.

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UNIT-4 : Getting Started with. GST (Services) 189

Answer :
The given problem is solved in the previous execution without cancellation.
For remaining answer refer Unit-IV, Page No. 169, Q.No. 11, Topic: Example.
In this problem the Alavi Traders Pvt. Ltd. failed to provide ‘Intra-State Outward Supply of Services’ to client CNR
Steels Pvt. Ltd., so the transaction has to be cancelled. Since, the transaction is in same location or state, the transaction is
under intra-state outward supply of services. In this case the transaction is recorded in a Credit Note. For ‘Cancellation of
Intra-State Outward Supply of Services’ following steps should be followed:
Step 1: Setting of Accounting Features
First Active Debit and Credit Notes,
(i) Go to “Gateway of Tally” > F11: Features > click F1: Accounting Features.
(ii) Change the following options from the setting menu of ‘Accounting Features’,
Accounting Features
Under the Field Activity to be
Done
Use Debit and Credit Notes Yes
Record Credit Notes in Invoice Mode Yes
Record Debit Notes in Invoice Mode Yes
Step 2: Transaction for Cancellation of Services in Intra-State Outward Supply of Services
For ‘Cancellation of Outward supply of Services’ following transactions should be carried out,
(i) Go to ‘Gateway of Tally’ >Accounting Vouchers > F8: Credit Note.
(ii) Press F2 to change the date.
(iii) Enter ‘Original Invoice No.’: CD/009, and ‘Original Invoice Date’ as 01-07-2018.
(iv) Enter ‘CNR Steels Pvt. Ltd.’ in ‘Party A/c Name’ field.
(v) Select ‘Catering Services’ ledger under ‘Particulars’.
(vi) Enter amount as ? 2,50,000.
(vii) Press ‘Enter’.
(viii) Press ‘A: As Voucher’ from the right side function keys of ‘Credit Note’ voucher.
(ix) Then the ‘Bill-wise Details’ screen appears > Select “Agst Ref.” from the list of‘Type of Ref’ > Select the Bif
No. ‘CD/009’ from the list of‘Pending Bills’.
The ‘Bill-Wise Details’ is shown in the screen below:
Bill-wise Details for CNR Steels Pvt. Ltd.
Upto ? 2,50,000.00 Cr

Type of Ref Name Due Date, or Amount Dr;

Credit Have Cr

Agst Ref

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190 THEORY AND PRACTICE OF GST

(x) Press ‘Ctrl+A’ to Save.
(xi) Select ‘State Tax’ ledger, the deducted tax amount gets automatically calculated.
i xii) Select ‘Central Tax’ ledger, the deducted tax amount gets automatically calculated.
(xiii) Press A: Tax Analysis to view the tax calculation details.
(xiv) Press F1: Detailed.
(xv) Type Narration if required.
( xvi) Press ‘Esc’.
The ‘Credit Note’ voucher is shown in the screen below:

(xvii) Press ‘Enter’to Accept.

Therefore the above execution is a Credit Note of‘Cancellation of Intra-State Outward Supply of Services’, the
tax implications of this transaction can be seen in ‘GSTR-1’ Report.
To view ‘GSTR-1 ’ Report,
(/) to ‘Gateway of Tally’ > Display > Statutory Reports > GST > GSTR-1.
The transaction is recorded under ‘Credit/Debit Notes’. The taxable value will be ? 2,50,000, State Tax value will
be ? 22,500, Central Tax value will be ? 22,500, and the Total ‘Tax Amount’ will be ? 45,000.______________________
Q18. Provide the necessary transactions for ‘Cancellation of Inter-State Outward Supply of Services with
GST’ in Tally.ERP 9:

Date Particulars
01-07-2018 Sales Voucher:
The Alavi Traders Pvt. Ltd. of Hyderabad, Telangana received a contract of Support
Services in crop cultivation and production of rubber from Bin-Trif Pvt. Ltd. of Panjim,
Goa, with a budget of? 5,00,000. 18% GST was charged; Reference Number: GS/564.
01-07-2018 Credit Note Voucher:
The Alavi Traders Pvt. Ltd. failed to provide the Support Services in crop cultivation
and production of rubber to Bin-Trif Pvt. Ltd. as per the terms and conditions of the
contract amounted to ? 5,00,000 received against the Bill No. GS/564, with 18% GST,
integrated tax.

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UNIT-4 : Getting Started with GST (Services) 191

Answer :
The given problem is solved in the previous execution without cancellation.
For remaining answer refer Unit-IV, Page No. 179, Q.No. 13, Topic: Example.
In this problem the Alavi Traders Pvt. Ltd. failed to provide ‘Inter-State Outward Supply of Services’ to client Bin-
Trif Pvt. Ltd., so the transaction has to be cancelled. Since, the transaction is in different states, the transaction is under
inter-state outward supply of services. In this case the transaction is recorded in a Credit Note. For ‘Cancellation of Inter-
State Outward Supply of Services’ following steps should be followed:
Step 1: Setting of Accounting Features
First Active Debit and Credit Notes,
(i) Go to “Gateway of Tally” > F11: Features > click F1: Accounting Features.
(ii) Change the following options from the setting menu of ‘Accounting Features’,
Accounting Features
Under the Field Activity to be Done
Use Debit and Credit Notes Yes
Record Credit Notes in Invoice Mode Yes
Record Debit Notes in Invoice Mode Yes .
Step 2: Transaction for Cancellation of Services in Inter-State Outward Supply of Services
For ‘Cancellation of Services’ following transactions should be carried out,
(i) Go to ‘Gateway of Tally’ > Accounting Vouchers > F8: Credit Note.
(ii) Press F2 to change the date.
(iii) Enter ‘Original Invoice No.’: GS/564, and ‘Original Invoice Date’ as 01-07-2018.
(iv) Enter ‘Bin-Trif Pvt. Ltd.’ in ‘Party A/c Name’ field.
(v) Select ‘Support Services’ ledger under ‘Particulars’.
(vi) Enter amount as ? 5,00,000.
(vii) Press ‘Enter’.
(viii) Press ‘A: As Voucher’ from the right side function keys of ‘Credit Note’ voucher.
(ix) Then the ‘Bill-wise Details’ screen appears > Select “Agst Ref.” from the list of‘Type of Ref’ > Select the Bill
No. ‘GS/564’ from the list of‘Pending Bills’
The ‘Bil’-Wise Details’ is shown in the screen below:
Bin-Trif Rubber Industries
Bill-wise Details for
Upto T 5.00,000.00 Cr
Type of Ref Name Due Date or Amount Dr/
- . Credit PaCr

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192 THEORY ANO PRACTICE OF GST

(x) Press ‘Ctrl+A’ to Save.
(xi) Select ‘Integrated Tax’ ledger, the deducted tax amount gets automatically calculated.
(xii) Press A: Tax Analysis to view the tax calculation details.
(xiii) Press F1: Detailed.
(xiv) Type Narration if required.
(xv) Press ‘Esc’.
The ‘Credit Note’ voucher is shown in the screen below:

(xvi) Press ‘Enter to Accept.

Therefore, the above execution is a Credit Note of‘Cancellation of Inter-State Outward Supply of Services’, the
tax implications of this transaction can be seen in ‘GSTR-1’ Report.
To view ‘GSTR-1’ Report,
Go to ‘Gateway of Tally’ > Display > Statutory Reports > GST > GSTR-1.
The transaction is recorded under ‘Credit/Debit Notes’. The taxable value will be ? 5,00,000, Integrated Tax value
will be ? 90,000 and the Total ‘Tax Amount’ will be ? 90,000.

4.7 DEFINING TAX RATES AT MASTER AND TRANSACTION LEVELS

Q19. Explain how tax rates are defined at masters and transaction levels.
Answer : Model Paper-ll, Q12(b)

In Tally. ERP 9, when tax details are defined at different levels, the details would be recorded based on the following
hierarchy or structure,
Transactions ■> Accounting Ledger Accounting Group Company

Figure: Levels of Transactions in Tally. ERP 9

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UNIT-4 : Getting Started with GST (Services) 193

In all the previous explanations and executions it has been explained how GST details is defined for Alavi Traders
Pvt. Ltd. and created accounting ledgers at company level. In this section, it would be explained what will be the procedures
of taxes in Tally. ERP 9 if a company is providing or supplying more than one service.
Suppose Alavi Traders Pvt. Ltd. decided to host a celebration party for its clients and employees. The complete
party event will be controlled and managed by Apricot Events Pvt. Ltd. They will provide the services like videography
and photography services. Therefore, Alavi Traders Pvt. Ltd. is going to receive services from Apricot Events Pvt. Ltd. for
managing party event.
By considering the following example, the creation expenses group in accounting masters and other details related
to tax on services is as follows,
Example
By considering the ‘Configuration of GST at group level’ records the ‘Intra-State Inward Supply of
Services’ and analyzes the tax analysis details from the following information:
Date Particulars
20-07-2018 Purchase Voucher:
Apricot Events Pvt. Ltd. of Hyderabad, providing the following Services
to Alavi Traders Pvt. Ltd.,
(i) Videography Services: ? 50,000.
(ii) Photography Services: ? 25,000.
18% GST was charged; Reference Number: AE/236.
Solution :
In this problem, the Alavi Traders Pvt. Ltd. received ‘Videography and Photography Services’ from Apricot Events
Pvt. Ltd. Since, the transaction is within the same location or state or territory, the transaction is under ‘Intra-State Inwarc
Supply of Services’. The steps involved in ‘Intra-State Inward Supply of Services’ are as follows:
Step 1: Creation of Accounting Masters
(a) Create ‘Expenses Group’
(i) Go to “Gateway of Tally” > Accounts Info. > Groups > Create.
(ii) Enter the following details in the ‘Events Services’ Groups, ‘Tax Rate Details’ screens:
Events Services
Under the Field Activity to be Done
Name Events Services
Under Indirect Expenses
Group behaves like sub ledger No
Method to allocate when used in purchase invoice? Not Applicable
Set/Alter GST Details Yes
Tax Rate Details
(i) HSN/SAC Details
Description Event Photo & Videography Services
HSN/SAC 895623
Nature of Transaction Not Applicable
(ii) Tax Details
Taxability Taxable
(iii) Tax Type
Integrated Tax 18%
Central Tax 9% (Gets Auto-Filled)
State Tax 9
9% (Gets Auto-Filled)
Cess Leave as it is

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194 THEORY AND PRACTICE OF GST

Group Creation of “Event Services” is shown in the screen below:

Following screen shows the ‘Tax Rate Details’,

Tax Rate Details

HSN/SAC Details

Description Event Photo A Videography Services

HSN/SAC 895623
Nature of transaction J Not Applicable

Tax Details
(Ffcm 1-Apr-2Q17)
Taxability Taxable

Tax Type Rate

Integrated Tax 18 %
Central Tax 9 %
State Tax 9 %
Cess 1%

b) Create ‘Videography Services’ Ledger

(i) Go to “Gateway of Tally” > Accounts Info. > Ledgers > Create.
(ii) Enter the following details in the ‘Videography Services’ ledger,

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UNIT-4 : Getting Started with GST (Services) *195

Videography Services
Under the Field Activity to be Done
Name Videography Services
Under Event Services
Inventory values are affected No
Is GST Applicable Applicable
Set/Alter GST Details No
Type of Supply Services
The ‘Videography Services’ ledger is seen in the screen below:

Name Videography Services Total Opening Balance

(alias)

Mailing Details
Under Event Services Name Videography Services
(Indirect Expenses)
Address
Inventory values are affected ? No

Country J None

Statutory Information
Provide bank details No
Is GST Applicable ? J Applicable
Setralter GST Details ? No Tax Registration Details
Type of Supply Services
PAN/IT No ‘
Is service tax applicable ? J Undefined
Set'alter sendee tax details ? No

Accept ?

Opening Balance ( on 1-Apr-2018) : Yes or No

Create ‘Photography Services’ Ledger

(i) Go to “Gateway of Tally” > Accounts Info. > Ledgers > Create.
(ii) Enter the following details in the ‘Photography Services’ ledger,

Photography Services
Under the Field Activity to be Done
Name Photography Services
Under Event Services
Inventory values are affected No
Is GST Applicable Applicable
Set/Alter GST Details No
Type of Supply Services
Note: In the above ledgers ‘Set/Alter GST Details’ is set to No because, GST is already configured in the Group Levei
i.e., “Event Services’ Group which we have created.
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THEORY AND PRACTICE OF GSf

The ‘Photography Services’ ledger is seen in the screen below:
[ Display
Alavi Traders Pvt. Ltd.

Name Photography Services Total Opening Balance I

Mailing Details
I Under : Event Services Name
(Indirect Expenses)
Address
: Inventory values are affected ? Mo

Country
State Pincode
Statutory Inton nation
Provide bank details No
Is GST Applicable ? J Applicable
Set'alter GST Details ? Ho 1
Tax Registration Details
Type of Supply Services
PAN/TT Ho
: Is service tax applicable ? J Undefined
Set/alter service tax details ? No

v; Opening Balance ( on 1-Apr-2018} :

Create Party’s Ledger viz., ‘Apricot Events Pvt. Ltd.’

Enter the following details in the ‘Apricot Events Pvt. Ltd.’ ledger, ‘Tax Registration Details’ column, GST
OrtlMs’ screens:
Apricot Events Pvt. Ltd
Under the Field Activity to be Done
Name Apricot Events Pvt. Ltd
Under Sundry Creditors
Maintain Balances Bill-by-Bill? Yes
Default Credit Period Press ‘Enter’
Check for Credit Days during the voucher entry? No
Inventory Values are affected? No
Tax Registration Details
PAN/ITNo. KGHTM6532L
Set/Alter GST Details Yes
GST Details
Registration Type Regular
GSTIN/UIN 36AAAAA6532A1Z6
Party Type Not Applicable
Is a e-Commerce Operator No
Press ‘Enter’ to Accept.
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' * flVSA YflG's -

UNIT-4 : Getting Started with GST (Services) 197
The ‘Apricot Events Pvt. Ltd.’ ledger is seen in the screen below:

Name : Apricot Events Pvt. Ltd. Total Opening Balance

(shas)

Mailinn Details
Under Sundry Creditors Name Apricot Events Pvt. Ltd.
(Cwr&nt Liabilities} Address
Maintain balances bill-by-bill ? Yes
Default credit period
Check for credit days during voucher entry ? No
Country India
Inventory values are affected ? No
State Telangana Pincode

Provide bank details No

Tax Registration Details

PAN/rr No. KGHTM6532L
Set/alter GST details ? Yes
Set/efter service tax details ? No

Accept ?

Opening Balance ( on 1-Apr-2018| Yes or No

The ‘GST Details’ details is seen in the screen below:

GST Details

Registration type Regular

GSTIN/UIN 36AAAAA6532A1Z6
Party Type J Hot Applicable

Is a e-Commerce operator C3BK

Step 2: Transaction for Intra-State Inward Supply of Services
For ‘Intra-State Inward Supply of Services’ following steps should be carried out,
(i) Go to ‘Gateway of Tally’ > Accounting Vouchers > F9: Purchase.
(ii) Press F2 to change the date.
(iii) Enter ‘Supplier Invoice No.’: AE/236, and ‘Date’ will be auto-updated.
(iv) Enter ‘Apricot Events Pvt. Ltd.’ in ‘Party A/c Name’ field.
(v) Select ‘Photography Services’ ledger under ‘Particulars’.
(vi) Enter amount as ? 25,000.
(vii) Select ‘Videography Services’ ledger under ‘Particulars’.
(viii) Enter amount as ? 50,000.
(ix) Select ‘State Tax’ ledger, the deducted tax amount gets automatically calculated.
(x) Select ‘Central Tax’ ledger, the deducted tax amount gets automatically calculated.
(xi) Press ‘A: As Voucher’ from the right side function keys of the voucher.
(xii) Then the ‘Bill-wise Details’ screen appears > Select “New Ref.” from the list of‘Type of Ref’ > Select the Bill
No. ‘AE/236’ and press Enter.
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198 THEORY AND PRACTICE OF GST

The ‘Bill-Wise Details’ is shown in the screen below:

(xiii) Press ‘Ctrl+A’ to Save.

(xiv) Press A: Tax Analysis to view the tax calculation details.
(xv) Press F1: Detailed.
(xvi) Type Narration if required.
(xvii) Press ‘Esc’.
The ‘Purchase Invoice’ voucher is shown in the screen below:
Purchase'

Supplier invoice no AE/236 Date 1 Jul-2018 Sundayi

Party Ac name Apricot Events Pvt. Ltd.

Current Pa/ance . 88.500.00 Cr

Particulars Rate per Amount i

Videography Services 50.000.00 i

Photography Services 25.090.00
; Central Tax 6,750.00
^tatelax 6,750.00

Narration? 88,500.00

£emg Intra-State Inward Supply of Services

(xviii) Press‘Enter to Accept.

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UNIT-4 : Getting Started with GST (Services) 1^9

Therefore the above execution is a Purchase Invoice Voucher of ‘Intra-State Inward Supplyof Service/Tthe
tax implications of this transaction can be seen in ‘GSTR-2’ Report.
In order to view ‘GSTR-2’ Report,
Go to ‘Gateway of Tally’ > Display > Statutory Reports > GST > GSTR-2.
Press N: HSN/SAC Summary, which is shown in the screen below:

HSM/SAC Summary 1-Jul.2018to31-Jul.2018

Description HSN/SAC Type of Quantity UOM Taxable Integrated T ax : Central Tax State Tax Cess Total Tax
Supply Value Amount Amount Amount Amount Amount

ABOUT THE PRODUCT 54321 Services 1.50 000 00 13.500.00 13.500.00 27.000 00
Cleaning Services 998865 Services 4.00.000 00 72.000.00 72.000 00
ABOUT THE PRODUCT 54321 Services Mo 0150.000.00 013,500:00 013 500.00 (-127.000 00:

Cleaning Services 998865 Services No (-j3.00.000 00 054.000.00 054.000.00:

I
I

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zoo THEORY ARID PRACTICE OF GST

INTERNAL ASSESSMENT
Multiple Choice
1. is an act or performance offered by one party to another. [ ]

(a) Good (b) Product

(c) Service (d) Tax

2. Introduction of GST imposes tax on services in category. [ ]

(a) Central Tax (b) State Tax
•
(c) Both (a) and (b) (d) Service Tax

3. All the services mentioned under law are eligible for service taxes. [ ]

(a) GST (b) Excise Tax

(c) Income Tax (d) Service Tax

4. Which of the schedule of GST law provided explaination and determination criterias for the type of supply of
services? [ ]

(a) Schedule-I (b) Schedule-II

(c) Schedule-Ill (d) Schedule-IV

5. Renting immovable property is considered as [ ]

(a) Nature of service (b) Purchase of service

(c) Sale of service (d) Lease of service

6. Place of supply is of supplier. [ ]

j
(a) Location (b) Property

(c) State (d) Country

7. The are types of place of supply. [ ]

(a) Two (b) Three

(c) Four (d) Five

8. Cancellation of services are classified into types. [ ]

(a) Two (b) Three

(c) Four (d) Five

9. occurs when company or supplier fails to provide promised services. [ ]

(a) Acquisition of services (b) Cancellation of services

(c) Sale of services (d) Purchase of services

10. note is issued at the time of cancellation of services. [ ]

(a) Debit (b) Credit

(c) Both (a) and (b) (d) None of the above

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UNIT-4 : Getting Started with GST (Services) 201
II. Fill in the Blanks
1. Place of supply of services is the_________ of services.

2. Place and location of supply will be same in_________ .

3. Place and location of supply will be different in_________ .

4. Two separate j oumal vouchers should be recorded for the opening balance of_________ and_________ taxes

5. _________ means intra-state receipt of services.

6. _________ refers to the supply of services through sale, exchange, transfer, rental etc.
* ■
7. _________ are recorded by using purchase voucher.

8. _________ tax is applicable in interstate outward supply of services.

9. Digital or normal signature of supplier is required in case of_________ .

10. ITC stands for_________ .

I. Multiple Choice
1- (c)
2. (d)
3. (a)
4. (b)

5- (c)
6. (a)
7. (a)

8- (a)
9- (b)

10. (c)

II. Fill in the Blanks

1. Location

2. Intrastate of Supply of Services

3. Interstate of Supply of Services

4. Central and State

5. Intrastate Inward Supply of Services

6. Intrastate Outward Supply of Services

7. Inward and Outward Supply of Services

8. Integrated

9. Cancellation of Services
10. Input Tax Credit.
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201
202 THEORY KnSWaCTICE OF GST
— ———-------- - ---------- —------------------------------------------------- - ----------- - ---- —ifr'srr-------------------
III. Very Short Questions and Answers

Q1. Define Services.

Answer :

The American marketing association defines services as “services are the activities, benefits or satisfaction which
ire offered for sale and provided in connection with the sale of goods”.

Services are applicable for tax as per the Central Government of India. Service is one of the term used in the full
form of GST i.e., Goods and Service Tax. The introduction of GST imposed the taxes on services in a service tax category.
All the services mentioned under the GST law are eligible for service taxes.

02. What do you mean by Place of Supply?

Answer :

Determinating the place of supply of services is very important for the appropriate calculation of tax. As the GST
is variable and it is different for every state of India. Place of supply of services should be compulsorily identified.

Q3. What is Intra-state Supply of Services?

Answer :

Intra-State Supply of Services refers to the transactions in which the supplier of the services and the recipient of the
services belong to the same state or union territory. It means, the transaction takes place within the same state.

Example: Alavi Traders Pvt. Ltd. traded or supplied services to a trader of same state i.e., Telangana. This transaction
is referred as intra-state supply of services.

04. What is Inter-state Supply of Services?

Answer :

Inter-State Supply of Services refers to the transactions in which location of the supplier of the services is different
from the location of the recipient of the services. It means the transaction takes place between different states. Since the
transaction of services is inter-state i.e., different states as such, ‘Integrated Tax’ charges is applicable.

Example: Alavi Traders Pvt. Ltd. is a trader registered in Telangana. When it supplies services to a recipient trader
in Allahabad, then it is said to be ‘Inter-State Supply of Services’.

Q5. Write a short note on Cancellation of Services.

Answer :

Cancellation of services may occurs when a company failed to provide the promised services to other company or
client. For example, ABC company promised or contracted to provide cleaning services to XYZ company, but due to any
reason it failed to provide such services, then that situation is results in cancellation of services. At the time of cancellation
of services, debit and credit notes are issued or updated with taxable value and GST.

J.
SIA PUBLISHERS AND DISTRIBUTORS PVT. LTD. ____ ________ _______

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<—----------
UNIT RECORDING ADVANCED
ENTRIES AND MIGRATION TO
ERP SIIA GROUP

( LEARNING OBJECTIVES )

After studying this unit, one would be able to understand,

❖ Accounting of Multiple Services in a Single Supply.

❖ Recording Partial Payment to Suppliers.

❖ Recording Outward Supply with Additional Expenses.

❖ Business to Consumers (B2C).

❖ Time and Place of Supply of Services.

❖ Reverse Charge on Services and Advance Receipts from Customers under GST.

❖ Reversal of GST on Account of Cancellation of Advance Receipt.

❖ Migration and Activation of Goods and Service Tax (GST) in ERP.

❖ Creation of GST Duty Ledgers.

C INTRODUCTION

The ‘Recording of Advanced Entries’ means recording of various types of business transactions, multiple
services in single voucher, recording of additional expenses of GST, export of services, transactions of sales
services by professionals etc. It includes all those entries or transactions which were non recorded or may be
advanced in nature in Tally.ERP 9.

In the daily business activities a company deals with purchasing of goods and services from one or various
distributo' However, in some cases, the company avails various supplies from a single supplier i.e purchases
of multiple services from single supplier. During such supplies or transactions, the supplier will issue a single
invoice including taxes for the various services provided by him.

_____ .__________________ ____ — SIA PUBLISHERS AND DISTRIBUTORS PVT. LTD.

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204 THEORY AND PRACTICE OF GST

PART-A
SHORT QUESTIONS WITH SOLUTIONS
•—...........
Q1. Write about recording of advanced entries and accounting of multiple services in a single supply.
Answer : Model Paper-I, Q5

Recording of Advanced Entries

The ‘Recording of Advanced Entries’ means recording of various types of business transactions, multiple services in
single voucher, recording of additional expenses of GST, export of services, transactions of sales services by professionals
etc. It includes all those entries or transactions which were non recorded or may be advanced in nature in Tally.ERP 9.
Accounting Multiple Services in a Single Supply
In the daily business activities a company deals with purchasing of goods and services from one or various
distributors. However, in some cases, the company avails various supplies from a single supplier i.e purchases of multiple
services from single supplier. During such supplies or transactions, the supplier will issue a single invoice including taxes
for the various services provided by him.'
Q2. What is Partial Payment made to the Supplier and outward supply of services?
Answer : Model Paper-ll, Q1

Partial Payments made to the Supplier

In the day-to-day business activities a company deals with purchasing of goods and services. The payments of
purchase of services can be paid fully or partially depending upon the terms and conditions. Therefore, the partial payment
is the initial payment or half payment made by the Purchaser to the supplier.
Outward Supply of Services
Outward supply refers to the supply of goods or services through sale, exchange, transfer, rental, lease, barter and
disposal of services in a business. It takes place within the same state or in-between different states or countries. The
supplier of goods or services and the recipient would.be in the same state or different state or country.
Q3. What do you mean by supply of services and Business to Consumers supply of services?
Answer : Model Paper-I, Q6

Supply of Services
The process in which services are supplied or provided is referred as supply of services. The Schedule-II of GST
law provided the explanation and determination criterias for the type of supply of services which would be applicable for
service tax. Some of the examples of supplies which may be helpful in determining the supply of services are transfer of
goods ancf services, leasing, tenancy, licensing for occupied land, renting immovable properties etc.

Business to Consumers (B2C) Supply of Services

Business to Consumers (B2C) refers to the transactions conducted directly between a company and consumers who
are the end-users of its products or services. The B2C supply of services is different from Business-to-Business (B2B)
process, as in B2B business transactions will be in between two or more businesses. Whereas, under B2C process the
companies deal directly with consumers because of which they are called as B2C companies. While recording of B2C
transactions in Tally.ERP 9 there is no need of entering party’s registration details.
Q4. Discuss briefly the various components of time of supply.
Answer :

In order to determine appropriate time of supply based on forward charge mechanism following components will
be very helpful,
1. Date of Invoice
Usually, the supplier after supplying of services to the recipient issues a bill of invoice. The date on which the
invoice is issued is known as ‘Date of Invoice’.

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UNIT-5 : Recording Advanced Entries and Migration to ERP 205

2. Due Date to Issue Invoice

The supplier while issuing invoice bill provides the credit date, due days or last date on which the bill has to be
paid. Usually the supplier is required to issue invoice within 30 days duration from the date of supply. However, in case
of banking companies, the invoice has to be issued within 45 days from the date of supply of services.
3. Date of Receipt of Payment

Receipt of payment means the date on which the supplier receives the payment for the supplies provided by him. It
is the date on which the payment is recorded in the books of accounts. It also refers to the date on which the payments are
credited to the bank accounts.
Q5. Write about the supply of services to un-registered dealer.
Answer s ** Model Paper-Ill, Q7

In this process there will be two criterias or scenarios based on which services will be supplied to un-registerec
dealer,
(i) Scenario 1

In this scenario, the supplier will have the address related details of the unregistered dealer in the company records.
For example, when the services are provided to an unregistered dealer, his address will be available in the record books of
supplier. In this case, place of supply will be the location of recipient in supplier’s records.
(ii) Scenario 2

In this scenario, the supplier does not have the address related details of unregistered dealer in the company records.
For example, when the services are provided to an unregistered dealer, his address details is not available in the records of
supplier, then the supplier’s location will be considered as the place of supply.
Q6. Briefly describe some services which are exempted under GST.
Answer : Model Paper-ll, Q6

The GST Law exempted some services from GST rates, such services are termed as zero-rated services and they
cannot be claimed by Input Tax Credit (ITC) when they are sold. The services which are exempted from the GST are as
follows,
1. Agricultural Services
The agricultural services which are exempted from the GST includes, cultivation, harvesting, supply of farm labour,
fumigation, packaging, warehouse activities and services provided by agricultural produce marketing committee.
2. ^Transportation Services

The transportation services which are exempted from GST includes, transportation of goods by inland waterways,
transportation of passengers by air, transportation of agricultural products (Milk, Salt, Wood Grains etc.) and transportation
of goods where the gross amount charged is less than ? 1500.
3. Diplomatic Missionary Services

These services may includes, services by any foreign diplomatic mission located in India, services of Reserve Bank
of India (RBI), services of diplomats including United Nations.
4. Government Services

These services may includes, services of post office, services of airport, transportation services for goods or
passengers etc.
5. Educational Services

The educational services which are exempted from GST may includes, transportation services for students and
faculty, mid-day meal catering services and services provided by Indian Institutes of Management.

------ SIA PUBLISHERS AND DISTRIBUTORS PVT. LTD.

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206 THEORY AND PRACTICE OF GST
Q7. List out the services which are covered under reverse charge.
Answer : Model Paper-Ill, Q8

In case of supply of notified goods and services the reverse charge is applicable. Reverse charge is not only applicable
■ :r services, it is also applicable for goods as well. Addition to this, there are 12 types of services which has been notified
* • the government where reverse charge mechanism is applicable. Such services are listed below,
Import of Services.
2- Legal Services of Ad^pcates.
Services of Goods Transporting Agency.
4. Services of Arbitral Tribunal.
• »
•» Sponsorship Services.
6. Services of Government or Local Authority.
Services of Company’s Director.
8. Services of Insurance Agent to Insurance Company.
9. Services of Recovery Agent to Banking or Financing Company.
10. Services provided through transport of goods in a vessel from place outside India to custom station for clearance in
India.
11. Services provided through transfer of copyright relating to original literary, dramatic, musical or artistic works.
12. Cab services provided through E-commerce operators.

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UNIT-5 : Recording Advanced Entries and Migration to ERP 201

5.1 INTRODUCTION TO RECORDING OF ADVANCED ENTRIES

Q8. What do you mean by Recording of Advanced Entries? Explain with a relevant example.
Answer :

Recording of Advanced Entries

The ‘Recording of Advanced Entries’ means recording of various types of business transactions, multiple services i
single voucher, recording of additional expenses of GST, export of services, transactions of sales services by professional
etc. It includes all those entries or transactions which were non recorded or may be advanced in nature in Tally.ERP 9.
Example: Business Scenario of HSN Developers Pvt. Ltd.
The ‘HSN Developers Pvt. Ltd.’ of Hyderabad rendered construction services. As their business i
expanding, it has become necessary for them to maintain computerized accounting system fro«
manually recording system. For maintaining books of accounts and recording of GST taxatio
system they have installed Tally.ERP 9.
Solution :

The following are the steps involved in creation of company in Tally. ERP 9 and recording of above mentionj
company’s business transactions:
Step 1: Creation of Company

(i) Press ‘F3: Company Info’ > Create Company.

(ii) Enter the following details in the ‘Company Creation’ screen as shown below:
| Company Creation
CH** 1
Directory c:\Tally.ERP9data Books and Financial Year Details

Name : HSN Developers Pvt. Ltd. Financial year begins from 142018
Books beginning from 14-2018
Primary Mailing Details

Mailing name HSN Developers Pvt. Ltd. Security Control

Address HsKk Soaittog HPSagarftoal Hydeahal-M
TallyVault password (if any;
Repeat password
Country India Warning, ForgetMg TatyvaVt passr.'om; nV <sw you' data ■rtaccessdVe.i
State Telangana Use security control 7 No
Pincode 500008 (Erao'e secunt, to a. a-’ TSS features)

Contact Details

Phone no 040-65983274
Mobile no +91 9687543210
Fax no 096-5231
E-mail hsndeveloperspvt.ltd@hmail.coin
Website hsndeveloperspvt.ltd.co.in

Base Currency Information

Base currency symbol t Number of decimal places 2

Formal name ItIR Word representing amount after decimal
Suffix symbol to amount
Add space between amount and symbol
? No
? Yes
No of decimal places for amount in words
oi
Show amount in millions . ? No

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208 THEORY AND PRACTICE OF GST

Step 2: Enabling of GST and Tax Details
For enabling GST and tax details go to ‘Gateway of Tally’ > Press F11: Company Features >
Select ‘Statutory & Taxation’ option from the Company Features screen, then the sub-screen “Company
Operations Alteration” appears as shown in the screen below:
Company HSN Developers Pvt Ltd.

Statutory and Taxation

Enable Goods and Services Tax (GST) ? Yes Enable Tax Deducted at Source (TDS1 7 No
Set/alter GST details ? Yes Set/alter IDS details 7 No

Enable Value Added Tax fVATi ? No Enable Tax Collected at Source (TCSi ? No
Set/alter VAT details ? No Set-alter TCS details ? No

Enable excise ? No
Set/alter excise details 7 No

Enable service tax 7 Yes

Set/alter service tax details ■ CSBH
Tax Information

PAtl'Income tax no. . AKGHL6531L

Corporate Identity No (CW).

■

FT, Accounts . F2; Inventory FT Slstd’osy F6: Add-Ons

Set ‘Yes’ to ‘Enable Goods and Services Tax (GST)’ and Set ‘Yes’ to ‘Set/Alter GST Details’> then enter
die following details in the ‘GST Details’ menu,
Under the Field Activity to be Done
State Telangana
Registration Type Regular
GSTIN/UIN 36AAAAA1234A1Z6
Applicable From l-July-2017 (By Default)
Set/Alter GST Rate Details Yes
A “GST Details” Screen appears as shown below:
GST Oetaito

State Telangana
Registration type Regular
GSY-l-WI 3SAAAAA1234A1Z6
Apgfcsbte ftom 1 Apr-2018
SeValter GST rate ifetsiis * Yes
Enable GST Classifcatrons - No
Provide LUT^ond details 'E9H

While entering ‘GST Details’ Set ‘Yes’ to “Set Alter GST Rate Details’ > then a ‘Tax Rate Details’ screen
appears,
Ei^er the following details in ‘Tax Rate Details’ as shown in the screen below:
GST Details

Tax Rate Details

HSN/SAC Details

Description Construction Services

HSN/SAC 326598

Tax Details

Taxability Taxable

Tax Type Rate

Integrated Tax 18 %
Central Tax 9 %
State Tax 9 %
Cess ■%
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UNIT-5 : Recording Advanced Entries and Migration to ERP 209
Then Press ‘F12: Configure’ to set additional options of GST as shown below,

Configuration

Allow HSN/SAC details ? Yes

Enable reverse charge calculation «f ?H°
Set ineligible input credit ? No
Select valuation type ? No
Show all GST tax types ' Yes

5.2 ACCOUNTING OF MULTIPLE SERVICES IN A SINGLE SUPPLY

Q9. Explain Accounting of Multiple Services in a Single Supply with an example.

Answer : Model Paper-I, Q134a

Accounting Multiple Services in a Single Supply

In the daily business activities a company deals with purchasing of goods and services from one or vario-:
distributors. However, in some cases, the company avails various supplies from a single supplier i.e purchases of multip e
services from single supplier. During such supplies or transactions, the supplier will issue a single invoice including taxa
for the various services provided by him.

As various services are availed from single supplier it comes under Event Management. These services can he
grouped under one ledger created by using ‘Groups’ option from ledger creation screen in Tally.ERP 9. Let us understand
tax configuration details under ‘Accounting of Multiple Services in a Single Supply’ with the help of following example

Example:

Pass the transactions for ‘Multiple Services in a Single Supply with GST’ in Tally.ERP 9:

Date Particulars

01-07-2018 Purchase Voucher:

The HSN Developers Pvt. Ltd. of Hyderabad got a contract from

‘Miracle Agencies’ of Warangal to provide the following services:

(i) ‘Event Management Services’ with a budget of ? 40,000

(ii) ‘Design Services’ with ? 75,000.

18% GST was charged; Reference Number: H1.

Solution:

The following steps are to be followed for recording of multiple services in a single supply:

Step 1: Creation of Accounting Masters

(a) Create ‘Event Management Services’ Groups

(i) Go to “Gateway of Tally” > Accounts Info. > Groups > Create.

(ii) Enter the following details in the ‘Event Management Services’ Groups, ‘Tax Rate Details’ screens

............................ ................... SIA PUBLISHERS AND DISTRIBUTORS PVT. LT1

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210 THEORY AND PRACTICE OF GST

Event Management Services

Under the Field Activity to be Done
Name Event Management Services
Under Purchase Accounts
Set/Alter GST Details Yes
Tax Rate Details
(i) HSN/SAC Details
Description Event Management
HSN/SAC Details 659832
Nature of Transaction Purchase Taxable
(ii) Tax Details
Taxability Taxable
(iii) Tax Type
Integrated Tax 18%
Central Tax 9% (Gets Auto-Filled)
State Tax 9% (Gets Auto-Filled)
Cess Leave as it is

The ‘Event Management Services’ group will be created as shown in the screen below:
Group Creation

Name : Event Management Services

(afias)

Under Purchase Accounts

Group behaves like a sub-ledger ? No

Nett Debit/Credit Balances for Reporting ? No
Used for calculation (for example taxes, discounts) ? No
(for sates invoice entries)
Method to allocate when used in purchase invoice ? J Not Applicable
Set/alter GST Details ? Yes
Set/alter service tax details

SIA PUBLISHERS AND DISTRIBUTORS PVT. LTD. ________ _ _

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UNIT-5 : Recording Advanced Entries and Migration to ERP 211
The ‘Tax Rate Details’ screen is shown below,
tig

Tax Rate Details

Event Management
HSWSAC 659832
Nature of transaction Purchase Taxable

Tax Details

Taxability Taxable

Tax Type Rate •

Integrated Tax 18 %
Central Tax 9%
State Tax 9 %•
Cess BEU

Press ‘Enter’ to Accept.

(b) Create ‘Design Services’ Groups
Enter the following details in the ‘Design Services’ Groups, ‘Tax Rate Details’ screens:

Design Services
Under the Field Activity to be Done
Name Design Services
Under Purchase Accounts
Set/Alter GST Details Yes
Tax Rate Details
(i) HSN/SAC Details
Description Design Services
HSN/SAC Details 654379
Nature of Transaction Purchase Taxable
(ii) Tax Details
Taxability Taxable
(iii) Tax Type
Integrated Tax 18%
Central Tax 9% (Gets Auto-Filled)
State Tax 9% (Gets Auto-Filled)

——————_____ 5IA PUBLISHERSAND DISTRIBUTORS PVT. LTD.

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112 THEORY AND PRACTICE OF GST
The ‘Design Services’ group will be created as shown in the screen below:
Group Creation

Name : Design Services

(alias)

Under Purchase Accounts

Group behaves like a sub-ledger ? No
Nett DebitCredit Balances for Reporting ? No
Used for calculation (for example: taxes; discounts} ? No 1
(for sales invoice entries^-
Method to allocate when used in purchase invoice ? J Not Applicable
Set/alter GST Details ? Yes
Set/alter service tax details ? No

Accept ?

Yes or No

W Create ‘Miracle Agencies’ Ledger

Enter the following details in the ‘Miracle Agencies’ Ledger, ‘Tax Rate Details’ screens:

Miracle Agencies
Under the Field Activity to be Done

Name Miracle Agencies

Under Sundry Creditors

Maintain Balances Bill-by-Bil'l? Yes

Default Credit Period Press ‘Enter’

Country India

State Telangana
Tax Registration Details
PAN/IT No. AKGHP6532L

Set/Alter GST Details Yes

GST Details
Registration Type Regular

GSTIN/UIN 36AAABA1256A1Z6

Party Type Not Applicable

is a e-Commerce Operator No

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UNIT-5 : Recording Advanced Entries and Migration to ERP _____ _ 213
The Miracle Agencies’ Ledger will be created as shown in the screen below:

GST Details

Registration type Regular

GSTIN/UIN 36AAABA1256A1Z6
Party Type J Not Applicable
Is a e-Commerce operator ? No

(d) Create ‘Purchase of Event Services’ Ledger

Enter the following details in the ‘Purchase of Event Services’ Ledger,

Purchase of Event Services

Under the Field Activity to be Done
Name Purchase Event Services
Under Event Management Services
Is GST Applicable Applicable
Type of Supply Services
The ‘Purchase of Event Services’ Ledger will be created as shown in the screen below:
Name Purchase of Event Services Total Opening Balance |

Mailing Details
Under : Event Management Services
Name
(Purchase Aecevnto.l Address

Inventory valves are affected ? Yes

Statutory information Provide bank details : No j

is GST Applicable ? J Applicable

Tax Registration Details
Set/alter GST Details ? No
Type cf Supply Services PAW No
Is service tax applicable ? J Undefined
SeVafter service tax details ? No

Opening Balance { on 1-Apr-2018) :

(e) Create ‘Purchase of Design Services’ Ledger

Enter the following details in the ‘Purchase of Design Services’ Ledger,
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13 THEORY AND PRACTICE OF GST
214

Purchase of Design Services

Under the Field Activity to be Done
Name Purchase Design Services
Under Design Services
Is GST Applicable Applicable
Type of Supply Services

The ‘Purchase of Design Services’ Ledger will be created as shown in the screen below:
Total Opening Balance
blame Purchase of Design Services

Mailing Details
Under Design Services
Name
(Pwcfa&s Accounis) Address

Inventory values are affected ? Yes

Provide bank details No

<
Statutory Information

Is GST Applicable ? J Applicable

Tax Registration Details
Set/alter GST Details ? No
Type of Supply Services PANdT Ho.

Is service tax applicable ? J Undefined

SeVaher service tax details ? No

Opening Balance (on 1 Apr-2018) :

f) Create ‘State Tax’ Ledger

Enter the following details in the ‘State Tax’ Ledger,

State Tax
Under the Field Activity to be Done
Name State Tax
Under Duties & Taxes
Type of Duty/Tax GST
Tax Type State Tax

The ‘State Tax’ Ledger will be created as shown in the screen below:
Total Opening Balance
Name State Tax

Mailing Details
Under Duties & Taxes
Address

Type of duty/tax GST

Tax type State Tax
Inventory values are affected ? No
Percentage of calculation ? 0%

Rounding method : J Not Applicable

Provide bank details No
Statutory Information
Tax Registration Details
PAN.TT No.

Opening Balance on 1 -Apr-2018) :

R LTD SIA PUBLISHERSAND DISTRIBUTORS PVT. LTD------ ------- -------—-------------- ----------------------

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UNIT-5 : Recording Advanced Entries and Migration to ERP 215

(g) Create ‘Central Tax’ Ledger
Enter the following details in the ‘Central Tax’ Ledger,

Central Tax
Under the Field Activity to be Done
Name Central Tax
Under Duties & Taxes
Type of Duty/Tax GST
Tax Type Central Tax
The ‘Central Tax’ Ledger will be created as shown in the screen below:
Total Opening Balance i
Name Central Tax

' ' '

Mailing Details
Under Duties & Taxes
Nome
j'Cuneni LiaWiesJ Address

Type oftajt’Max • GST

Tax type : Central Tax
Inventory values are affected ? Ho
Percentage cf calculation ? 0%

Rounding method > J Hot Applicable

Provide bank details No

Statutory information
Tax Registration Details

PAHTTfito

Opening Balance (on 1-Apr-2018):

Step 2: Transaction of Inward Supply of Services in Masters

The following steps should be followed to record the ‘Inward Supply of Services’ transaction,
(i) Go to ‘Gateway of Tally’ > Accounting Vouchers > F9: Purchase Voucher.
(ii) Press F2 to change the date.
(iii) Enter Supplier Invoice No. as ,H1.
(iv) Press I: Accounting Invoice from right side functions keys.
(v) Make sure that the ‘Purchase Voucher’ is in ‘I: Accounting Invoice’ mode by using the right side functkJ
keys of the purchase window.
(vi£ Enter ‘Miracle Agencies’ in ‘Party A/c name’ field.
(vii) Press ‘Ctrl+A’.
(viii) Select ‘Purchase of Event Services’ under Particulars.
(ix) Enter amount as ? 40,000.
(x) Select ‘Purchase of Design Services’ under particulars.
(xi) Enter amount as ? 75,000.
(xii) Select ‘Central Tax’ ledger, the deducted tax amount gets automatically calculated.
(xiii) Select ‘State Tax’ ledger, the deducted tax amount gets automatically calculated.
(xiv) Write Narration if required.
(xv) Press Enter to Accept.
(xvi) While remaining on the same screen (F9: Purchase Voucher) Press A: Tax Analysis to view the Tax Calculates
details.
(xvii) Click F1: Detailed.

SIA PUBLISHERS AND DISTRIBUTORS PVT. L‘

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215 216 THEORY AND PRACTICE OF GST

The ‘Purchase’ Voucher transaction is shown in the screen below:
BE8S1S3HI tfc-1
Supplier invoice no. H1 Date : 1 Jul-2018 '
I 1 Jul 20181
Sunday]

Party Ac name . Miracle Agencies

Ci-ngnt saiawe 1,35,700.00 Cr

Particulars Rate per Amount]

Purchase of Event Services 40.000.801

Purchase of Design Services 75.000.00t

Central Tax 10.350.001

5tate Tax

< W, 350.00]

Narration
1,35,700.00
Being vanous Services purchased from Miracle Agencies

The ‘Tax Analysis’ Report is shown in the screen below:

Tax Analysis

Particulars Taxable Value Tax rate Duty.Tax Value

GST Details

Purchase of Event Senses 76598321 40.000.00 7.200.00

Purchase Value
Cental Tax 9% 3.600.00
Stale Tax 9% 3,600.00

Purchase cf Desgr, Services (6543791 75.000.00 13.50000

Purchase Value 75,000.05 *

C&wai Tax 9% 6,750.00

State Tax 9% 6,750.00

Total 20.700-00

Therefore the above execution is Inward Supply of Services, the tax details of this transaction can be seen in ‘GSTR-2’
Report.
In order to view ‘GSTR-2’ Report,
Go to ‘Gateway of Tally’ > Display > Statutory Reports > GST > GSTR-2. The transaction is recorded under
B2B Invoices’. The taxable value is ? 1,15,000, Central Tax value is ? 10,350, State Tax value is ? 10,350 and the Total
ction
Tax Amount’ is ? 20,700 as shown in the screen below:
GSTR-2 1-Jul-2018 to 31-Jul-2018
" -faros Summary

Included in returns 1
Not relevant for returns 0
Incornpiste/Mismatch in information (to be resolved) • 0
"able Particulars Count Taxable Value Integrated Tax Central Tax _ State Tax Amount Cess Amount Tax Amount Invoice Amount
Ho. Amount Amount

B2B Invoices 1 1,15.000 00 10.350 00 10,350 00 . : 20.700 00 1.35700 00

Import of Goods Invoices

Import of Ser-'ices Invoices

Credit/Debit Notes

Nil Rated Invoices

ISO Credit

1; TDS Credit

•2; TCS Credit.

ITC Received

ation Tax liability under Reverse Charge on Advance

: Tax Paid under Reverse Charge on Advance

ITC Reversal

Tastes <-3 s/r? are no? (tepteyed tew.

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UNIT-5 : Recording Advanced Entries and Migration to ERP 217

5.3 RECORDING PARTIAL PAYMENT TO SUPPLIERS

Q10. Write a note on transactions of recording of partial payments made to the supplier? Explain with an
example.
Answer s Model Paper-I, Q13(b)

Partial Payments made to the Supplier

In the day-to-day business activities a company deals with purchasing of goods and services. The payments of
purchase of services can be paid fully or partially depending upon the terms and conditions. Therefore, the partial payment
is the initial payment or half payment made by the Purchaser to the supplier.
The recording of partial payments made to the supplier is explained in detail by using the following example,
Example:
Pass the necessary entries for ‘Partial Payments of Purchase Services’ made to the Supplier’ in
Tally.ERP 9:

Date Particulars
01-07-2018 Purchase Voucher:
The HSN Developers Pvt. Ltd. of Hyderabad received ‘Event Management Services’ for
? 90,000 from ‘Oracle Agencies’ of Nalgonda, 18% rate of GST was charged; Reference
Number: H2.
02-07-2018 Payment Voucher:
Partial payment of ? 75,000 was made to Oracle Agencies with Bill No. H2.

Solution :

The following steps are to be followed for recording of Partial Payments of Purchase Services to the supplier:
Step 1: Creation of Accounting Masters
(a) Create ‘Kotak Mahindra Bank’ Ledger
(i) Go to “Gateway of Tally” > Accounts Info. > Ledgers > Create.
(ii) Enter the details in the ‘Kotak Mahindra Bank’ ledger as shown in the screen below:
i Name Kotak Mahindra Bank Total Opening Balance j
i fa-asi
5,00,000.00 Dr j

S
1 \ ■ Difference______ i
5,00,000.00 Dr \
Mailing Details
Under Bank Accounts Name Kotak Mahindra Bank
{Current Assets) Address

Bank Account Details

AZc holders name HSN Developers Pvt. Ltd. Country India
A<c no. State Telangana Pincode
IFS code GSTIN/UIN
Bank name J Not Applicable
Branch
BSR code Tax Registration Details
Bank Configuration
Set cheque books ? No
Set cheque printing configuration ? No Set'alter sewice tex details ? No

Accept ?

Opening Balance I on 1-Apr-201 S J 5,00,900.00 Dr Yes or No

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218 THEORY AND PRACTICE OF GST

(b) Create ‘Oracle Agencies’ Ledger
Enter the details in the ‘Oracle Agencies’ Ledger, as shown in the screen below:
; Name : Oracle Agencies Total Opening Balance i

5.00,000.00 Dr |

Terence
5.00.000.00 Dr
Mailing Details
Under Sundry Creditors
Name Oracle Agencies
(Ct/menf LtabAfies)
Address
Maintain balances bill-sy-bill ? Yes
Default credit period
Check for cred4 days during soucher entry ? No
Inventory values are affected ? No Country India
State Telangana Pincode ;

Provide bank details No

Tax Registration Details

RWITNo AKGHP5286M
Set/alter GST details ? Yes
Set/alter service tax details ? No

Accept ?

Opening Balance ( on 1 -Apr-2018) :

Yes :• No

Set/Alter ‘GST Details’ as shown in the screen below:

GST Details

Registration type Regular

GSTIN/UIN 36AAACA6521A1Z6
Party Type J Not Applicable
Is a e-Commerce operator

Note: Tax is calculated based on Central Tax and State Tax provide at the beginning of GST enabling setting. So
make sure that the GST Tax Details are appropriately defined.
Step 2: Transaction of Inward Supply of Services
The following steps should be followed to record the ‘Inward Supply of Services’ transaction,
(i) Go to ‘Gateway of Tally’ > Accounting Vouchers > F9: Purchase Voucher.
(ii) Press F2 to change the date.
(iii) Enter Supplier Invoice No. as ,H2.
(iv) press I: Accounting Invoice from right side functions keys.
(v) Make sure that the ‘Purchase Voucher’ is in ‘I: Accounting Invoice’ mode by using the right side function
keys of the purchase window.
i vi) Enter ‘Oracle Agencies’ in ‘Party A/c name’ field.
(vii) Press‘Ctrl+A’.
(viii) Select ‘Purchase of Event Services’ under Particulars.
(ix) Enter amount as ? 90,000.
i x) Select ‘Central Tax’ ledger, the deducted tax amount gets automatically calculated.
i xi) Select ‘State Tax’ ledger, the deducted tax amount gets automatically calculated.
txii) Write Narration if required.
ixiii) Press Enter to Accept.
(xiv) While remaining on the same screen (F9: Purchase Voucher) Press A: Tax Analysis to view the Tax Calculation
details.
(xv) Click F1: Detailed.

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UNIT-5 : Recording Advanced Entries and Migration to ERP 219

The ‘Purchase’ Voucher transaction is shown in the screen below:
1 Accountsig Voucher Altera toon HSN Developers Pvt. Ltd. CteiiM □
I Purchase
|No.2 | O-Jul-2018]

| Supplier invoice no H2 Dale 1Jul2018 Sunday

Party A/c name Oracle Agencies

i Ciwrf balance 11,200.00 Cr

i Particulars Rate per Amount

Purchase of Event Services 90.000.00.

Central lax 8,100.00;

State Tax 8.100.00.

Mafraticn:

The ‘Tax Analysis’ Report is shown in the screen below:

Tax Analysis

Particulars Taxable Value Tax rate Duty/Tax Value

GST Details

c-ft/fcG' Se-vces s659832> 90.000.00 IS.200.00

Purchase Value 90.000 00
Centra' Tax 9% 8,100.00
State Tax 9% 8.100.00

Total 16.200.0C-

(xvi) Press ‘Esc’.

(xvii) Press ‘F12: Configure’ and set option ‘Use Defaults for Bill Allocations’ to s shown below:

(xviii) Press ‘Ctrl+A’ to save.

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► 220 THEORY AND PRACTICE OF GST

In ‘Bill-Wise Details’ screen, select New Ref and enter bill no. as H2.as shown below:

Bill-wise Details for: Oracle Agencies

Upto T 90,000.00 Cr
Type of Ref Name D ue Date or Amount Dr/
Method of Adj. redit Days Cr
f: 1-Jul-2018)
Advance
New Ref Agst Ref 90,000.00 Cr
New Ref
On Account

90,000.00 Cr
(xix) Write‘Narration’if required.
33
io a? |xx) Press ‘Enter’ to Accept.
boo
Step 3: Transaction of Partial Payment made for Services Received
The following steps should be followed to record the ‘Partial Payment made for Services Received’ transactions,
(i) Go to ‘Gateway of Tally’ > Accounting Vouchers > F5: Payment Voucher.
ii) Press F2 to change the date.
iii) Enter ‘Kotak Mahindra Bank’ in the Account field.
iv) In Particulars field select ‘Oracle Agencies’.
■ v) Enter amount as ? 75,000.
After entering the amount the ‘Bill-Wise Details’ screen appears as shown in the screen below:

i) In the above screen select ‘Against Ref’ (Agst Ref.) from ‘Type of Ref.’ list, enter name as H2 and enter amount
as ? 75,000.
vii) Enter Narration if required.
. iii) Press ‘Enter’ to Accept.
The ‘Payment’ Voucher transaction is shown in the screen below:
| Accounting Voucher Alteration (Secondary) HSN Developers Pvt. Ltd, Ctri + M □

BBESSSHB no t .
Sunday

;?jnt Kotak Mahindra Bank

tor Sai: 4,25.000.00 Dr
Particulars Amount

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UNIT-5 : Recording Advanced Entries and Migration to ERP 221

5.4 RECORDING OUTWARD SUPPLY WITH ADDITIONAL EXPENSES

Q11. Write a note on Outward and recording of Outward Supply of Services with Additional Expenses. Give
example.
Answer :

Outward Supply of Services

Outward supply refers to the supply of goods or services through sale, exchange, transfer, rental, lease, barter and
disposal of services in a business. It takes place within the same state or in-between different states or countries. The
supplier of goods or services and the recipient would be in the same state or different state or country.
Recording of Outward Supply of Services with Additional Expenses
Outward supply of services with additional expenses andare charged in sales invoices and are taxable under GST.
The additional expenses may include freight charges, transport charges, packing charges etc. All such expenses have to be
included in the Value (as defined u/s-15 of CGST Act, 2017 and Invoice Rules) and invoice need to be issue accordingly.
As per the Provisions u/s 15 of CGST Act, 2017 defines “Value of Taxable Supply” are the value of a supply of goods
or services or both shall be the transaction value, which is the actual price paid or payable for the said supply of goods or
services or both. »
The value of supplies or the additional expenses may include the following,
1. Any taxes, duties, cess, fees and charges levied under any law other than GST Act are charged separately by the
supplier.
2. Any additional amounts incurred by the recipient of the supplies, the supplier are liable to pay that amount.
3. Any incidental expenses, commission and packaging charged by the supplier to the recipient.
4. Any amount charged at the time of delivery of goods and services.
5. Any interest or late fee or penalty as consideration being charged for any supply.
6. Any subsidies directly included in the prices of goods and services provided by the Central and State Governments

7. Shifting charges, consultation services, business information technology services etc.

Example:
Record the transactions for ‘Outward Supply of Services with Additional Expenses’ in Tally.ERP 9 with
the help of following information,

< Date Particulars

02-07-2018 Sales Voucher:
The HSN Developers Pvt. Ltd. of Hyderabad provided the following services to
‘Kanuka Enterprises’ of Mahbubnagar:
(i) ‘Construction Services’ with a budget of ? 1,40,000
(ii) ‘Shifting Charges’ of ? 10,000.
18% GST was charged; Reference Number: K1.

Solution :

The following steps are to be followed for recording of multiple services in a single supply:
Step 1: Creation of Accounting Masters
(a) Create ‘Kanuka Enterprises’ Ledger
(i) Go to “Gateway of Tally” > Accounts Info. > Ledgers > Create.
(ii) Enter the following details in ‘Kanuka Enterprises’ ledger as shown in the screen below:
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222 THEORY AND PRACTICE OF GST

i Name . Kanuka Enterprises Total Opening Balance

] iahas)
5,00,000.00 Dr
|

Difference
5.00.000. W> Dr
Mailing Details
i Under : Sundry Creditors
Name Kanuka Enterprises
(Cutrerft babies) Address
Maintain balances biil-by-bill ? Yes
Default credit period
Check for credit days during voucher entry ? No
Inventor/values are affected ? No Country India
State Telangana Pincode :

Provide bank details No

Tax Registration Details

PAWT No AKLPG1234Q
Set/alter GST details ? Yes
Set/alter service tax details ? No

; • 1 1 Accept ?

Opening Balance ( on 1-Apr-2918) :

Yes ; No

Note: Tax is calculated based on Central Tax and State Tax provided which is at the beginning of GST enabling
setting. So make sure that the GST Tax Details are appropriately defined.
Set/Alter ‘GST Details’ as shown in the screen below:

GST Details

Registration type Regular

GSTIN/UIN 36AAADA1432A1Z3 ’
Party Type J Not Applicable
Is a e-Commerce operator "IWi

(b) Create ‘Construction Services’ Ledger

Enter the following details in ‘Construction Services’ Ledger as shown in the screen below:
| Ledger Creation -------------------------------------------------- n
HSK Developers Pvt. Ltd.
Name : Construction Services Total Opening Balance |

5,00.000.00 Dr

Difference
5.00.000.00 Dr)

Mailing Details
Under Sales Accounts
Name
Address
Inventory values ate affected ? Yes

Statutory Information
Provide bank details No
Is GST Applicable ? J Applicable
Set/alter GST Details ? Yes
Type of Supply . Services Tax Registration Details I

Is service tax applicable ? J Undefined PAN/ITNo.

Set/alter service tax details ? No

Accept ?

Opening Balance ( on 1Apr-2018) :

Yes No

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UNIT-5 : Recording Advanced Entries and Migration to ERP 223

Set/Alter ‘Tax Rate Details’ as shown in the screen below:

Tax Rate Details

HSN/SAC Details

Description Construction Services

HSN/SAC 996257

Nature of transaction J Not Applicable

Tax Details

Taxability Taxable

Tax Type Rate

Integrated Tax 18 %

Central Tax 9 %

State Tax 9 %

Cess

(c) Create ‘Shifting Charges’ Ledger

Enter the following details in the ‘Shifting Charges’ Ledger as shown in the screen below:
Total Opening Balance i
Name Shifting Charges

jo>aS;!
a 5.00.000.80 Dr
-•

Diife-ence

Mailing Details
Under : Indirect Expenses
Name
Address
•
Inventory values are affected ? No 1
Country

Statutory Information
Provide tank details No

Is GST Appticable ? J Hot Applicable

Set alter GST Details ? Mo

Tax Registration Details

PAMT No
is service tax applicable 7 J Undefined
Set/alter sendee tax details ? No

i Include in assessable value calculation for: GST .

Appropriate to Services
Method of Calculation Based on Value

Accept ?

Opening Balance on 1-Apr-2818}: Yes si No

Step 2: Transaction of Outward Supply of Services in Masters

The following steps should be followed to record the ‘Outward Supply of Services’ transaction,
(i) Go to ‘Gateway of Tally’ > Accounting Vouchers > F8: Sales Voucher.
(ii) Press F2 to change the date.
(iii) Enter Reference No. as .K1.
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224 THEORY AND PRACTICE OF GST

> iv) Press I: Accounting Invoice from right side functions keys.
(v) Enter ‘Kanuka Enterprises’ in ‘Party A/c name’ field.
(vi) Press ‘Ctrl+A’ to save.
(vii) Select ‘Construction Services’ under particulars.
iviii) Enter amount as ? 1,40,000.
(ix) Select ‘Shifting Charges’ under particulars.
I x) Enter amount as ? 10,000.
(xi) Select ‘Central Tax’ ledger (CGST), the deducted tax amount gets automatically calculated.
(xii) Select ‘State Tax’ ledger (SGST), the deducted tax amount gets automatically calculated.
i xiii) While remaining on the same screen (F8: Sales Voucher) Press A: Tax Analysis to view the Tax Calculation
details.
(xiv) Click F1: Detailed.
(xv) Press Esc.
(xvi) In ‘Bill-Wise Details’ screen, select New Ref as Type of Ref. and enter name as K1.
(xvii) Write ‘Narration’ if required.
i xviii) Press ‘Enter’ to Accept.
The ‘Sales’ Voucher transaction is shown in the screen below:

The ‘Tax Analysis’ Report is shown in the screen below:

Tax Analysis

Particulars Taxable Value Tax rate Duty/Tax Value

GST Details

1,58,090.00

Ctosfaefen Swces IS8S57J T50.OM.W 27.000.00:

Sales v'aie 1.40.000.00
SM&tg Charges (10.000:00/1,40,000.00 ‘ 1.40,000.00) 10,000.00
Centra! Tax 9% 13.500.00 '•
Stale Tax n *3,500.$?:

Total 27,000.00

Therefore the above execution is Outward Supply of Services with additional expenses, the tax details of this
transaction can be seen in ‘GSTR-1 ’ Report.

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UNIT-5 : Recording Advanced Entries and Migration to ERP 225

In order to view ‘GSTR-1’ Report,
Go to ‘Gateway of Tally’ > Display > Statutory Reports > GST > GSTR-1. The transaction is recorded under
‘B2B Invoices’. The taxable value is ? 1,50,000, Central Tax value is ? 13,500, State Tax value isT 13,500 and the Total
‘Tax Amount’ is ?27,000 as shown in the screen below:
GSTR-1 1 Jul-2018 to 31 Jul-2018

Returns Summary

included in returns 1
Not relevant for returns 3
Inccmplete/Mismatch in information (to be resolved) 0

Table Particulars Count Taxable Value integrated Tax Central Tax State Tax Amount Cess Amount Tax Amount Invoice Amount
Ito. Amount Amount

5 828 Invoices 1 1 50 000 00 13.500.00 13,500.00 27,000 00 1.77 000 00

6 B2C-;Large) Invoices

7 B2C; Small) Invoices

8 C rediV De bit Notes

$ Nil Rated Invoices

10 Exports Invoices •

11 Tax Liability on Advances

12 Setoff ofTax Paid against Advances

Afefe. Ta&es capture q&i&iG steaa? avsj-sbfe on the ctyfa?. end are no< delayed iw.

5.4.1 Supply of Services - Business To Consumers ________________

Q12. What do you mean by Supply of Services and Business to Consumers (B2C) Supply of Services?
Provide with an illustration problem in Tally. ERP 9.
Answer :
Supply of Services
The process in which services are supplied or provided is referred as supply of services. The Schedule-II of GST
law provided the explanation and determination criterias for the type of supply of services which would be applicable for
service tax. Some of the examples of supplies which may be helpful in determining the supply of services are transfer of
goods and sendees, leasing, tenancy, licensing for occupied land, renting immovable properties etc.
Business to Consumers (B2C) Supply of Services
Business to Consumers (B2C) refers to the transactions conducted directly between a company and consumers who
are the end-users of its products or services. The B2C supply of services is different from Business-to-Business (B2B)
process, as in B2B business transactions will be in between two or more businesses. Whereas, under B2C process the
companies deal directly with consumers because of which they are called as B2C companies. While recording of B2C
transactions in Tally.ERP 9 there is no need of entering party’s registration details.
Illustration:
fey using the following data, record the ‘B2C Supply of Services’ entries in Tally.ERP 9.

Date Particulars
02-07-2018 Sales Voucher:
The HSN Developers Pvt. Ltd. of Hyderabad supplied the following services to ‘Libra
Associates’ of Vikarabad:
(i) ‘Construction Services’ with a budget of ? 90,000.

(ii) 18% GST was charged on construction services; Reference Number: H-3.
Solution :
The following steps are to be followed for recording of B2C Supply of Services:
Step 1: Creation of Accounting Masters
Create ‘Libra Associates’ Ledger
(i) Go to “Gateway of Tally” > Accounts Info. > Ledgers > Create.
(ii) Enter the following details in ‘Libra Associates’ ledger as shown in the screen below:
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226 THEORY AND PRACTICE OF GST

Set/Alter ‘GST Details’ as shown in the screen below:

GST Details

Registration type Consumer

GSTIN/UIN
Party Type
Is a e-Commerce operator

Note: In GST Details screen, Set ‘Registration Type’ as ‘Consumer’. After selecting ’Consumer’, the fields
'Registration Type’ and GSTIN/UIN will be bounced automatically.
Step 2: Transaction of B2C Supply of Services
The following steps should be followed to record the ‘B2C Supply of Services’ transaction,
(i) Go to ‘Gateway of Tally’ > Accounting Vouchers > F8: Sales Voucher.
(ii) Press F2 to change the date.
(iii) Enter Reference No. as .H3.
liv) Press I: Accounting Invoice from right side functions keys.
w) Enter ‘Libra Associates’ in ‘Party A/c name’ field.
(vi) Press‘Ctrl+A’to save.

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UNIT-5 : Recording Advanced Entries and Migration to ERP _ 227

(vii) Select ‘Construction Services’ under Particulars.
(viii) Enter amount as ? 90,000.
(ix) Select ‘Central Tax’ ledger (CGST), the deducted tax amount gets automatically calculated.
(x) Select ‘State Tax’ ledger (SGST), the deducted tax amount gets automatically calculated.
(xi) While remaining on the same screen (F8: Sales Voucher) Press A: Tax Analysis to view the Tax Calculation
details.
(xii) Click F1: Detailed.
(xiii) Press Esc.
(xiv) Write ‘Narration’ if required.
(xv) Press ‘Enter’ to Accept.
The ‘Sales’ Voucher transaction is shown in the screen below:
Accounting Voucher Alteration HSM Developers Pvt. Ltd. Ctri + M Cj

Sales ESSEiZD
Reference no H3 Monday

Party A;c name Libra Associates

Coffin* balance 1,06,200.00 Dr
Particulars Rate pef Amount

Construction Services 90.000.00

Central Tax 8.100.00
State Tax 8.100.00

narration 1,06,200.00

In ‘Bill-Wise Details’ screen, select New Ref and enter bill no. as H3 as shown below:

Bill-wise Details for: Libra Associates

Upto ? 90,000.00 Dr
Type of Ref Name Due Date or Amount Dr/
Credit Days Cr
(wef. 2-Jul-2018)

New Ref H3 90.000.00 CT

New Ref 2
New Ref 2
90,000.00 Dr
Therefore, the above execution is B2C Supply of Services. The tax details of this transaction can be seen io
‘GSTR-1’ Report.
In order to view ‘GSTR-1 ’ Report,
Go to ‘Gateway of Tally’ > Display > Statutory Reports > GST > GSTR-1. The transaction is recorded unde'
‘B2C (Small) Invoices’. The Small Invoices means the value of supply of services is less than 2.5 lakhs. The taxable?
value is ? 90,000, Central Tax value is ? 8,100, State Tax value is ? 8,100 and the Total ‘Tax Amount’ is ? 16,200 as shown
in the screen below:
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228 THEORY AND PRACTICE OF GST

GSTR-1 1 Jul-2018 to 31 -Jul-2018

Returns Summary

Total number of vouchers for the period 5

Included in returns 2
Hot relevant for returns 3
Incomplete/Mismatch in information (to be resolved) 0

Table Particulars Count Taxable Value Integrated Tax CenttalTax State Tax Amount Cess Amount Tax Amount Invoice Amount
No. Amount Amount

: B2B invoices 1 1,50,DOT 00 13,500.00 13.500 00 27 000 00 1.77000 00

; B2C(Largei invokes

8 Credit/Debit Notes

9 Nil Rated Invoices

10 Exports invoices

11 Tax Liability on Advances

12 Setoff of Tax Paid against Advances

' '::i. "ab'es 1-4 cscic?c cccccr b!:~ 4e>-%

5.5 TIME OF SUPPLY OF SERVICES .

Q13. What do you mean by Time of Supply of Services? What are its Components? Explain with an illustration.

Answer: Model Paper-ll, Q13(a)

Time of Supply of Services

Time of supply refers to the time at which the tax has to be paid. It is an effective mechanism and technique which
helps in determining the point of time at which the tax liability will arise.

Based on forward charge mechanism, supplier follows this strategy for tax assessment and makes tax payments
accordingly to the credit of CGST and SGST.

Components of Time of Supply

hriorder to determine appropriate time of supply based on forward charge mechanism following components will
be very helpful,

1. Date of Invoice

Usually, the supplier after supplying of services to the recipient issues a bill of invoice. The date on which the
invoice is issued is known as ‘Date of Invoice’.
2. Due Date to Issue Invoice

The supplier while issuing invoice bill provides the credit date, due days or last date on which the bill has to be
paid. Usually the supplier is required to issue invoice within 30 days duration from the date of supply. However, in case
of banking companies, the invoice has to be issued within 45 days from the date of supply of services.
3. Date of Receipt of Payment

Receipt of payment means the date on which the supplier receives the payment for the supplies provided by him. It
is the date on which the payment is recorded in the books of accounts. It also refers to the date on which the payments are
credited to the bank accounts.
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UNIT-5 : Recording Advanced Entries and Migration to ERP 229

The following table shows all the components of time of supply,

Date of
Date of Time of
Receipt of Interpretation
Invoice Supply
Payment
The date of invoice is earlier compared to date of receipt of
18th July, 2018 8th August, 2018 18th July, 2018
payment. So, the time of supply will, be 18th July, 2018.
The date of receipt of payment is earlier compared to date of
8th August, 2018 22nd July, 2018 22nd July, 2018 invoice which means the payment is made in advance. So, the
time of supply will be 18th July, 2018.
Note: According to forward charge mechanism. The liability to pay taxes will be the earliest of the above dates.
Illustration:
By using the following data record the ‘Time of Supply of Services’ entries in Tally.ERP 9:

Date Particulars
01-07-2018 Sales Voucher:
The HSN Developers Pvt. Ltd. of Hyderabad supplied the following services to ‘Capricorn
Enterprises’ of Siddipet:
(i) ‘Construction Services’ with a budget of ? 1,40,000, with a credit period of 30 days.

(ii) 18% GST was charged on construction services; Reference Number: H4.
02-08-2018 Receipt Voucher:
Received full payment for the Bill Reference No. H4 through Kotak Mahindra Bank from
Capricorn Enterprises.
Solution :
The following steps are to be followed for recording ‘Time of Supply of Services’ transactions:
Step 1: Creation of Accounting Masters
Create ‘Capricorn Enterprises’ Ledger
(i) Go to “Gateway of Tally” > Accounts Info. > Ledgers > Create.
(ii) Enter the following details in ‘Capricorn Enterprises’ ledger as shown in the screen below:

5IIA PUBLISHERS AND DISTRIBUTORS PVT. LTD.

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230 THEORY AND PRACTICE OF GST

Set/Alter ‘GST Details’ as shown in the screen below:

GST Details
J Unknown
Registration type Consumer Composition
Consumer
i GSJ1N.UIN
Regular
Party Type Unregistered
Is a e-Commerce operator

Step 2: Transaction of Time of Supply of Services

The following steps should be followed to record the ‘Time of Supply of Services’ transactions,
(i) Go to ‘Gateway of Tally’ > Accounting Vouchers > F8: Sales Voucher.
(ii) Press F2 to change the date.
(iii) Enter Reference No. as ,H4.
(iv) Press I: Item Invoice from right side functions keys.
(v) Enter ‘Capricorn Enterprises’ in ‘Party A/c name’ field.
(vi) Press ‘Ctrl+A’ to save.
(vii) Select ‘Construction Services’ under Particulars.
(viii) Enter amount as ? 1,40,000.
fix) In ‘Bill-Wise Details’ screen, select New Ref in Type of Ref., name as H4 and ‘Due Date or Credit Days’
as 30 Days as shown in the below screen:
Bill-wise Details for Capricorn Enterprises
Upto ? 1.40,000.00 Dr

Type of Ref Name Due Date or Amount Dr/

Credit Days Cr
jwef. 2-Jul-2018 j -

New Ref H4 30 Days 1,40,000.00 IdB

(IAug-2018)
New Ref 3

1,40,000.00 Dr

(x) Press ‘Enter’ to Accept.

(xi) Select ‘Central Tax’ ledger (CGST), the deducted tax amount gets automatically calculated.
(xii) Select ‘State Tax’ ledger (SGST), the deducted tax amount gets automatically calculated.
(xiii) While remaining on the same screen (F8: Sales Voucher) Press A: Tax Analysis to view the Tax Calculation
details.
(xiv) Click F1: Detailed.
(xv) Press Esc.
(xvi) Write ‘Narration’ if required.
(xvii) Press ‘Enter’ to Accept.
The ‘Sales’ Voucher transaction is shown in the screen below:

Monday

Particulars Debit Credit

Bv Capricorn Enterprises 1,65,200.00

Cur Ba;. !,65.200.00 Dr
New Ref H4 30 Days 1.65,200.00 Dr
(T-Aug-2018)
To Construction Services * 1,40,000.00
Cur Bai. 3,70.000.00 Cr
To Central Tax 12,600.00
Cvrfia 15.750.00 Cr
To State Tax 12,600.00
CwBai. 15.750.00 Cr

Narration 1,65,200.00 1,65,200.00

SIA PUBLISHERS AND DISTRIBUTORS PVT. LTD.

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UNIT-5 : Recording Advanced Entries and Migration to ERP 231

Therefore, the above execution is for the Time of Supply of Services. The tax details of this transaction can be
seen in ‘GSTR-1’ Report.
In order to view ‘GSTR-1 ’ Report,
Go to ‘Gateway of Tally’ > Display > Statutory Reports > GST > GSTR-1. The transaction is recorded under
‘B2C (Small) Invoices’. The taxable value is ? 1,40,000, Central Tax value is ? 12»600, State Tax value is ? 12,600 and
the Total ‘Tax Amount’ is ? 25,200 as shown in the screen below:

Step 3: Transactions of ‘Received Full Payment’ Amount for the Services Provided
The following steps should be followed to record the ‘Received Full Payment’ amount transactions,
(i) Go to ‘Gateway of Tally’ > Accounting Vouchers > F6: Receipt Voucher.
(ii) Press F2 to change the date to 02-08-2018.
(iii) Click F12: Configure to access ‘Receipt Voucher Configuration’ and set ‘Use Single Entry Mode for
Payment/Receipt/Contra Vouchers’ to “Yes” as shown below:

Receipt Configuration

Skip Date field during creation for faster entry ? Yes

Use single entry mode for payment/receipt/contra vouchers? EJ
' Show Bank Allocation details ? No
Use receipt as contra ? No
Use Cr/Dr instead of To/By during entry 1 No
Warn on negative cash balance ? Yes

Preallocate bills for payment/receipt/joumal voucher

Show inventory details
Show table of bills for selection
Show final balances of bill 9

Show bill-wise details

Expand into multiple lines
Show current balances of ledgers
Show balances as on voucher date
Show Ledger Final balances

Statutory Options

Use additional Descriptionis) for service ledgers ? No

Show Party Details for GST ? Yes
Allow modification of tax details for GST ? No
Allow modification of tax details for service tax ? No

Bank Allocations Configuration

Use default values for bank details ? No

SIA PUBLISHERS AND DISTRIBUTORS PVT. LTD.

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232 THEORY AND PRACTICE OF GST
(iv) Press ‘Enter’ to Save.
(v) Back in ‘Receipts’ Voucher Enter ‘Capricorn Enterprises’ in ‘To Particulars’ field.
(vi) Enter amount as ? 1,40,000.
(vii) After entering the amount ‘Bill-Wise Details’ screen appears.
(viii) In ‘Bill-Wise Details’ ‘Set ‘Against Ref.’ in ‘Type of Ref.’ field, name as Reference No. H4, Due Date or
Credit Days as 30 Days and enter amount as ? 1,40,000 as shown in the screen below:

(ix) Press ‘Enter’ to Accept.

(x) Then the screen returns back to ‘Receipt’ Voucher.
(xi) In ‘By Particulars’ field select ‘Kotak Mahindra Bank’.
(xii) Enter amount as ? 1,40,000.
(xiii) Enter ‘Narration’ if required.
(xiv) Press‘Enter’to Accept.
The ‘Receipt’ Voucher transaction is shown in the screen below:

■ESSKRho 1
Thursday

Particulars ' Debit Credit

To Capricorn Enterprises 1,40,000.00 i

Cur Ba- 25,200.00 Dr
Agst Ref H4 30 Days 1.40.000.00 Cr
(TAuj^OU)
By Kotak Mahindra Bank 1,40.000.00
Cur Ba ' 5.65,0WM Dr

' - ' /

. Narration 1,40,000.00 1,40.000.00:

5.6 PLACE OF SUPPLY OF SERVICES - DETERMINING PLACE OF SUPPLY OF SERVICES

Q14. Explain the concept of supply of services with reference to place, registration and non-registration.
Answer :

The concept of supply of services can be explained with the help of following factors, •

SIA PUBLISHERSAND DISTRIBUTORS PVT. LTD. ------ ------ ---- ________

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UNIT-5 : Recording Advanced Entries and Migration to ERP 233
1. Place of Supply of Services
The location where the services are supplied is termed as the place of supply. The place of supply of services plays
an important role in determination of taxes to be applied on supply of services. This concept is based on the GST because
in GST tax is applicable depending upon destination i.e ‘destination based consumption tax’. The tax will be accumulated
to the state where the supply is consumed.
2. Determining Place of Supply of Services
Determinating the place of supply of services is very important for the appropriate calculation of tax. As the GST is
variable and it is different for every state of India. Place of supply of services should be compulsorily identified. Because
services will be eligible for GST rates based on the area or state in which it is supplied or consumed. Thus, the place of
supply of services is the location of the supplier or the location where the services has been delivered, installed or assembled.
The place of supply of services can be identified or determined based on two different types, they are,
(i) Intra-State Supply of Services
In intra-state supply of services, the place of supply of services and the location of the supply will be same. For
example, ABC company of Telangana supplied services to XYZ company of Telangana.
(ii) Inter-State Supply of Services
In inter-state supply of services, the place of supply of services and the location of the supply will be different. For
example, ABC company of Telangana supplied services to XYZ company of Delhi.
3. Supply of Services to a Registered Person
In the process of providing services to a registered person, the location of the supply must be determined first for
applying GST type settings. In the process of supply of taxable services to a registered person, the registered location of
recipient will be the place of supply.
4. Supply of Services to an Un-Registered Dealer
In this process there will be two criterias or scenarios based on which services will be supplied to un-registered
dealer,
(i) Scenario 1
In this scenario, the supplier will have the address related details of the unregistered dealer in the company records.
For example, when the services are provided to an unregistered dealer, his address will be available in the record books of
supplier. In this case, place'of supply will be the location of recipient in supplier’s records.
(ii) Scenario 2
In this scenario, the supplier does not have the address related details of unregistered dealer in the company records.
For example, when the services are provided to an unregistered dealer, his address details is not available in the records of
supplier, then the supplier’s location will be considered as the place of supply.
Addition to this, Supply of Services to an un-registered dealer is further classified into two types. They are as follows.
(a) Within the Same State
v6ien the supply of services provided to an unregistered dealer whose location is within the same state the comes
under ‘Unregistered Dealer within Same State’ process. The taxes applicable in this type will be CGST and SGST.
(b) To a Different State
When the supply of services provided to an unregistered dealer whose location is in different states then it comes
under ‘Unregistered Dealer to a Different States’ process. The tax applicable in this type will be IGST.
Q15. Record Outward Supply of Services in the Books of Accounts of HSN Developers Pvt. Ltd. by
using ‘Supply of Services to an Unregistered Dealer’ process (Address is Unavailable) in Tally.
ERP 9 from the following details:

Date Particulars
02-07-2018 Sales Voucher:
The HSN Developers Pvt. Ltd. of Hyderabad provided the Training on Technology for
Construction Services for ? 40,000 to ‘MGB Agencies’ of Ranga Reddy, Telangana, who
is an ‘Unregistered Dealer’.
18% GST was charged for construction services; Reference Number: H5.

———— SIIA PUBLISHERS AND DISTRIBUTORS PVT. LTD.

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234 THEORY AND PRACTICE OF GST

Solution :
The following steps are to be followed for recording ‘Outward Supply of Services’ transactions:
Step 1: Creation of Accounting Masters
(a) Create ‘MGB Agencies’ Ledger
(i) Go to “Gateway of Tally” > Accounts Info. > Ledgers > Create.
(ii) Enter the following details in ‘MGB Agencies’ ledger as shown in the screen below:
Total Opening Balance I
Name MGB Agencies
(alias'- . I
5.00.0&0.00 Dr I

Difference
5,OQOOQ.OQDr |
________________________
Mailing Details
Under Sundry Debtors Name MGB Agencies
fGurren? Assets! Address Ratiga Reddy District

Maintain balances bill-by-bill ? Yes

Default credit period
Check for credi days during voucher entry ? No
Country India
Inventory values are affected ? No
State Telangana Pincode

Provide bank details No

Tax Registration Details *

PAN/1T No AKLPA1256P
Set/alter GST details ? Yes
SeVriter service tax details ? No

Accept ?

Opening Balance ( on T-Apr-2018) : Yog nr Ns

Set/Alter ‘GST Details’ as shown in the screen below:

Registration Types
GST Details
J Unknown
Registration type
Composition
Consumer
GSTIN/UIN Regular
Party Type J Not Applicable mil &jyj-j d <J-J« lllll
Is a e-Commerce operator ? No ----- —————-————
. . I
(b) Create ‘Training on IT Construction Services’ Ledger
Enter the following details in ‘Training on IT Construction Services’ ledger as shown in the screen below:

SIA PUBLISHERSAND DISTRIBUTORS PVT. LTD. ...... — — ......................

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UNIT-5 : Recording Advanced Entries and Migration to ERP 235

Set/Alter ‘GST Tax Rate Details’ as shown below:
1 GST D eta Us

Tax Rate Details

HSN/SAC Details

Description : Traininjai TedhidogyforCoaSriilioflSeririces

HSN/SAC : 698532
Nature of transaction : J Not Applicable

Tax Details

Taxability Taxable

Tax Type Rate

Integrated Tax 18 %
Central Tax 9 %
State Tax 9 %
Cess ■%
Step 2: Transaction of Outward Supply of Services
The following steps should be followed to record the ‘Outward Supply of Services’ of an Unregistered Dealer,
(i) Go to ‘Gateway of Tally’ > Accounting Vouchers > F8: Sales Voucher.
(ii) Press F2 to change the date.
(iii) Enter Reference No. as .H5.
(iv) Press I: Item Invoice from right side functions keys.
(v) Enter ‘MGB Agencies’ in ‘Party’s A/c Name’ field.
(vi) Enter amount as T 40,000.
(vii) After entering the amount ‘Bill-Wise Details’ screen appears.
(viii) In ‘Bill-Wise Details’ screen, select New Ref in Type of Ref., name as H5 and enter amount ? 40,000 as
£ shown in the below screen:

(ix) Press Enter to Accept.

(x) Select ‘Training on IT Construction Services’ under ‘Particulars’ field.
(xi) Enter amount as ? 40,000.
(xii) Select ‘Central Tax’ ledger (CGST), the deducted tax amount gets automatically calculated.

- -------------- . . SIA PUBLISHERS AND DISTRIBUTORS PVT. LTD.

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235 236 THEORY AND PRACTICE OF GST
< xiii) Select ‘State Tax’ ledger (SGST), the deducted tax amount gets automatically calculated.
i xiv) While remaining on the same screen (F8: Sales Voucher) Press A: Tax Analysis to view the Tax Calculation
details.
(xv) Click F1: Detailed.
(xvi) Press ‘Esc’.
ixvii) Write ‘Narration’ if required.
(xviii) Press ‘Enter’to Accept.
The ‘Sales’ Voucher transaction is shown in the screen below:

Training on IT Construction Services

Central Tax 3,600.00

State Tax 3,600.00

Narration:

The ‘Tax Analysis’ Report is shown in the screen below:

itered Dealei

? 40,000 a

Therefore, the above execution is for Outward Supply of Services. Here the tax details of this transaction can be
seen in ‘GSTR-1’ Report.
In order to view ‘GSTR-1 ’ Report,
Go to ‘Gateway of Tally’ > Display > Statutory Reports > GST > GSTR-1. The transaction is recorded under
B2C (Small) Invoices’. The taxable value is ? 40,000, Central Tax value is ? 3,600, State Tax value is ? 3,600 and the
Total ‘Tax Amount’ is ? 7,200 as shown in the screen below:

5 PVT. LTC SIA PUBLISHERS AND DISTRIBUTORS PVT. LTD.

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UNIT-5 : Recording Advanced Entries and Migration to ERP 237
Q16. Record the Outward Supply of Services to ‘Unregistered Person’ (Address is Unavailable) in Tally.ERP 9
from the following details:

Date Particulars
02-07-2018 Sales Voucher:
The HSN Developers Pvt. Ltd. of Hyderabad provided the Training on Technology for
Construction Services for ? 5,000 to an ‘Unregistered Dealer’ paid through cash and 18%
GST was charged for construction services with Reference Number: H6.
Solution :

The following steps are to be followed for recording ‘Outward Supply of Services’ transactions:
Step 1: Recording of Outward Supply of Services to an Unregistered Dealer
The following steps should be followed to record the ‘Outward Supply of Services to an Unregistered
Dealer’,
(i) Go to ‘Gateway of Tally’ > Accounting Vouchers > F8: Sales Voucher.
(ii) Press F2 to change the date.
(iii) Enter Reference No. as .H6.
(iv) Press I: Item Invoice from right side functions keys.
(v) Enter ‘Cash’ in ‘Party’s A/c Name’ field.
(vi) After selecting the ‘Party’s A/c Name’ as Cash the ‘Party Details’ screen appears.
(vii) In ‘Party Details’ screen, select State as Telangana, GST Registration Type as Unregistered as shown in the
below screen:
Despatch Details
Delivery Note Hots) Despatch Doc.
Despatched through
Destination

Order Details
Order Hois) Mode.Terms of Payment.
Other Reference^)
Terms of Delivery

Buyer's Details
Bayers Cash
Address

State Telangana
GST Registration Type Unregistered
GSTIf'WIH

(viii) Press Enter to Accept.

(ix) Select ‘Training on IT Construction Services’ under ‘Particulars’ field.
(x) Enter amount as ? 5,000.
(xi) Select ‘Central Tax’ ledger (CGST), the deducted tax amount gets automatically calculated.
(xii) Select ‘State Tax’ ledger (SGST), the deducted tax amount gets automatically calculated.
(xiii) While remaining on the same screen (F8: Sales Voucher) Press A: Tax Analysis to view the Tax Calculation
details.
(xiv) Click F1: Detailed.

...... -................... ................... ............... - SIA PUBLISHERSAND DISTRIBUTORS PVT. LTD.

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237 238 THEORY AND PRACTICE OF GST
9 (xv) Press ‘Esc’.
(xvi) Write ‘Narration’ if required.
(xvii) Press ‘Enter’ to Accept.
The ‘Sales’ Voucher transaction is shown in the screen below:
for
18%
Reference no. H6 • T ■ ; ; Mc-day

Party A/c name Cash

CVnsn: oafoice 5.900.00 Dr

Particulars Rate per Amount

Training on IT Construction Services 5.0.00

Central Tax 450.00

itered State Tax 450.00

-n in the
Narration

The ‘Tax Analysis’ Report is shown in the screen below:

Tax Analysis

Particulars Taxable Value Tax rate Duty/Tax Value

GST Details

on IT Sen-ces ($38532) 5.000.00 mot?

Sa’es Vs&re 5,000.00
C&nifa' Tax ' 250,00
Stare Tax 9% ^50.00

Total 900.00

Therefore, the above execution is for Outward Supply of Services to an Unregistered Dealer. Addition to
this, the tax details of this transaction can be seen in ‘GSTR-1 ’ Report.
In order to view ‘GSTR-1 ’ Report,
Go to ‘Gateway of Tally’ > Display > Statutory Reports > GST > GSTR-1. The transaction is recorded under
B2C (Small) Invoices’. The taxable value is ? 5,000, Central Tax value is 7 450, State Tax value is ? 450 and the Total
‘Tax Amount’ is ? 900 as shown in the screen below:

Vouchers of B2C(Small) Invoices 1 Jul-2018 to 31-Aug-2018 ;

For State Telangana
Date Particulars GSTIN/UIN Veh Type Veh Mo. Taxable integrated Tax Central Tax State Tax Cess Total Tax Invoice ;
Value Amount Amount Amount Amount Amount Amount!
j
2-7-2018 Lt bra As sc elate s Sales 2 90. 000.00 8.100.00 8.100.00 16.200.00 1 05 280 001
2-7-2018 Capricorn Enterprises Sales 1,40 000 00 12.600.00 12 000.80 25,200 00 1.65.200.001
Calculation 2-7-2018 MGS Agencies Sales 4 40 000 00 3,600.00 .... 3600 00 7:200 00 4T2QOQ0j

'• ' ■ ■ ■ - ' ■■ • ■ : ' ' ' ' ' • • • ■ • ■ • • '■ ' ' ’ ’ ' • • ■ ■ ■ • ■ |
.... .. .. ■ ...... ........... -J-.... ' ' .'k.. ..... 1 ' . . ■ '.......... .. ,k.l
Grand Total 2,75,000.00 24,750.00 24,750.00 49,500.00 3,24,500.00

’VT. LTD. SIA PUBLISHERSAND DISTRIBUTORS PVT. LTD. . X/------------------------------- --------

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UNIT-5 : Recording Advanced Entries and Migration to ERP 239

5.7 EXEMPT SUPPLY OF SERVICES UNDER GST

Q17. Write a note on Exempt Supply of Services under GST. Explain with an example.
Answer : Model Paper-ll, Q13(b)

Exempt Supply of Services under GST

The GST Law exempted some services from GST rates, such services are termed as zero-rated services and they
cannot be claimed by Input Tax Credit (ITC) when they are sold. The services which are exempted from the GST are as
follows,

1. Agricultural Services
The agricultural services which are exempted from the GST includes, cultivation, harvesting, supply of farm labour,
fumigation, packaging, warehouse activities and services provided by agricultural produce marketing committee.

2. Transportation Services

The transportation services which are exempted from GST includes, transportation of goods by inland waterways,
transportation of passengers by air, transportation of agricultural products (Milk, Salt, Wood Grains etc.) and transportation
of goods where the gross amount charged is less than ? 1500.

3. Diplomatic Missionary Services

These services may includes, services by any foreign diplomatic mission located in India, services of Reserve Bank
of India (RBI), services of diplomats including United Nations.

4. Government Services

These services may includes, services of post office, services of airport, transportation services for goods or
passengers etc.

5. Educational Services

The educational services which are exempted from GST may includes, transportation services for students and
faculty, mid-day meal catering services and services provided by Indian Institutes of Management.

6. Other Services

These may includes, some judicial services, medical services, organizing services etc.

Example:
^Record the transactions for ‘Exempt Supply of Services under GST’ in Tally.ERP 9:

Date Particulars
02-07-2018 Sales Voucher:
The HSN Developers Pvt. Ltd. of Hyderabad, Telangana, supplied the Business
Consultancy Services for ? 1,40,000 to ‘Fortune Engineering’ based in Telangana.

Solution :

The following steps are to be followed for recording of ‘Exempt Supply of Services under GST’:

Step 1: Creation of Accounting Masters

(a) Create ‘Business Consultancy Services’ Ledger

(i) Go to “Gateway of Tally” > Accounts Info. > Ledgers > Create.

(ii) Enter the following details in ‘Business Consultancy Services’ ledger as shown in the screen below:

. ------------------------ --------- SIA PUBLISHERS AND DISTRIBUTORS PVT. LTD.

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240 THEORY AND PRACTICE OF GST
[ Ledger Creation HSN Developers Pvt. Ltd.

Name Business Consultancy Services Total Opening Balance

5,00,000.00 Dr

Difference
5.00,000.00 Or
Mailing Details
Under Sales Accounts Name
Address
Inventory values are affected ? Yes

Statutory Information
Provide bank details No
Is GST Applicable ? J Applicable
Set/alter GST Details ? Yes
Type of Supply Services Tax Registration Details

Is service tax applicable ? J Undefined PANT Ito.

Set/alter service tax details ? No

Accept ?

Opening Balance ( on 1-Apr-2018) :

Yes cr No

Set/Alter ‘Tax Rate Details’ and Set ‘Taxability’ as ‘Exempt’ as shown in the screen below:
GST Details H

Tax Rate Details

HSN/SAC Details

Description Business Consultancy Sendees

HSN/SAC 974561

Nature of transaction Sales Exempt

Tax Details

From 1-Ap'-20f&

Taxability

Tax Type Rate

Integrated Tax 0 %
Central Tax 0 %
State Tax 0 %
Cess 0 %
J

(b) Create ‘Fortune Engineering’ Ledger

Enter the following details in ‘Fortune Engineering’ Ledger as shown in the screen below:

5IIA PUBLISHERS AND DISTRIBUTORS PVT. LTD.

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UNIT-5 : Recording Advanced Entries and Migration to ERP 241

Set/Alter ‘GST Details’ as shown in the screen below: I

GST Details

Registration type Regular

GSTIN/UIN 36AABCA1234A1Z7
Party Type J Not Applicable
Is a e-Commerce operator ?EEHH
Note: Tax is calculated based on State and Registration Type. Assure that these fields are accordingly defined.
Step 2: Recording of Exempt Services
The following steps should be followed to record the ‘Exempt Services’:
(i) Go to ‘Gateway of Tally’ > Accounting Vouchers ■ F8: Sales Voucher.
(ii) i Press F2 to change the date.
(iii) '
Enter Reference No. as ,H7.
(iv) Enter ‘Fortune Engineering’ in ‘Party A/c name’ field.
(v) Press ‘Ctrl+A’ to save.
(vi) Select ‘Business Consultancy Services’ under Particulars.
(vii) Enter amount as ? 1,40,000.
(viii) Press Enter to Accept.
(ix) While remaining on the same screen (F8: Sales Voucher) Press A: Tax Analysis to view the Tax Calculation
details.
(x) Click F1: Detailed.
(xi) Press ‘Esc’.
(xii) Write ‘Narration’ if required.
(xiii) Press ‘Enter’ to Accept.

. SIA PUBLISHERSAND DISTRIBUTORS PVT. LTD.

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242 THEORY AND PRACTICE OF GST
The ‘Sales’ Voucher transaction is shown in the screen below:

| 2Jul-2018|

Reference no H7 Monday

3artyA/c name Fortune Engineering

■. •rent saitnce 1,40,000.00 Dr

Particulars Rate per Amount

Business Consultancy Services 1,40.000.00

* larration _____________________ 1.40.000,00

The ‘Tax Analysis’ Report is shown in the screen below:

r Tax Analysts HSN Developers Pvt, ltd. cW + h Bi
Tax Analysis

Particulars Taxable Value Tax rate Duty/Tax Value

GST Details

Bwatess Crxtsuftowy Services {974561) ~ ' 1.40.000.00

Sales Value '•40,000.00

Service Tax Details

Unable to determine service category a 1,40.000.00

Business Consultancy Services 1,40,000,00

Therefore, the above execution is a ‘Exempt Supply of Services under GST’. Addition to this, the tax details
of this transaction can be seen in ‘GSTR-1’ Report.

In order to view ‘GSTR-1 ’ Report,

Go to ‘Gateway of Tally’ > Display > Statutory Reports > GST > GSTR-1. The transaction is recorded under
‘Nil Rated Invoices’ as shown in the screen below:

5iA PUBLISHERS AND DISTRIBUTORS PVT. LTD. \ ........ —.....

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UNIT-5 : Recording Advanced Entries and Migration to ERP 243

5.8 EXPORT SUPPLY OF SERVICES

Q18. What do you mean by Export Supply of Services? Illustrate with an example.
Answer:

Export Supply of Services

As per the current GST rules, exports are exempted from tax i.e., they are considered as zero rated. An exporter who
is using various inputs for manufacturing, purchasing or providing exports services can also claim refund of tax.
There are certain conditions laid down by GST rules for a supply which is to be treated as an export of service. Some
of the conditions are as follows,
1. When the supplier of services belongs to India.
2. When the location of services is outside India.
3. When the place of supply is outside India.
4. When the payments received in convertible foreign exchange value by the supplier from recipient for the export
services and the recipient and the supplier not belong to the same person.
Example:
Record the transactions for ‘Export Supply of Services’ in Tally.ERP 9:

Date Particulars.
02-0^-2018 Sales Voucher:
The HSN Developers Pvt. Ltd. registered in Hyderabad, Telangana, supplied the Business
Consultancy Services for ? 1,90,000 to ‘Shining Stars Engineering’ in Singapore.
Solution :
Let us analyze the place of supply:

Place of Supplier Hyderabad, Telangana.

Place of Supply Singapore
Type of Transaction Intra-State
The following steps are to be fol'owed for recording of ‘Export Supply of Services’:
Step 1: Creation of Accounting Masters
(a) Create ‘Business Information Tech. Services’ Ledger
(i) Go to “Gateway of Tally” > Accounts Info. > Ledgers > Create.
(ii) Enter the following details in ‘Business Information Tech. Services’ ledger as shown in the screen below:

- ------- _________ 5IIA PUBLISHERS AND DISTRIBUTORS PVT. LTD.

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244 THEORY AND PRACTICE OF GST
.edger Creation HSN Developers Pvt. Ltd.

'.ame Business Information Tech. Services Total Balance

5,00,000.00 Dr

Difference
5.00,000.00 Dr
Mailing Details
Under Sales Accounts
Name
Address

■'/entory values are affected ? Yes

Statutory Information
Provide bank details No
s GST Applicable ? J Applicable
Set/alter GST Details ? Yes
Type of Supply Services Tax Registration Details

? J Undefined PAN/ITNo
Is service tax applicable
Set/alter service tax details ? No

Accept ?

Opening Balance ( on 1-Apr-2018J

Yes or No

Set/Alter ‘Tax Rate Details’, Select ‘Nature of Transaction’ as ‘Deemed Exports Exempt’ and Set ‘Taxability’
as ‘Exempt’ as shown in the screen below:
GST Details H

Tax Rate Details

HSN/SAC Details

Description : Business Information Tech. Services

HSN/SAC 00998313
Nature of transaction Deemed Exports Exempt

Tax Details

Taxability Exempt

Tax Type Rate

Integrated Tax 0 %
Central Tax 0 %
State Tax 0 %
Cess 0 %

5IA PUBLISHERS AND DISTRIBUTORS PVT. LTD. __

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UNIT-5 : Recording Advanced Entries and Migration to ERP 245
(b) Create ‘Shining Stars Engineering’ Ledger
Enter the following details in ‘Shining Stars Engineering’ Party’s Ledger as shown in the screen below:

Step 2: Recording of Intra-State Outward Supply of Services

The following steps should be followed to record the ‘Export Supply of Services’:
(i) Go to ‘Gateway of Tally’ > Accounting Vouchers > F8: Sales Voucher.
(ii) Press F2 to change the date.
(iii) Enter Reference Invoice No. as ,H8.
(iv) Enter ‘Shining Stars Engineering’ in ‘Party A/c name’ field.
(v) Select ‘Business Information Tech. Services’ under particulars.
(vi) Enter amount as ? 1,90,000.
(vii) Set Provide GST Details as Yes.
(viii) Enter Shipping Bill No. as 986 and Date as 02-07-2018 as shown below:

Additional Details: Deemed Exports Exempt

Shipping bill no. 986 Date 024)7-2013.1

(ix) While remaining on the same screen (F8: Sales Voucher) Click A: Tax Analysis to view the Tax Calculation
details.

SIA PUBLISHERS AND DISTRIBUTORS PVT. LTD.

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246 THEORY AND PRACTICE OF GST

x) Click F1: Detailed.

xi) Press ‘Esc’.

xii) Write ‘Narration’ if required.

xiii) Press ‘Enter’ to Save.

The ‘Export of Services’ in Sales Voucher transaction is shown in the screen below:

|No 7 2Jul-2G18
z Irenes no H8 Monday

■ * -.c name . Shining Stare Engineering

.'.."eu balance . W.WO.OT Dr
- articulars Rate pet Amount

=4«iness Information Tech. Services 1.90,000.00

GST details ■ Yes

.ration ________________1.90.000.00
5e*g Export Supply of Services to Shining Stars ^Singapore.

Therefore the above execution is a ‘Export of Services’, the tax details of this transaction can be seen in ‘GSTR-1’
Report.

In order to view ‘GSTR-1’ Report,

Go to ‘Gateway of Tally’ > Display > Statutory Reports > GST > GSTR-1. The transaction is recorded under
Exports Invoices’ as shown in the screen below:

j STR-1 2-Jul-2018 to 31-Aug-2018

;eturns Summary
'otal number of vouchers for the period 7
included in returns 6
st relevant far returns 1
hcomplete/Mismatch in information (to be resolved) 0
' able Particulars •Count Taxable Value Integrated Tax Central Tax State Tax Amount Cess Amount Tax Amount Invoice Amount
Amount Amount

B2B Invoices
B2CiLafge) Invoices
B2C(Small) Invoices 4 2 75 000 00 24 750 00 24750 00 49 500 00 3.24 500.00
Credfa'Debit Notes
Nil Rated InXes 1 140 000 00
1.40,000 00

Tax Liability on Advances

2 Setoff of Tax Paid against Advances

5.9 REVERSE CHARGE ON SERVICES UNDER GST

Q19. Write about Reverse Charge on Services under GST.
Knswer :

Reverse Charge on Services Under GST

According to reverse charge mechanism the buyer or recipient of goods and services has to pay tax to the credit of
■e Government. It is reverse action of the forward charge mechanism where the supplier has to pay tax. Therefore, under
ST, Reverse charge on services is the liability of buyer to pay tax instead of supplier. The category of such tax would be
regrated tax which has to be paid by the buyer.

SIA PUBLISHERS AND DISTRIBUTORS PVT. LTD. -....-.. ..........................

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UNIT-5 : Recording Advanced Entries and Migration to ERP 247

Services Covered Under Reverse Charge
In case of supply of notified goods and services the reverse charge is applicable. Reverse charge is not only applicable
for services, it is also applicable for goods as well. Addition to this, there are 12 types of services which has been notified
by the government where reverse charge mechanism is applicable. Such services are listed below,
1. Import of Services.
2. Legal Services of Advocates.
3. Services of Goods Transporting Agency.
4. Services of Arbitral Tribunal.
5. Sponsorship Services.
6. Services of Government or Local Authority.
7. Services of Company’s Director.
8. Services of Insurance Agent to Insurance Company.
9. Services of Recovery Agent to Banking or Financing Company.
10. Services provided through transport of goods in a vessel from place outside India to custom station for clearance in
India.
11. Services provided through transfer of copyright relating to original literary, dramatic, musical or artistic works.
12. Cab services provided through E-commerce operators.
Addition to the above services, reverse charge is also applicable in case of supply by an unregistered dealer to a
registered dealer. Such supplies are applicable for tax and the recipient of services has to pay such tax.
Time of Supply of Services Under Reverse Charge
In reverse charge mechanism of services under GST, the time of supply would be the earliest of the following dates.
1. Date of the receipt of goods and services.
2. Date of payment recorded in the accounting books of recipient.
3. Date on which payment is debited to the bank account.
4. Date immediately following thirty days from the date of issue of invoice by supplier.
However, if it is getting difficult to identify the time of supply, then in such situation date of entry in the accounting
Ijpoks of the recipient will be considered as time of supply.•
Q20. Record the transactions for ‘Imports with GST on Reverse Charge’ in Tally.ERP 9:

Date Particulars
01-08-2018 Purchase Voucher:
The HSN Developers Pvt. Ltd. avails Franchises Services on USPA (U.S. Polo Association)
Apparels of ? 2,50,000 from ‘Meon Designers in Queenstown, Singapore.
02-08-2018 Payment Voucher:
The HSN Developers Pvt. made a payment to Meon Designers in Queenstown, Singapore
against Franchises Services on USPA apparels.

Solution :

In the given problem, Integrated Tax is applicable as Meon Designers of Queenstown, Singapore, is providing import
franchise services on USPA (U.S. Polo Association) Apparels to HSN Developers Pvt. Ltd.
The following steps are to be followed for recording transactions for “Import with GST on Reverse Charge
and Setting Tax Details”:
SIIA PUBLISHERS AND DISTRIBUTORS PVT. LTD.

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248 THEORY AND PRACTICE OF GST

Step 1: Creation of Accounting Masters
(a) Create ‘Meon Designers (Queenstown)’ Ledger
(i) Go to “Gateway of Tally” > Accounts Info. > Ledgers > Create.
(ii) Enter the following details in ‘Meon Designers (Queenstown)’ ledger as shown in the screen below:

(b) Create ‘Franchises Services’ Ledger

Enter the following details in ‘Franchises Services’ Ledger as shown in the screen below:

| Name Franchises Services Total Opening Balance ;

| (a/fss)
5.00,000.00 Dr

Difference
5,00,000.00 Dr
Mailing Details
i Under Indirect Expenses Name
Address
i Inventory values are affected ? No

Country

Statutory Information
Provide bank details No
Is GST Applicable ? J Applicable
Setzalter GST Details ? Yes
Type of Supply : Services Tax Registration Details
PAN/IT No
Is service tax applicable ? J Undefined
Set/alter sendee tax details ? No

Accept?
Opening Balance ( on 1-Apr-2018) :
Yes cr No

5IA PUBLISHERSAND DISTRIBUTORS PVT. LTD. _______

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UNIT-5 : Recording Advanced Entries and Migration to ERP 249

Set/Alter ‘Tax Rate Details’ as shown in the screen below:

(c) Create ‘Integrated Tax’ Ledger

Enter the following details in ‘Integrated Tax’ Ledger as shown in the screen below:
| ledger Creation HSN Developers Pvt. Ltd.

Name Integrated Tax Total Opening Balance

{alias}
5,00,000.00 Dr

Difference
5,00,000.00 Dr
Mailinq Details
Under Duties & Taxes Name
(Current Liabilities) Address
Type of duty/tax GST
Tax type Integrated Tax
- Inventory values are affected ? No
Percentage of calculation 2 0%

I Rounding method J Not Applicable

Provide bank details Ho
Statutory information
Tax Registration Details
PAt'MTNo.

•
Accept ?

Opening Balance on 1-Apr-2018): Yes or No

(d) Create ‘Current Assets’ Ledger

Enter the following details in ‘Tax on Imports (Current Assets)’ Ledger as shown in the screen below:
__________________ :____ SIA PUBLISHERS AND DISTRIBUTORS PVT. LTD.

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250 THEORY AND PRACTICE OF GST

Step 2: Recording of Import Services

The following steps should be followed to record the transactions of ‘Import Services’:
(i) Go to ‘Gateway of Tally’ > Accounting Vouchers > F9: Purchase Voucher.
(ii) Press F2 to change the date to 01-08-2018.
(iii) Enter Supplier Invoice No. as SG/09.
(iv) Enter ‘Meon Designers (Queenstown)’ in ‘Party A/c name’ field.
(v) ‘Accept’the Party Details screen.
(vi) Select ‘Franchises Services’ under Particulars.
(vii) Enter amount as ? 2,50,000.
(viii) Then the ‘Bill-Wise Details’ screen appears, select New Ref. with name SG/09 and Accept the details as shown
below,

• ix) While remaining on the same screen (F9: Purchase Voucher) Click A: Tax Analysis to view the Tax Calculation
details.
x) Click F1: Detailed. The ‘Tax Analysis’ Report is shown in the screen below:

SIA PUBLISHERS AND DISTRIBUTORS PVT. LTD. _____

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UNIT-5 : Recording Advanced Entries and Migration to ERP 251

(xi) Press ‘Esc’.

(xii) Write ‘Narration’ if required.
(xiii) Press ‘Enter’ to Save.
The ‘Import Services’ in Purchase Voucher transaction is shown in the screen below:
ISHDCIZ
1 z - v ' ''‘T" ISllfe h SB hiKHi bikini
Supplier invoice no.. SG/09 Date : 1-Aug-201S Wednesday

Party A/c name f4eon Designers (Queenstown)

Cij/rgfit baignce 2r50,009.00 Cr

Particulars Rate per Amount

Franchises Services 2,50.000.00

Provide GST details No

2,50,000.00 i
Narration.

Therefore, the above execution is for ‘Import Services’. The tax details of this transaction can be seen in ‘GSTR-2'
Report.
«
In order to view ‘GSTR-2’ Report,
Go to ‘Gateway of Tally’ > Display > Statutory Reports > GST > GSTR-2. The transaction is recorded under
‘Imports of Services Invoices’. The taxable value will be ? 2,50,000, Integrated Tax value will be ? 45,000 and the
Total ‘Tax Amount’ will be ? 45,000.
Step 3: Recording of Payments to the Supplier of Services
The following steps should be followed to record ‘Payments made on Import Services’,
(i) Go to ‘Gateway of Tally’ > Accounting Vouchers > F5: Payment Voucher.
(ii) Press F2 to change the date to 02-08-2018.
(iii) Select ‘Kotak Mahindra Bank’ under A/c field.

- SIA PUBLISHERSAND DISTRIBUTORS PVT. LTD

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252 THEORY AND PRACTICE OF GST
(iv) In Particulars field select ‘Meon Designers (Queenstown)’ ledger and Enter amount as ? 2,50,000 and press
Enter.
(v) Then the ‘Bill-Wise Details’ screen appears, select Agst Ref. with name SG/09 and Accept the details as shown
below,

The ‘Payment Voucher’ transaction is shown in the screen below:

| Accounting Voucher Alteration HSN Developers Pvt. Ltd. Ctrf + M □

MSZBESBIB no. 2
Thursday
< • j
Account Kotak Mahindra Bank
Curse. 3.15.000.00Dr

Particulars Amount

Meon Designers [Queenstown) 2,50.000.00

Gar Sal 0.00 Or
Agst Ref SG/09 2,50,000.00 Dr

Narration 2,50,000.00
Being Payment made to Mean Designers Singapore on Imports

(vi) Write Narration if required.

(vii) Press Enter to Accept.
Step 4: Recording of Journal Voucher to Increase Tax Liability on Imports of Services
The following steps should be followed to record Journal Voucher,
(i) Go to ‘Gateway of Tally’ > Accounting Vouchers > F7: Journal Voucher.
(ii) Press F2 to change the date to 02-08-2018.
(iii) Press J: Stat Adjustment and Set ‘Type of Duty/Tax’ as GST, ‘Nature of Adjustment’ as ‘Increase of Tax
Liability’ and ‘Additional Details’ as ‘Imports’ as shown below,
f’
Stat Adjustment

R-2' Type of duty/tax GST

Nature of adjustment Increase of Tax Liability

inder
Additional Details
d the
Additional Details Qm ports

(iv) Press ‘Enter’.

(V) Select ‘Tax on Imports’ in Debit field and enter amount the as ? 45,000 and press Enter.
(vi) Select ‘Integrated Tax’ in Credit field and enter amount the as ? 45,000 and press Enter.
(vii) Write Narration if required.

-TD. SIA PUBLISHERSAND DISTRIBUTORS PVT. LTD. _____

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UNIT-5 : Recording Advanced Entries and Migration to ERP 253

The ‘Journal Voucher’ transaction is shown in the screen below:
Mo 1
Thursday
Use# for: Increase of Tax Liability

Particulars Debit Credit

Dr Tax an Imparts 45,000.00
CiirSa-1 45.0Q0.00 Dr
Cr Integrated Tax 45,000.00
■■ O Ssf 45,iW.yti Cr

Narration 45,000.00 45.000.00

Being Tax Liability increased! Against imports

After recording the above transactions, the ‘Adjustments of increasing the Input Tax Credit, tax values against the
imports (Current Assets)’ ledgers will be resolved. The ‘Integrated Tax’ will be a debit balance, which results in the
availability of Input Tax Credit (ITC).
Activity for Practice
Record Journal voucher for increase of Input Tax Credit (Imports);
(i) Debit side ‘Integrated Tax’ ? 45,000
(ii) Credit side ‘Tax on Imports’ T 45,000.
Q21. From the following details record advance payment to Unregistered Dealer with GST on Reverse Charge
and making purchase on later date:

Date Particulars
01-08-2018 Payment Voucher:
The HSN Developers Pvt. Ltd. made advance payment of ? 25,000 to Mr. Prem
(Unregistered Dealer) from Patel Road, Hyderabad with a consideration of receiving
Wireless Keyboards on later date.
02-08-2018 Purchase Voucher:
The HSN Developers Pvt. received the stock of 80 wireless Keyboards worth ? 250 each
from Mr. Prem.
Solution :
In the given problem, HSN Developers Pvt. Ltd. is purchasing Wireless Keyboards from Mr. Prem. In this case,
CGST and SGST taxes are applicable and HSN Developers Pvt. Ltd. is liable to pay tax to the Government based on
Reverse Charge mechanism.
In order to record the following steps should be followed in Tally.ERP 9:
Step 1: Creation of Accounting Masters
(a) Create ‘Purchase Account’ Ledger
(i) Go to “Gateway of Tally” > Accounts Info. > Ledgers > Create.
(ii) Enter the following details in ‘Purchase Account’ ledger as shown in the screen below:
Name Purchase Account Total Opening Balance i
('a*88?
5,00,0W.0§ Dr !

Dffferersce
5,00.(100.00 D<-
Mailing Details
Under Purchase Accounts Name
Address

Inventory* values are affected ? Yes

Statutory Information Provide bank details No

Is GST Applicable ? J Applicable Tax Registration Details

Set/alter GST Details ? Yes
Type of Supply Goods PANdTHo.
Is service tax applicable ? J Undefined
Seftalter service iax details .? No

Accept?

Opening Balance on 1-Apr-2018) -x Yes ;■ Ho

SIA PUBLISHERS AND DISTRIBUTORS PVT. LTD.

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254 THEORY AND PRACTICE OF GST
Set/Alter ‘Tax Rate Details’ as shown in the screen below:
| GST Details

Tax Rate Details

HSN/SAC Details

Description Trademark & Franchises

HSN/SAC 987421
Nature of transaction J Not Applicable
■
Tax Details
c
Taxability Taxable

Tax Type Rate

Integrated Tax 18 %
Central Tax 9 %
State Tax 9 %
Cess ■%
(b) Create Party’s Ledger i.e., ‘Mr. Prem’
Enter the following details in ‘Mr. Prem’ Ledger as shown in the screen below:
I Ledger Display HSW Devefc>p+?rs Pvt. Ltd.
Name Mr. Prem Total Opening Balance

5,00,000.00 Dr

Differer-ce
S.OQM.OODr

Mailing Details
Under . Sundry Creditors
Name . Mr. Prem
(Curreni U.ab^^eg;
Addtess
Maintain balances bill-by-bili ? Yes
Default credit period
Check for credit days during voucher entry ? Ho
Inventory values ate affected ? No Country India
State : Telangana Pincode

Provide bank details No

Tax Registration Details

PAN/IT No
•
Set/alter GST details ? No
Set/alter semes tax details ? Ho

Opening Balance (on 1-Apr-2O1SJ :

Set/Alter ‘Tax Rate Details’ as shown in the screen below:

Registration type
GSTIN/UIN
Party Type
Is a e-Commerce operator

SIA PUBLISHERS AND DISTRIBUTORS PVT. LTD.

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UNIT-5 : Recording Advanced Entries and Migration to ERP 255

(c) Create ‘Tax on URD Purchase’ Ledger
Enter the following details in ‘Tax on URD Purchase’ Ledger (URD = Unregistered Dealer) as shown in the
screen below:
i Ledqer Aiteratxw HSN Oeveiopers Pvt. Ltd.
lotai Opening Balance i
Name . Tax on URD Purchase
(avasl
5.00,000.00 Dr
i
Difference
5,00,00100 Dr |
Mailina Details
Under Current Assets Name Tax on URD Purchase
Address

Inventory values are affected 7 No

Country Singapore

Provide bank details ; No

Statutory Infennation

Include in assessable value calculation for. J Not Applicable

Tax Registration Details
PAN/rr No. SGLPA1234S
Set/alter GST details ? No
Sst/alfer series tax details ? No

• »

Accept ?

Opening Balance I on 1-Apr-2018) ; Yes ■, Mo

Step 2: Creation of Inventory Masters

(i) Go to “Gateway of Tally” > Inventory Info. > Stock Items > Single Stock Items > Create.
(ii) Enter the following details in ‘Stock Items’ info, as shown in the screen below:

SIIA PUBLISHERS AND DISTRIBUTORS PVT. LTD.

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256 THEORY AND PRACTICE OF GST

Set/Alter ‘Tax Rate Details’ as shown in the screen below:

GSTDetaMs

Tax Rate Details

HSN/SAC Details

Description . Keyboards
HSN/SAC 986532

Tax Details

Calculation type On Value

Taxability Taxable

Tax Type Rate

Integrated Tax 18 %
Central Tax 9 %
StateTax 9 %
Cess 0

Step 3: Recording of Advance Payments to Supplier on Purchase from Unregistered Dealer (URD)
The following steps should be followed to record the transactions of‘Advance Payments to Supplier’:
(i) Go to ‘Gateway of Tally’ > Accounting Vouchers > F5: Payment Voucher.
(ii) Press F2 to change the date to 01-08-2018.
(iii) Press ‘V: Reverse Chrg. Adv.’ used for Advance Payment Under Reverse Charge.
(iv) Enter ‘Kotak Mahindra Bank’ in ‘Account’ field.
(v) Select ‘Mr. Prem’ ledger under Particulars.
(vi) Auer selecting the party ledger, ‘Advance Payment Details’ screen appears.
(vii) In Advance Payment Details screen, select stock item as Wireless Keyboards.
(viii) Enter amount as ? 25,000 and press Entef.
(ix) The Central Tax, State Tax and Amount gets calculated automatically (i.e., Rate : 9% and Amount: f 2,250)
as shown in the screen below, • V. ..

Advance Payment Details

Stock Item Ledger Marne Amount Central Tax State Tax Cess
Rate Amount Rate Amount Rate Amount

Wireless Keyboards J Not Applicable 9 % 2,250.00 9 % 2,250.00

25,000.00 2.25-0.&0 2,250.00

SIA PUBLISHERS AND DISTRIBUTORS PVT. LTD.

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UNIT-5 : Recording Advanced Entries and Migration to ERP 257

(x) Press Enter to Accept.
( J) Then the ‘Bill-Wise Details' screen appears, select ‘Advance’ as the Type of Reference with name Adv 2 and
Accept the details as shown below,.

(xii) Press Enter to Accept.

(xiii) Write ‘Narration’ if required.
* >
(xiv) Press ‘Enter’ to Save.
The ‘Payment Voucher’ transaction is shown in the screen below:

No 2
■ Wednesday
Used for Advance Payment Under Reverse Charge

Account Kotak Mahindra Bank

Cur Sat 2,90,000.00 Dr
1 Particulars Amount

i ivir. Prem 25.G00.00

C^rBa-: 25.000.00 Dr
■ Advance Adv 2 25,900.00 Dr

Narration __________________ 25,000.00

Note: Transaction of Payment Vouchers without Clicking V: Reverse Chrg. Adv. Will not have GST implications
and will not be part of GSTR-2.
* The above execution is an ‘Advanced Payment made to Unregistered Dealer’, the tax details of this transaction
can be seen in ‘GSTR-2’ Report.
In order to view ‘GSTR-2’ Report,
Go to ‘Gateway of Tally’ > Display > Statutory Reports > GST > GSTR-2. The transaction is recorded under
‘Tax Liability under Reverse Charge on Advance’. The taxable value will be ? 25,000, Central Tax value will be
? 2,250, Central Tax value will be ? 2,250 and the Total ‘Tax Amount’ will be ? 4,500.
Step 4: Recording of Journal Voucher to Increase the Tax Liability on Purchase from URD
The following steps should be followed to record ‘Journal Transactions in the Books of HSN Developers Pvt. Ltd.'.
(i) Go to ‘Gateway of Tally’ > Accounting Vouchers > F7: Journal Voucher.
(ii) Press F2 to change the date to 02-08-2018.
(iii) Select J: Stat Adjustment option from right side of the function keys.
(iv) Then from the J: Stat Adjustment screen, Set ‘GST’ in the field of Type of Duty/Tax.
(v) Set Nature of Transaction as ‘Increase of Tax Liability’ and Additional Details as “Advances Pai:
under Reverse Charge” as shown in the screen below,

-------------- ' ■ . SIA PUBLISHERS AND DISTRIBUTORS PVT. LTD

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258 THEORY AND PRACTICE OF GST

(vi) Press Enter to Accept.

(vii) The screen return backs to Journal Voucher, select Tax on URD Purchase in Debit field and enter amount as
? 3,600 (80 Keyboards * ? 250 each = ? 20,000; ? 20,000 x 18% = 3,600) and Press Enter.
(viii) Select Central Tax in Credit field and enter Amount as ? 1,800 (Half of Actual Purchase) and Press Enter.
(ix) Select State Tax in Credit field and enter Amount as ? 1,800 (Half of Actual Purchase) and Press Enter.
(x) Write Narration if required.
(xi) Press Enter to Accept.
The ‘Journal Voucher’ transaction is shown in the screen below:

Step 5: Recording of Purchase from URD Transaction for Inward Supply

To record Purchase Voucher, ensure that Purchase Voucher is in Item Invoice mode,
(i) Go to ‘Gateway of Tally’ > Accounting Vouchers > F9: Purchase Voucher.
(ii) Press F2 to change the date to 02-08-2018.
(iii) Select ‘Mr. Prem’ in Party’s Account Name. '
(iv) Select Purchase A/c in Purchase Ledger field.
(v) Select ‘Wireless Keyboard’ in Name of Items, enter quantity as 80 nos. and rate as ? 250 and press Enter.
(vi) Write Narration if required.
(vii) Press Enter to Save.

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UNIT-5 : Recording Advanced Entries and Migration to ERP 259

The ‘Purchase Voucher’ transaction is shown in the screen below:
Accounting Voucher Alteration HSH Developers Pvt. Ltd. Ctri + M C|

i Supplier invoice no : SG/10 Date . 2-Aug-2018 Thursday!

i Party A/c name : Mr. Prem

i Current balance 6.000,00 Dr
i Purchase ledger Purchase Account
I Name of Item Quantity Rate per Amount i

i Wireless Keyboards 80 nos 250.00 nos 20,000.001

i Narration. 80 nos 20JN0.00

Step 6: Recording of Payment Voucher to Pay Tax Liability to Department against Purchase from URD
To record Payment Voucher, follow the steps given below,
(i) Go to ‘Gateway of Tally’ > Accounting Vouchers > F5: Payment Voucher.
(ii) Press F2 to change the date to 02-08-2018. v
(iii) Select S: Stat Payment option from right side of the function keys for Statutory Payment.
(iv) Set GST in Tax Type, Period as 01-07-2018 to 31-08-2018 and Payment Type as Recipient Liability as
shown in the screen below,
Statutory Payment

Tax Type GST

Period From 1Jul-201§ To
Payment Type

(V) Select ‘Kotak Mahindra Bank’ in the Account field.

(vi) Select State Tax in Particulars field and enter Amount as ? 1,800 and Press Enter.
(vii) Select Central Tax in Particulars field and enter Amount as ? 1,800 and Press Enter.
(viii) Enable the Provide GST Details to Yes.
(ix) After Enabling the GST Details to Yes, the Bank Details screen appears, provide the following details as shown
below,

» Bank Details

Mode of payment NEFT/RTGS

Name of the Bank Kotak Mahindra
Common Portal Identification Numberi'CPIN): 896854
Challan Identification Number(CIN) 124563
BRN/UTR 000963
Payment date

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260 THEORY AND PRACTICE OF GST

(x) Press Enter to Accept.
• xi) Write Narration if required.
The ‘Payment Voucher’ transaction is shown in the screen below:

2-Aug-2018
Thursday

Statutory payment for: GST

(Payrnertf Type Reopen! batwi/J

Account Kotak Mahindra Bank

Cur Bal 2,86,400.00 Dr
Particulars Amount

State Tax 1,800.00

Cur Bat 19.800.90 Cr
Central Tax 1.800.00
Bal 19,800.00 Cr

Provide GST Details Yes

Narration:

The liability value is knocked off after increasing of Liability and Payment to Dept., and the value will remain only
in Tax on Unregistered Dealer Purchase (Current Assets) Ledger.
Step 7: Recording of Journal Voucher to Increase the Input Tax Credit on Purchase from URD after
Payment of Liability to Department
To record Journal transaction, follow the steps given below,
(i) Go to ‘Gateway of Tally’ > Accounting Vouchers > F7: Journal Voucher.
(ii) Press F2 to change the date to 02-08-2018.
(iii) Select J: Stat Adjustment option from right side of the function keys for Statutory Adjustment.
(iv) Set GST in Type of Duty/Tax, Nature of Adjustment as Increase of Input Tax Credit and Additional
Derails as Purchase under Reverse Charge as shown in the screen below,

Stat Adjustment

Type of duty/tax GST

Nature of adjustment Increase of Input Tax Credit

Additional Details

Additional Details Purchase under Reverse Charge.

List of Nature of Adjustments

Purchase under Reverse Charge

I

(v) Press Enter to Accept.

(vi) The screen return backs to Journal Voucher.
(vii) Select State Tax in Debit field and enter Amount as ? 1,800 and Press Enter.

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UNIT-5 : Recording Advanced Entries and Migration to ERP 261

(viii) Select Central Tax in Debit field and enter Amount as ? 1,800 and Press Enter.
(ix) In Credit field select Tax on URD Purchase and enter Amount as ? 3,600 and Press Enter.
(x) Write Narration if required.
(xi) Press Enter to Accept.
The ‘Journal Voucher’ transaction is shown in the screen below:

: narration 3,600.00 3,600.00

Being Input Tax Credit availed on Purchase from Unregistered Dealer after Tax Payment to
| Dept under Reserve Charge

The Value of Tax on Unregistered Dealer Purchase (Current Assets) ledger will be knocked off. After recording the
above adjustments of increasing the Input Tax Credit, the State and Central Tax amounts will show a debit balance which
may results in availability of Input Tax Credit (ITC).

5.10 ADVANCE RECEIPTS FROM CUSTOMERS UNDER GST - ADVANCE RECEIPTS AND ISSUING
INVOICE ON SAME MONTH
Q22. Explain the concept of advance receipts from customers under GST. Write a short note on advance
receipts and issuing invoice in same month.
Answer : Model Paper-Ill, Q13(a)

Advance Receipts from Customers under GST

Receipt of Advance from the customer is one of the major criteria which is used for determining time of supply.
Taxes are also applicable on advance receipts of payment or before the issue of invoice or making supply to customers.
Morever, the amount of advance receipt is assumed to be inclusive of taxes if it is not paid separately by the customer at
the time of advance payment.
In Tally.ERP 9, the advance amount received from the customers can be recorded is the receipt voucher which would
be marked as advanced receipt and printed with GST details. If any invoice is issued as an advance received in a different
tax period, the voucher recorded for advance amount received has to be tracked against it.
The advanced receipts from customers under GST is recorded in Tally.ERP 9 based on following factors or criterias.
1. Advance Receipt and Issuing Invoice in same month.
2. Advance Receipt and Issuing Invoice in different month.
3. Reversal of GST on Account of Cancellation of Advance Receipt.

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262 THEORY AND PRACTICE OF GST

Advance Receipts and Issuing Invoice in Same Month
The advance receipts from customer under GST is exclusive of taxes and it will be adjusted against sales invoice in
the same month of receipt date. The advance receipt and issuing sales invoice in same month is explained with the help of
following example.
Example:
From the following details record Advance Receipts from customer with GST and issuing Sales
Invoice in the same month and checking tax analysis details:

Date Particulars
01-08-2018 Receipt Voucher:
Zuberi Recreations Ltd. Medak, Telangana, has organized a sports event on Hockey and
wanted to repair/alter the Turf Court (Playground). The company has dealings with HSN
Developers Pvt. Ltd. and made advance payment of ? 65,000
02-08-2018 Sales Voucher:
The HSN Developers Pvt. made a Bill of Supply in the name of Zuberi Recreations .Ltd.
against Services involving repairs and alterations for ? 90,000.

Solution :

In the given problem, HSN Developers Pvt. Ltd. is rendering services to Zuberi Recreations Ltd in Medak. telaugam..
In this case, CGST and SGST taxes are applicable and HSN Developers Pvt. Ltd. is liable to pay tax to i iv.. gow. .
record the following transactions in Tally.ERP 9:
Step 1: Creation of Accounting Masters
(a) Create ‘Purchase Account’ Ledger
(i) Go to “Gateway of Tally” > Accounts Info. > Ledgers > Create.
(ii) Enter the following details in ‘Repairs & Alterations Services’ ledger as shown its the screen below:

Name Repairs & Alterations Services . Total Opening Balance I

(alias)
5,00.000.00 Dr ■

Difference
5,00. 000. 00 Dr |
Mailing Details
Under Indirect Incomes Name
Address
Invents^ values are affected ? No

Country

Statutory Information
provide bank details - No
Is GST Applicable ? J Applicable
Set/alter GST Details ? Yes
Type of Supply Services Tax Registration Details
Is service tax applicable ? J Undefined
Set/alter service tax details ? No

<

Accept ?

Opening Balance ( on 1 -Apr-2018) : Yes :' No

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4
UNIT-5 : Recording Advanced Entries and Migration to ERP 263
Set/Alter ‘Tax Rate Details’ as shown in the screen below:

(b) Create Party’s Ledger i.e., ‘Zuberi Recreations Ltd.’

Enter the following details in ‘Zuberi Recreations Ltd.’ Ledger as shown in the screen below:

Marne Zuberi Recreations Ltd. Total Opening Balance

5.00,000.00 Dr

Difference
5.00.000 00 Dr
Mailing Details
Under . Sundry Debtors Name ' Zuberi Recreations Ltd.
fCixcen? .Assersi Address

Maintain balances bill-by-btll ? Yes

Default credit period
Check for credit days dunng 'toucher entry ? Mo
Country India
Inventory values are affected ? Mo
State Telangana Pincode

Provide bank details No

Tax Registration Details

PAU/ITNo AKLPR7895L
Set'alter GST details ? Yes
SetZaiter service tax details ? No

Accept ?

Opening Balance ( on 1-Apr-2018| Yas o- No

Set/Alter ‘GST Details’ as shown in the screen below:

GST Details

Registration type Regular

GSBN/UIN 36AAAAA4321A1ZS

Party Type J Not Applicable

Is a e-Commerce operator

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264 THEORY AND PRACTICE OF GST

Step 2: Recording of Advance Receipts from Customer on Same Month
The following steps should be followed to record the transactions of ‘Advance Payments to Supplier’:
:i Go to ‘Gateway of Tally’ >Accounting Vouchers > F6: Receipt Voucher.
ii) Press F2 to change the date to 01 -08-2018.
iri) Press ‘V: Advance Receipt’.
iv) Enter ‘Kotak Mahindra Bank’ in ‘Account’ field.
v) Select ‘Zuberi Recreations Ltd.’ ledger under Particulars.
vi) After selecting the party ledger, ‘Advance Receipts Details’ screen appears.
ivii) In Advance Receipts Details screen, select stock item as Not Applicable, Ledger Name as Repairs &
Alterations Services and enter amount as ? 65,000 as showm in the screen below,

Advance Receipt Details

Stock item Ledger Name Amount Central Tax State Tax Cess
Rate Amount Rate Amount Rate Amount

•* Not Applicable Repairs & Alterations Services - 5,850.00 9% 5,850.00

65,000.00 5,850.00

(viii) Press Enter.

(ix) The Central Tax, State Tax and Amount gets calculated automatically (i.e., Rate: 9% and Amount: ? 5,850)
as shown in the above screen.
(x) Press Enter to Accept.
(xi) Then the ‘Bill-Wise Details’ screen appears, select ‘Advance’ as the Type of Reference with name Adv 01
and Accept the details as shown below,

(xii) Press Enter to Accept.

(xiii) Write ‘Narration’ if required.
(xiv) Press ‘Enter’ to Save.

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UNIT-5 : Recording Advanced Entries and Migration to ERP 265

The ‘Receipt Voucher’ transaction is shown in the screen below:

EEJFE3E
Wednesday
Used for. Advance Receipt

Account Kotak Mahindra Bank

Cur 8a; 3f51M.WDr
Particulars Amount
Zuberi Recreations Ltd. 65.000.00
66.009.09 Cr
Advance Adv 01 65,000.00 Cr

liarration 65,000.00

The above execution is an ‘Advanced Receipt from the Customer on Same Month’, the tax details of this
transaction can be seen in ‘GSTR-1 ’ Report.
In order to view ‘GSTR-1 ’ Report,
Go to ‘Gateway of Tally’ > Display > Statutory Reports > GST > GSTR-1. The transaction is recorded under
‘Tax Liability on Advances’. The taxable value will be ? 65,000, Central Tax value will be ? 5,850, Central Tax value
will be ? 5,850 and the Total ‘Tax Amount’ will be ? 11,700 payable by HSN Developers Pvt. Ltd.
Step 3: Recording of Sales Transaction for Outward Supply of Services
The following steps should be followed to record the transactions of‘Sales for Outward Supply of Services’:
(i) Go to ‘Gateway of Tally’ > Accounting Vouchers > F8: Sales Voucher (Make sure Sales voucher is
in I: Accounting Invoice mode).
(ii) Press F2 to change the date to 02-08-2018.
(iii) Enter the Reference No. as ZA/01.
(iv) Select ‘Zuberi Recreations Ltd.’ ledger under Party A/c Name.
(v) After selecting the party’s ledger, the Supplementary Details screen appears, press Enter and Accept the screen.
(vi) Select Repairs & Alterations Services ledger under Particulars field.
(vii) Enter amount as ? 90,000 and press Enter to Accept.
(viii) Select ‘Central Tax’ and ‘State Tax’ ledgers, the deducted tax amount get automatically calculated.
(ix) Select the V: As Voucher mode, from the right side function keys, then the ‘Bill-Wise Details’ screen appears.
(x) In ‘Bill-Wise Details’ screen, select ‘Agst Ref.’ as the Type of Reference with name Adv 01 and enter the
amount as ? 65,000. Then select New Ref. as the Type of Reference with name as New 01 and the amount
gets automatically calculated as shown below,

Bill-wise Details for: Zuberi Recreations Ltd.

Upto r 1,06,200.00 Dr
Type of Ref Name Due Date, or Amount Dr/
Credit Days Cr
(wef. 2-Aug-2018)

Agst Ref Adv 01 65,000.00 Dr

New Ref New 01 41.200.00 FB

1,06,200.00 Dr

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266 THEORY AND PRACTICE OF GST

(xi) Press Enter to Save.
(xii) Press Alt + A keys to view Tax Analysis details or Tax Calculation details. Press F1: Detailed key for detailed
tax report.
(xiii) Press ‘Esc’ from Tax Analysis screen.
(xiv) Press Enter to Accept.
(xv) Write ‘Narration’ if required.
(xvi) Press ‘Enter’ to Save.
The ‘Sales Voucher’ transaction is in V: As Voucher mode as shown in the screen below, it can also be viewed
in V: As Invoice mode by pressing the ‘V’ Function Keys (Short-cut Function Keys):

Reference no ZA.'Ol Thursday

Particulars Debit Credit

0r Zuberi Recreations Ltd. 1,06,200.00

&/-&■ 41,200.60 Dr
Agst fa Adv 01 1,06,200.00 Dr
Nsw Ref New 01 41,200.00 Or
OtArart 41,280,08 Cr
Cr Repairs & Alterations Services 90,000.00

Cr Central Tax 8,100.00

Ci/rSat 26.0.00 Cr
Cr State Tax • 8,100.00
Cui-Bai 26,100.00 Cr

Narration: 1,06,200.00 1,06,200.00

The GST Details of the above execution is recorded under GSTR-1 Report. In order to view GSTR-1 report,
Go to ‘Gateway of Tally’ > Display > Statutory Reports > GST > GSTR-1.
5.10.1 Advance Receipts and Issuing Invoice on Different Month_____________
Q23. Explain with example the concept of Advance Receipts and Issuing Invoice in Different Month.
Answer :

Advance Receipts and Issuing Invoice in Different Month

In some cases, the advance receipt from customer under GST is exclusive of taxes and it will be adjusted against
sales invoice in the different month of receipt date. The advance receipt and issuing sales invoice in different month is
explained with the help of following example.
P/e:
From the following details record Advance Receipts from customer with GST and issuing Sales
Invoice in different month and checking tax analysis details:

Date Particulars
01-07-2018 Receipt Voucher:
Zuberi Recreations Ltd. Medak, Telangana, wanted to build a Bus Shelter in-front of their
office. The company has dealings with HSN Developers Pvt. Ltd. and made advance
payment of ? 25,000.
02-08-2018 Sales Voucher:
The HSN Developers Pvt. made a Bill of Supply in the name of Zuberi Recreations Ltd.
against Services involving Installation Services for ? 37,500.
Solution :

In the given problem, HSN Developers Pvt. Ltd. is rendering services to Zuberi Recreations Ltd. in Medak, Telangana.
In this case, CGST and SGST taxes are applicable and HSN Developers Pvt. Ltd. is liable to pay tax to the govt. Now
record the following transactions in Tally.ERP 9:

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UNIT-5 : Recording Advanced Entries and Migration to ERP 267

Step 1: Creation of Accounting Masters
Create ‘Installation Services’ Ledger
(i) Go to “Gateway of Tally” > Accounts Info. > Ledgers > Create.
(ii) Enter the following details in ‘Installation Services’ ledger as shown in the screen below:

Set/Alter ‘Tax Rate Details’ as shown in the screen below:

1 GST Details

Tax Rate Details

HSN/SAC Details

Description Installation Services {Bus Shelter)

HSN/SAC 963142
Nature of transaction J Not Applicable

Tax Details

Taxability Taxable
Tax Type Rate
integrated Tax 18 %
Central Tax 9 %
State Tax 9 %
Cess ' M%
Step 2: Recording of Advance Receipts from Customer
The following steps should be followed to record the transactions of ‘Advance Receipt’:
(i) Go to ‘Gateway of Tally’ >Accounting Vouchers > F6: Receipt Voucher.
(ii) Press F2 to change the date to 01-07-2018.
(iii) Press ‘V: Advance Receipt’ to record Receipt in Advanced.

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268 THEORY AND PRACTICE OF GST

(iv) Enter ‘Kotak Mahindra Bank’ in ‘Account’ field.
(v) Select ‘Zuberi Recreations Ltd.’ ledger under Particulars.
(vi) After selecting the party ledger, ‘Advance Receipts Details’ screen appears.
(vii) In Advance Receipts Details screen, select stock item as Not Applicable, Ledger Name as Installation
Services and enter amount as ? 25,000 as shown in the screen below,
a
Advance Receipt Details

Stock Item Ledger Name Amount Central Tax State Tax Cess j
Rate Amount Rate Amount Rate Amount j

J Not Applicable Installation Services 25,000.00 9% 2,250.00 9 % 2,250.00 )

25.000.00 2,250.00 '2,250.00

(viii) Press ‘Enter’.

(iv) The Central Tax, State Tax and Amount gets calculated automatically (i.e., Rate: 9% and Amount: ? 2,250)
as shown in the above screen.
(v) Press Enter to Accept.
Then the ‘Bill-Wise Details’ screen appears, select ‘Advance’ as the Type of Reference with name Adv 02
and Accept the details as shown below,

Bill-wise Details for Zuberi Recreations Ltd.

Type of Ref Name Due Date, or Amount Dr/1
Credit Days . . Cr
iwef: 1-Jul-2018i

Advance Adv 02 25,000.00

25,000.00 Cr
(x) Press Enter to Accept.
(xi) Write ‘Narration’ if required.
(xii) Press ‘Enter’ to Save.
The ‘Receipt Voucher’ transaction is shown in the screen below:
I Accounting Voucher Alteration HSN Developers Pvt. Ltd. ctw+m ni
■KZS33BI No. 1 EEEEID
Sunday
Used fcr. Advance Receipt

Account Kotak Mahindra Bank •

Cur Bai. 3,76.400.00 Dr

Particulars Amount
r
Zuberi Recreations Ltd. 25.000.00
Cur Bal. 16.200.00 Dr
Advance Adv 02 25,000.00 Cr

t ________________________________
Narration * _____________________ 25,000.00

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UNIT-5 : Recording Advanced Entries and Migration to ERP 269

The above execution is an ‘Advanced Receipt from the Customer’, the tax details of this transaction can be
seen in ‘GSTR-1 ’ Report.
In order to view ‘GSTR-1’ Report,
Go to ‘Gateway of Tally’ > Display > Statutory Reports > GST > GSTR-1. The transaction is recorded under
‘Tax Liability on Advances’. The taxable value will be ? 25,000, Central Tax value will be ? 2,250, Central Tax value
will be ? 2,250 and the Total ‘Tax Amount’ will be T 4,500 payable by HSN Developers Pvt. Ltd.
Step 3: Recording of Journal Voucher to Increase the Tax Liability on Advance Receipts
The following steps should be followed to record ‘Journal Voucher’ to increase the Tax Liability on Advance
Receipts, *
(i) Go to ‘Gateway of Tally’ > Accounting Vouchers > F7: Journal Voucher.
(ii) Press F2 to change the date to 02-07-2018.
(iii) Select J: Stat Adjustment option from right side of the function keys.
(iv) Then from the J: Stat Adjustment screen, Set ‘GST’ in the field of Type of Duty/Tax.
(v) Set Nature of Transaction as ‘Increase of Tax Liability’ and Additional Details as “On Account of
Advance Receipts” as shown in the screen below,

Stat Adjustment

GST
Increase of Tax Liability

Additional Details

On Account of Advance Recei

(vi) Press Enter to Accept.

(vii) The screen return backs to Journal Voucher, select Tax on Advance in Debit field and enter amount as ? 4,500
(Total Tax Amount) and Press Enter.
(viifi Select Central Tax in Credit field and enter Amount as ? 2,250 (CGST) and Press Enter.
(ix) Select State Tax in Credit field and enter Amount as ? 2,250 (SGST) and Press Enter.
(X) Write Narration if required.
The ‘Journal Voucher’ transaction is shown in the screen below:

1
Merida-
Used for. Increase of Tax Liability
(Addft-ana! Deta>ls On Accent of Advance Recess)

Particulars Debit Cree-

Dr Tax on Advance if 4,500.00
C;'5A 4,600 00 pf
Cr State Tax 2,250.00
Cur Ba! 28,360.00 Cr
|cr Central Tax 2,250.X
Cur 8a!. 28,360.00 Cr

Narration' 4,500.00 4.500. X

9
(xi) Press Enter to Accept.

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270 THEORY AND PRACTICE OF GST

Step 4: Recording of Sales Transaction for Outward Supply of Services
The following steps should be followed to record the transactions of ‘Sales for Outward Supply of Services’:
(i) Go to ‘Gateway of Tally’ >Accounting Vouchers > F8: Sales Voucher (Make sure Sales voucher is in
I: Accounting Invoice mode).
(ii) Press F2 to change the date to 02-08-2018.
(iii) Enter the Reference No. as ZA/02.
(iv) Select ‘Zuberi Recreations Ltd.’ ledger under Party A/c Name.
(v) After selecting the party’s ledger, the Supplementary Details screen appears, press Enter and Accept the screen.
(vi) Select Installation Services ledger under Particulars field.
(vii) Enter amount as ? 37,500 and press Enter to Accept.
(viii) Select ‘Central Tax’ and ‘State Tax’ ledgers, the deducted tax amount (i.e., ? 3,375) gets automatically calculated.
(ix) Select the V: As Voucher mode, from the right side function keys, then the ‘Bill-Wise Details’ screen appears.
(x) In ‘Bill-Wise Details’ screen, select ‘Agst Ref.’ as the Type of Reference with name Adv 02 and enter the
amount as ? 25,000. Then select New Ref. as the Type of Reference with name as New 02 and the amount
gets automatically calculated as shown below,

Bill-wise Details for Zuberi Recreations Ltd.

Upto ? 44,250.00 Dr
Type of Ref Name Due Date, or Amount Dr/
Credit Days Cr
(wefi 2-Aug-2018)

Agst Ref Adv 02 25,000.00 Dr

New Ref New 02 19.250.00 FI

New Ref 9

44,250.00 Dr !

(xi) Press Enter to Save.

(xii) Press Alt+A keys to view Tax Analysis details or Tax Calculation details. Press F1: Detailed key for detailed
ta^ report.
(xiii) Press ‘Esc’ from Tax Analysis screen.
(xiv) Write ‘Narration’ if required.
(xv) Press ‘Enter’ to Save.
The ‘Sales Voucher’ transaction can be seen in the below screen:

No 9 E3JE3EI
Reference no ZA/02 Thursday

Party A?c name Zuberi Recreations Ltd.

C&rer.i balance 60.450.00 Dr
Particulars Rate per Amount

Installation Services 37.500.00

State Tax 3,375.00
Central Tax 3,375.00

Narration 44.250.00

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UNIT-5 : Recording Advanced Entries and Migration to ERP 271

The GST Details of the above execution is recorded under GSTR-1 Report. In order to view GSTR-1 report, Go
to ‘Gateway of Tally’ > Display > Statutory Reports > GST > GSTR-1.
Step 5: Recording of Journal Voucher to Reverse the Tax Liability for the Advance Receipt of the Previous
Month
The following steps should be followed to record Journal Voucher for the Advance Receipt of the Previous
Month,
(i) Go to ‘Gateway of Tally’ > Accounting Vouchers > F7: Journal Voucher.
(ii) Press F2 to change the date to 31 -08.-2018.
(iii) Select Central Tax in Debit field and enter Amount as ? 2,250 (COST) and Press Enter.
(iv) Select State Tax in Debit field and enter Amount as ? 2,250 (SGST) and Press Enter.
(v) In Credit field select ‘Tax on Advance’ and enter amount as ? 4,500..
(vi) Write Narration if required.
(vii) Press Enter to Accept.
The ‘Journal Voucher’ transaction is shown in the screen below:

MEgM nd. 5
Friday:

Particulars Debit Credit

Dr Central Tax 2,250.00
Cur flat 29,476.00 Cr
D; State Tax 2,250.00
Our 8s ' 29,475.00 Cr . ’ •
C; Tax on Advance 4,500.00:
CurBs- 0.00 Cr '

Narration 4,500.00 4,500.00;

Note: After recording the above transaction, the CGST and SGST will have Nil balances.

5.10.2 Reversal of GST on Account of Cancellation of Advance Receipt

Q24. Explain Reversal of GST on Account of Cancellation of Advance Receipt.
Answer :

In case when advance receipt is to be cancelled in the same month, following points are to be considered,
(i) If Advance Receipt Voucher is recorded and Journal Voucher is recorded to raise the liability.
f-
(ii) If the transaction is cancelled, then there is a need to exclude the advance receipt voucher from the GSTR-1 report.
OR
There is a need to record a Journal Voucher to reverse the tax liability to maximum extent for which'the transaction
is cancelled.
To ‘Exclude the Advance Receipts Voucher’ from GSTR-1 Report,
Go to ‘Gateway of Tally’ > Display > Statutory Reports > GST > GSTR-1. Select ‘Included in Returns’
and press Enter. Select the Receipt Voucher and Click X: Exclude Vouchers (Right Side Function Keys). Then the
following screen appears,

Do you want to
exclude this voucher?
Yes- a? No
Click Yes to option ‘Do You Want to Exclude this Voucher?’.
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272 THEORY AND PRACTICE OF GST

If Cancellation of Advance Receipt transaction in the next tax period and if the Advance Receipt Voucher, Journal
Voucher is recorded to raise the liability, and then if the transaction is cancelled in the next tax period, then need to record
a Journal Voucher to Reverse the Tax Liability to the extent to which the transaction is cancelled.
To Reverse the Tax Liability on Cancellation of Advance Receipt transactions, following points should
be followed,

(i) Go to ‘Gateway of Tally’ > Accounting Vouchers > F7: Journal Voucher.

(ii) Press F2 to change the date to 31-08-2018.

(iii) Select J: Stat Adjustment option from right side of the function keys.

(iv) Then from the J: Stat Adjustment screen, Set ‘GST’ in the field of Type of Duty/Tax.

(v) Set Nature of Transaction as ‘Decrease of Tax Liability’ and Additional Details as “Cancellation of Advance
Receipts” as shown in the screen below,

Stat Adjustment
X.

Type of duty/tax
Mature of adjustment

Additional Details

Additional Details Cancellation of Advance Receip

List of Nature of Adjustments

(vi) Press Enter to Accept.

(vii) The screen return backs to Journal Voucher, Select Central Tax in Debit field and enter Amount as ? 2,250
(CGST) and Press Enter.
(viii) Select State Tax in Debit field and enter Amount as ? 2,250 (SGST) and Press Enter.
(ix) Select Tax on Advance in Credit field and enter amount as ? 4,500 (Total Tax Amount) and Press Enter.

(x) Wrijte Narration if required.

(xi) Press Enter to Accept.

The ‘Journal Voucher’ transaction is shown in the screen below:

■■ESEBBHNo. 6.
JsrrDecrease ci Tax Liability
-

Particulars Debit Credit [

Dr Central Tax 2,250.00

GurBai. 27,!!SJ)0Cr
fir State Tax 2.250.00

Cur Sac 27,225.000-

fir Tax on Advance 4,500.00:
I , Cur Ba' 4,500.00 Cr

4.500.00 4,500.00 J
: Narration

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UNIT-5 : Recording Advanced Entries and Migration to ERP 273

5.11 GENERATING GSTR-1 REPORT IN TALLY.ERP 9

Q25. Explain the concept of generating GSTR-1 report in Tally.ERP 9.
Answer :
Generating GSTR-1 Report in Tally.ERP 9
Goods and Services Tax Return-1 (GSTR-1) refers to the monthly return which may consist of all type of outward
supplies. According to GST law, the GSTR-1 should be filed by a taxable person who is registered under GST. The format
of GSTR-1 form is very standardised and available in prescribed format. The form of GSTR-1 consist of multiple tables
which are used for displaying different type of outward supplies.
In Tally.ERP 9, the GSTR-1 can be viewed as a report which includes the details of tax computation and details of
outward supplies with the chances to resolve the exception before exporting the GSTR-1 return. The GSTR-1 report also
enables to update the status of every return transaction depending upon the acceptance and reconciliation status of the
transaction on GSTN portal by using the option of status reconciliation.

Steps of Generating GSTR-1 Report in Tally.ERP 9

To generate GSTR-1 rep'ort, the given steps should be followed,

1. Go to Gateway of Tally > Display > Statutory Reports > GST.

2. Select GSTR-1, Click F:2 Period to change the period from 01-07-2018 to 31-08-2018.
3. Click Alt+V: Default View.

The GSTR-1 Default View screen appears as shown below,

GSTR-1 1-MaWto31,Au9-2()18

Returns Summary

falSisd«rstoss
■ ■ S:
M retort i» retans Pi
»infametw be resaied} 4

Particulars Taxable Value Integrated Tax Central Tax State Tax Amount Cess Amount Total Tax Amount
Amount Amount

Outward Supplies

Local Sales «.92.5W.M 49.T25.W 49.725.00 99.459.90

Taxable WWW 49.KSM SUSMO

Exempted UOMM

Inter State Sales ' 1.90.W.W

Exempted

Less: period Artatce Tar Paid 25.0W.W 2.2W.W IM 4.W0W

Totsl Outward Supplies____ W.S1B 4T475W 47475.00 94.WM

Addition to this, in Tally. ERP 9 with the help of GSTR-1 report the following activities can be performed,

1. In order to view the GSTR-1 report in table format, click Alt + V (Table-wise view).
This format will gives the details of B2B, B2C, Nil Rated, Export, Advance etc.

2. In order to record the Stat Adjustment entry in Journal Voucher, click Alt + J (Stat Adjustment).

3. In order to mark the status of each transaction base on online status i.e., Status Reconciliation click Alt + U.

4. In order to export the GSTR-1 return in the required excel format for a given period click Ctrl + E (Return).

5. In order to see the summary of HSN/SAC code of all the stock item, click Alt + N (HSN/SAC Summary).
6. In order to see the details of screen list of voucher while solving the exception click Ctrl + A.

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274 THEORY AND PRACTICE OF GST

5.12 GENERATING GSTR-2 REPORT IN TALLY. ERP 9

126. Explain the concept of generating GSTR-2 report in Tally.ERP 9.

Answer :

GSTR-2 is the monthly return report which includes all the details of inward supplies. According to GST law, the
3STR-2 should be filed by a taxable person who is registered under GST. The format of GSTR-2 form is very standardised
nd available in prescribed format. The form of GSTR-2 consist of multiple tables which are used for displaying different
- pe of outward supplies.

In Tally.ERP 9, the GSTR-2 can be viewed as a report which includes the details of tax computation and details of
rtward supplies with the chances to resolve the exception before exporting the GSTR-2 return. The GSTR-2 report also
enables to update the status of every return transaction depending upon the acceptance and reconciliation status of the
Transaction on GSTN portal by using the option of status reconciliation.

Steps of Generating GSTR-2 Report in Tally.ERP 9

To generate GSTR-2 report, the given steps should be followed,

Go to Gateway of Tally > Display > Statutory Reports > GST.

2. Select GSTR-2.

3. Click Alt+V: Default View.

The GSTR-2 Default View screen as shown below,

GSTR-2 1-Aug.2018to31Aug-2<318

Returns Summary
1 Total numbs? dvcmcben for me serbd 14
hdutled in retains 3]
Hot reteatt fc returns 11
hesmpteteWsBSSh m information fto be rssrtredj oj
Particulars Taxable Value Integrated Tax Central Tax State Tax Amount Cess Amount Total Tax Amount
Amount Amount

Inward Supplies

Reverse Charge Supplies 2.7W0.W 45.000,00 1.800.00 1.800.00 <600.00

Add/Use: GST Adjustments 1.W0.00 1.809.00 3,600.00

Total Inward Supplies 2JO.O0W 45.000.00 3.600.00 3.600.00 52.200.00

Tax liability

Reverse Charge Supplies 2.70.0W.® 45.000.00 ' imoo 1.800.00 48,600,00

Total Tax Liability 2.70.000.00 45,000.00 1.M0A0 1.800.00 <600,00

5.13 INPUT TAX CREDIT SET OFF

Q27. Write about Input Tax Credit (ITC) set off.

Answer : Model Paper-Ill, Q13(b)

Input Tax Credit Set Off

According to GST law, the liability to pay of registered persons or dealers can be set off against the Input Tax Credit
(ITC) which they are entitled to avail. The ITC can be avail based on the nature of tax i.e., on every transaction within a
state, the rate of central and state tax will be applicable and for interstate transactions integrated tax is applicable. The ITC
can be set off against each of the rates or components of such taxes is prescribed by GST law in the following manner,
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UNIT-5 : Recording Advanced Entries and Migration to ERP 275
j S.No. Input Tax Credit (ITC) Input Tax Credit (ITC) Set Off Against Liability
1. Central Tax Central and integrated tax.
2. State or Union Territory Tax State or Union Territory tax and integrated tax.
3. Integrated Tax Central, State and Integrated tax.

Addition to this, tax should be paid to the Govt, if the ITC amount is less than the liability, whereas, it will be carry
forward to next period if the ITC amount is more than liability. However, once the tax liability is adjusted against the input
credit, then the remaining tax liability need to be paid to the government.

With the help of following example, the set off and GST tax payment is explained.

Example »
Accounting of GST Tax Payment to the Department from the following details:
HSN Developers Pvt. Ltd. made the payment of following taxes to the Government,

Date Type of Tax Tax Amount (?)

31-08-2018 Central Tax 15,750
31-08-2018 State Tax 15,750
Solution :
For recording the given transactions, ensure that all necessary Accounting Masters are created in Tally.ERP 9:
Step 1: Recording of GST Tax Payment Transactions

The following steps should be followed to record the GST Tax Payment Transactions:

(i) Go to ‘Gateway of Tally’ > Accounting Vouchers > F5: Payment Voucher.

(ii) Press F2 to change the date to 01 -07-2018.

(iii) Press ‘Alt+S: Stat Payment’ to get Stat Payment Details screen.
(iv) Enter the following details,

Tax Type as ‘GST’.

Period from as ‘01-07-2018 to 31-07-2018’.

Payment Type as Regular, as shown in the screen (Statutory Payment Details) below:
Stattitoiy Payment

Tax Type GST

31 Jul 2018
Paysawit Type Rvguiar

(v) Press Enter to Accept.

(vi) Select Kotak Mahindra Bank in Account field.

(vii) Select Central Tax in Particulars field and enter Amount as ? 15,750 (COST) and Press Enter.

(viii) Select State Tax in Particulars field and enter Amount as ? 15,750 (SGST) and Press Enter.
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276 THEORY AND PRACTICE OF GST

The ‘Payment Voucher’ transaction is shown in the screen below:

(ix) In the ‘Provide GST Details’ option Set it as ‘Yes’ as shown in the above screen.

(x) Then the Bank Details screen appears. Enter the necessary details as shown in the below screen,

Bank Details

Mode of payment NEFT/RTGS

Name of the Bank Kotak Mahindra Bank
Common Portal Identiication HumbertCPIJj 7654321
Challan Identification flumberfCIN) 12345
BRNAJTR KOTB563271
Payment date 014)7 2018

(xi) Press Enter to Accept.

(xii) In the Bank Allocation Details, enter the necessary details like, Transaction Type, Account Number, IFSC Code,
Bank etc and save the screen.

(xiii) Write Narration if required.

(xiv) Press Enter to Accept the Voucher.

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UNIT-5 : Recording Advanced Entries and Migration to ERP 277
The ‘Completed Payment Voucher’ transaction is shown in the screen below:

Q28. Write in detail about cancellation of challans.

Answer :
Challan Cancellation
In Challan Reconciliation, payment details can be defined. In case, if any details are left while recording the payment,
vouchers, the alterations can be made in the voucher screen.
To Reconcile the Challan, follow the given steps,

(i) Go,to Gateway of Tally’ > Display > Statutory Reports > GST >From GST Reports select “Challan
Reconciliation”.
The ‘Challan Reconciliation’ screen appears as shown below:
MB
List of Payment Vouchers
i
14^2018 to 3Uug-2fl18

Bate Particulars Veh Type Veh No. Type of Payment Period Type of Mode of payment Bank Name Common Portal Amount
Tax Payment Wemi&atai
Payment NumberjCPffi)
Fro® To

5 MOW ... ™
Z3ZZS “3$ nrera 2 GST l-Juf-2018 310*2018 t
HEFTRTGS Kdak 3^** WMW 315W«
24»J«18 Payment GST 31 Aug-2018 UEFTRTGS Kstak Mahndra Batik 8S» 3.60000:

SslrBsB

(ii) Click Alt+S: Set Details to get the Statutory Payment sub-screen.

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278 THEORY AND PRACTICE OF GST

The Statutory Payment screen appears. Enter the necessary details as shown in the below screen,

Statutory Payment
Period From 1-Jul-2018 To 31-Jul-2018
Mode of payment NEFT/RTGS
Bank Name Kotak Mahindra Bank
Common Portal Identification Htmibe«(CPN). 7654321
Challan Identification Number(CIN) 12345
BRN/UTR KOTB563271
Payment date 1-Jtil-2018

Accept ?

Yes Ho

(iii) Press Enter to Accept the Screen.

Note: In case if any details like period, mode of payment, payment date etc is missing at the time of recording tax payment,
then the missing entries can be defined in the ‘Statutory Payment’ above screen.
5.15 EXPORTING GSTR-1 RETURN AND UPLOADING IN GST PORTAL
Q29. Explain exporting GSTR-1 return and Uploading in GST portal.
Answer:
In order to export GSTR-1 in excel format it must be ensured that the exceptions which are coming under the heading
Incomplete/Mismatch in Information to be resolved. Therefore, GSTR-1 can be exported in required excel format for any
given period.
In order to export GSTR-1 Return, in the required M.S. Excel format, given steps should be followed,
(i) Go to ‘Gateway of Tally’ >Display > Statutory Reports > GST > GSTR-1.
(ii) Click F:2 Period and change the period from 01-07-2018 to 31-08-2018.

Note: Note that there are no exceptions under the head “Incomplete/Mismatch in Information (to be solved)” in
the above screen . Hence, it is not required to solve the exception.
(iii) Click Ctrl+E: e-Returns to get the Statutory Payment sub-screen.

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UNIT-5 : Recording Advanced Entries and Migration to ERP 279
The ‘Exporting GSTR-1 Report’ appears as shown in the screen below:

Exporting GSTR-1

Language Default (All Languages)

Format Excel (Sersass^eet)
Export Location c:\Tally.ERP9\daUi
Output Fite Name GSTR-1 36AAAAA12MA1Z6 August 2018-19.xls
Open Exported File ? Yes

•
Accept ?
From date 1-7-2018
To date 31-8-2018
Yes r- No

(iv) Enter the details as shown in the above screen.

(v) Press Enter to Accept the screen.

(vii) In the above screen we will get all the Outward Supplies Transactions Details falling underdifferent heads like,
B2B, B2C, Export Invoices etc.

(viii) The exported GSTR-1 file is in the prescribed format provided as per the departments.
(ix) The executed can also be imported to the offline utility mode.

Activity

Generate GSTR-2 Return in a similar way.

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280 THEORY AND PRACTICE OF GST

5.16 MIGRATION TO ERP

Q30. Explain the process of migration to Tally.ERP 9 from older versions of Tally with an example.
Answer :
Migrating to Tally.ERP 9 Release 6.0 from older versions is a simple process. Tally.ERP 9 takes the backup of
the company data in the location specified by the user. While upgrading to newer version the following figure shows the
migration and getting started with GST process which involves from taking backup of data to recording of invoices,

Figure: Migration to Tally.ERP 9 Release 6.0 and Getting Started with GST

Example
Sagar traders deals in computer accessories and using Tally.ERP 9 release 5.0 to maintain their books
of accounts, to implement GST and to have GST-complaint invoices, the company decided to shift to
Tally.ERP 9 release 6.0. Show the steps for migrating of Sagar traders data to Tally. ERP 9 Release 6.0.
Solution :
The steps for migrating the data in Tally.ERP 9 Release 6.0 are as follows,
1. Download Tally.ERP 9 Release 6.0 from www.tallysolutions.com/download
2. Install Tally.ERP 9 Release 6.0
3. Open the Tally.Exe
4. Click ‘F1: Select Company’ and load the required company by clicking on it.
5. The ‘Select Company’ screen appears as shown below,

We need to convert your data to open it in this version

of Tally.ERP 9.
Your current data will be automatically backed up.

Begin data conversion?

Yes . No

6. Press ‘Enter’ or click on ‘Yes’ to get ‘Backup Companies on Disk screen as shown below,

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UNIT-5 : Recording Advanced Entries and Migration to ERP 281

Backup Details

Company being backed up Tally School

File path for backup : D:\TallyDataBackup Accept ?
(If required, you can type a different file path for backup.)
Yes or No

7. Enter the file path for backup and press ‘Enter’ to backup the data.
8. The ‘Gateway of Tally’ screen appears as the company is migrated to Tally.ERP 9 Release 6.0.
5.16.1 Activate Goods and Services Tax (GST) in ERP
Q31. Explain the activation of Goods and Services Tax (GST) in Tally.ERP 9.
Answer :
For answer refer Unit-II, Page No. 30, Q.No. 7.
5.16.2 Setup GST Rates _
Q32. Explain setting up GST rates in Tally.ERP 9.
Answer:
GST rates can be defined or set up in Tally.ERP 9 at different levels i.e., company level, stock group level, stock
item level, ledger group level and ledger level. GST details can also be override at transactional level.
Following are the steps required to setup GST rates for stock groups and stock items,
(i) Go to Gateway of Tally > Display > Statutory Reports > GST
The ‘GST Reports’ menu appears as shown below,
Gateway of Taffy....
Display Mem....
Statutory Reports....
GST Reports

GSTR-t
GSTR-2

Challan Reconciliation

GST Rate Setup

Update Party GSTIN

Quit

(ii) Select ‘GST Rate Setup’

The ‘GST Rate Setup’ screen appears as shown below,

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282 THEORY AND PRACTICE OF GST

(iii) Click on the required ‘Stock Group’
(iv) Click ‘S: Set Rate’
(v) The GST Details’ screen appears as shown below,
GST Details Sagar Tratiers

Tax Rate Details

HSN/SAC Details

Description Keyboard
HSN/SAC 84716040

Is non-GST goods ? No

Tax Details
Calculation type On Value
Taxability Taxable
Is reverse charge applicable ? No
Is Ineligible for input credit ? No
Tax Type Valuation Type Rate
Integrated Tax Based on Value 5 %
Central Tax Based on Value 2.50 %
State Tax Based on Value 2.50 %
Cess Based on Value Mo|%

(vi) Press Ctrl+A to accept.

(vii) Similarly, define the GST Details for other groups as given below,

Item Description HSN/SAC Integrated Tax

Mouse Mouse 84717020 5%
Printer Printer 84433240 18%
Scanner Scanner 84716050 5%

After setting up GST Rates for remaining groups, the screen appears as shown below,
1 GST Rate Setup Ctrl + M □!
Sagar Traders

Stock Group J Primary

Particulars Applicable HSN/SAC Taxability Integrated Central State Cess

From Tax Tax Tax

I Key boa rd • ■ 1JU12O17 84716040 Taxable 5% 2.50% 2.50%

Mouse 1 Jul-2017 84717020 Taxable 5% 2.50% 2.50%
Printer 1-Jul-2017 84433240 Taxable 18% 9% 9%
Scanner 1Jul-2017 84716050 Taxable 5% 2.50% 2.50%

Note:
‘ Stock group has items with mulitple tax rates A single tax rate cannot be set for this stock group.
GST rate details in brackets are derived from company or stock-group, as configured.

5.16.3 Update Masters

Q33. Write about updating Masters in Tally.ERP 9.
Answer:
GST rates can be updated for stock item and stock groups.
(a) Updating GST Details in Stock Item
The steps for updating stock item are as follows,

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UNIT-5 : Recording Advanced Entries and Migration to ERP 283

(i) Go to Gateway of Tally > Inventory Info. > Stock Items > Alter
(ii) After selecting required item from the ‘List of Stock Items’, ‘Stock Item Alteration Screen’ appears as shown
below,

(iii) Set ‘Yes’ to ‘Set/alter GST Details’.

(iv) The ‘GST Details’ screen appears as shown below,

| GST Details Sagar Traders ||

Tax Rate Details

HSN/SAC Details

Description B HP Printer P1007

HSN/SAC 84433240

Is non-GST goods ? No

Tax Details
(From 1-M-2017)
Calculation type On Value
Taxability Taxable
Is reverse charge applicable ? No
Is ineligible for input credit ? No

Tax Type Valuation Type Rate

Integrated Tax Based on Value 18 %
Central Tax. Based on Value 9 %
State Tax Based on Value 9 %
Cess Based on Value 0 %

Enter the details as shown above.

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284 THEORY AND PRACTICE OF GST

(v) Press Ctrl + A to save.
(vi) Select Goods under ‘Type of Supply’.
(vii) The ‘Stock Item Alteration’ appears as shown below,

Press ‘Enter’ to accept.

(b) Updating GST Details in Stock Group
(i) Go to Gateway of Tally > Inventory Info. > Stock Groups Alter
(ii) After selecting required group, from ‘List of Stock Groups’ the ‘Stock Group Alteration’ appears, as shown
belpw,

(iii) Set ‘Yes’ to ‘Set/alter GST Details’

(iv) The ‘GST Deatils’ screen appears and any required changes can be defined in it.

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UNIT-5 : Recording Advanced Entries and Migration to ERP 285
(v) Press Ctrl + A to update changes in ‘GST Details’ screen.

The ‘Stock Group Alteration’ screen appears as shown below,

(vi) Press ‘Enter’ to accept.

(c) Updating Ledgers

Purchase and sales ledgers need to be alter inorder to define GST details. The alteration of these ledgers is required
when most of the items sold by the company has same tax rate.

Following are the steps for defining GST Details in Sales Ledgers,

(i) Go to Gateway of Tally > Accounts Info. > Ledgers > Alter

(ii) In ‘Ledger Alteration’ screen set ‘Yes’ to ‘Set/alter GST Details’

(iii) The ‘GST Details’ screen appears as shown below,

| GST Details
Sauar Traders

Tax Rate Details

HSN/SAC Details

Description H Sales.
HSN/SAC

Is non-GST goods ? No
Nature of transaction Sales Taxable
&
Tax Details

Taxability Taxable
Is reverse charge applicable ? No

Tax Type Valuation Type Rate

Integrated Tax Based on Value 18 %
Central Tax Based on Value 9 %
State Tax Based on Value 9 %
Cess Based on Value 0 %

Enter the details as shown above.

(iv) Press Ctrl + A to save.

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386 THEORY AND PRACTICE OF GST

(v) The ‘Ledger Alteration’ screen appears as shown below,

(vi) Press ‘Enter’ to accept.

Similarly, the GST details can be defined in the Purchase Ledger.

S.164 Update Party GSTIN/UIN

Q34. Write about updating party GSTIN/UIN in the Tally.ERP 9.
Answer:
The GSTIN/UIN of all registered dealers are required to be maintained by a business organization in order to file
GST compliant returns. Therefore, the party ledgers which are already created is required to be updated with the GSTIN/
UIN. Tally^ERP 9 enables businesses to update the GSTIN/UIN through its ‘update party GSTIN/UIN’ report. The ‘update
party GSTIN/UIN’ report facilitates in updating multiple ledgers. To import GSTINs for various parties in one shot, ‘Import
Party GSTIN’ tool can be used.

Following are the steps required for updating party GSTIN/UIN,

(i) Go to Gateway of Tally > Display > Statutory Reports > GST > Update Party GSTIN/UIN

(ii) The following screen appears,

t Group Sag ar Trade rs

Name of Group J All Items |

Name of Ledger J All Items

(iii) Enter the details as shown above.

(iv) The ‘Update Party GSTIN/UIN’ screen appears as shown below,

SIA PUBLISHERS AND DISTRIBUTORS PVT. LTD. ______

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UNIT-5 : Recording Advanced Entries and Migration to ERP 287
Update Party GSTIN/UIfK Sagar Traders______________________________________________________________________________ Ctrl T H

Parties with Pending Details

SI. Ho Particulars Country State Registration Type GSTIN/UIN

1 Metro Traders India Telangana

2 Orient Computers India Telangana
3
4 Reddy Computers India Telangana
5 Sam Traders India Telangana J Unknown
Composition
Consumer

Unregistered

....... ~....... ■.......... 1

(v) To update the GSTIN/UIN of the party, Enter the GSTIN/UIN of the party in the ‘GSTIN/UIN’field as shown below.
The ‘Updated Party GSTIN/UIN’ screen appears as shown below,

Parties with Pending Details

SI. No Particulars Country State Registration Type GSTIN/UIN

1 Metro Traders India Telangana Regular 36AAAAA1999A1Z1

2 Orient Computers India Telangana Regular 36BBBBB1888A1Z2
3 Raja Enterprises India Telangana Regular 36CCCCC1777A1Z3
4 Reddy Computers India Telangana Regular 36DDDDD1666A1Z4
5 Sam Traders India Telangana Regular 36EEEEE1555A1Z5

Accept ?

i Tes r. Ho

(vi) Press ‘Enter’ to accept.

5.16.5 CREATION OF GST DUTY LEDGERS

Q35. Write about the creation of GST duty ledgers in Tally.ERP 9.
Answer :
The GST duty ledgers used in Tally.ERP 9 are,
1. Integrated Tax Ledger
For answer refer Unit-1, Page No. 6 , Q.No. 10, Topic: Integrated Goods and Service Tax (IGST).
2. Central Tax Ledger
For answer refer Unit-1, Page No. 6 , Q.No. 10, Topic: Central Goods and Service Tax (CGST).
3. State Tax Ledger
For answer refer Unit-1, Page No. 6 , Q.No. 10, Topic: State Goods and Service Tax (SGST).

______ SIA PUBLISHERS AND DISTRIBUTORS PVT. LTD.

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288 THEORY AND PRACTICE OF GST

INTERNAL ASSESSMENT
I. Multiple Choice
1. When various services are availed from single supplier it comes under_________ management.

(a) Project (b) Event

(c) Company (d) None of the Above

2. In multiple supplies, the supplier will issue a____________ invoice. [ J

(a) Single (b) Double

(c) Tax (d) None of the above

3. ________ is the initial payment made by purchaser to the supplier. [ J

(a) Full payment (b) Partial Payment

(c) No Payment (d) None of the above

4. Additional expenses includes___________ . [ 1

(a) Friegh (b) Transport

(c) Packaging (d) All the above

5. Value of taxable supply is the value of_______ . [ ]

(a) Supply of goods (b) Supply of services

(c) Supply to raw material (d) None of the above

6. Transactions conducted between a company and consumers is referred as____ _____ . [ ]

(a) Business to Business (b) Business to Manufacturer

(c) Business to Retailer (d) Business to Consumer

7. The date on which the invoice is used is known as________ [ ]

(a) Date of Supply (b) Date of Invoice

£ (c) Date of Delivery (d) None of the above

8. _________ is the time at which tax has to be paid. [ ]

(a) Time of supply (b) Time of delivery

(c) Time of order (d) None of the above

9. There are ______ scenarios is supply of services to an un-registered dealer. [ ]

(a) Two (b) Three

(c) Four (d) Five

10. In the process of supply of taxable services to a registered person, the registered location of recipient will be
the [ ]
(a) Place of supply (b) Area of supply

(c) Order of supply (d) Invoice of supply

SIA PUBLISHERS AND DISTRIBUTORS PVT. LTD. ......... ....

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UNIT-5 : Recording Advanced Entries and Migration to ERP 289
II. Fill in the Blanks
1• _________ of GST law provided the explanation and determination criterias for the type of supply of services.
2. B2C stands for________ .
3. B2B stands for_________ .

4. When supply of services provided to an unregistered dealer whose location is in different states, then it comes
under unregistered dealer to_________ state.
5. Exempted services from GST are termed as ___________ .
6. _________ are exempted from tax.
7. In _________ mechanism buyer has to pay tax.
8. GSTR stands for_________ .
9. ERP stands for__________ .

10. In the migration process ________ takes the backup of the company data in the location specified by the user.

KEY
I. Multiple Choice
1. (b)
2. (a)
3. (b)
4. (d)
5. (a)
6. (d)
7. (b)
8. (a)
9. (a)
10. (a)

11. Fill-in the Blanks

1. Schedule-II
2. Business to Consumer
3. Business to Business
4. Different
5. Zero Rated Services
6. Exports
„ 7. Reverse Charge

8. Goods and Services Tax Return

9. Enterprise Resource Planning
10. Tally.ERP 9.

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290 - e>? . c THEORY AND PRACTICE OF GST

III. Very Short Questions and Answers

Q1. What is Recording of Advanced Entries?

Answer :

The ‘Recording of Advanced Entries’ means recording of various types of business transactions, multiple services in
single voucher, recording of additional expenses of GST, export of services, transactions of sales services by professionals
etc. It includes all those entries or transactions which were non recorded or may be advanced in nature in Tally.ERP 9.

Q2. Write about Accounting of Multiple Services in a Single Supply.

Answer :

In the daily business activities a company deals with purchasing of goods and services from one or various
distribute? However, in some cases, the company avails various supplies from a single supplier i.e purchases of multiple
services from single supplier. During such supplies or transactions, the supplier will issue a single invoice including taxes
for the various services provided by him.

Q3. What is Partial Payment?

Answer :

In the day-to-day business activities a company deals with purchasing of goods and services. The payments of
purchase of services can be paid fully or partially depending upon the terms and conditions. Therefore, the partial payment
is the initial payment or half payment made by the Purchaser to the supplier.

Q4. Briefly describe Business to Consumers.

Answer :

Business to Consumers (B2C) refers to the transactions conducted directly between a company and consumers who
are the end-users of its products or services. The B2C supply of services is different from Business-to-Business (B2B)
process, as in B2B business transactions will be in between two or more businesses. Whereas, under B2C process the
companies deal directly with consumers because of which they are called as B2C companies. While recording of B2C
transactions in Tally.ERP 9 there is no need of entering party’s registration details.

Q5. What do you understand by Migrating to ERP?

Answer :
Migrating to Tally.ERP 9 Release 6.0 from older versions is a simple process. Tally.ERP 9 takes the backup of the
company data in the location specified by the user.

5IA PUBLISHERS AND DISTRIBUTORS PVT. BTO.

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Important Questions
Q2. What do you mean by inter state supply of
Unit-1 goods?
Answer : Important Question

SHORT QUESTIONS _____ For answer refer Unit-II, Page No. 28, Q.No. 3.
Q3. Write about return of goods.
Q1. State the benefits of GST.
Answer : Important Question
Answer : Important Question
For answer refer Unit-II, Page No. 28, Q.No. 4.
For answer refer Unit-I, Page No. 2, Q.No. 2.
ESSAY QUESTIONS
Q2. What are the determinants of place of supply Q1. Briefly discuss about getting started with GST.
of goods? Discuss the various steps involved in enabling
Answer : Important Question GST and defining Tax details.

_____ For answer refer Unit-I, Page No. 2, Q.No. 3._____ Answer : Important Question

Q3. Explain the following under GST, For answer refer Unit-II, Page No. 30, Q.No. 7.
(i) Debit note. Q2. What is Intrastate Supply of Goods? Explain
(ii) Credit note. Intrastate Inward Supply with an example.
Answer : Important Question
Answer : Important Question
For answer refer Unit-II, Page No, 34, Q.No. 9.
For answer refer Unit-I, Page No. 3, Q.No. 4,
Q3. Define Interstate Supply. Explain Interstate
ESSAY QUESTIONS
Inward Supply with an example.
Q1. Define GST. Explain its origin and important
Answer : Important Question
concepts.
For answer refer Unit-II, Page No. 48, Q.No. 11.
Answer : Important Question
Q4. What is ‘Return of Goods’? What are the various
For answer refer Unit-I, Page No. 5, Q.No. 9. steps involved in activating debit notes and
Q2. Explain the concept of registration under GST. credit notes?
Answer : Important Question Answer : Important Question

For answer refer Unit-I, Page No. 7, Q.No. 12. For answer refer Unit-II, Page No. 57, Q.No. 13.

Q3. Explain the transition to GST. Unit-3

Answer : Important Question

r~ For answer refer Unit-I, Page No. 12, Q.No. 18.

SHORT QUESTIONS
Q4. Write in detail about Invoicing in GST.
Q1. What do you mean by composite and
Answer : Important Question unregistered dealers?
For answer refer Unit-I, Page No. 13, Q.No. 19. Answer : Important Question

For answer refer Unit-Ill, Page No. 84, Q.No. 1.

Unit-Z Q2. What are Exports and Imports?
Answer : Important Question

SHORT QUESTIONS For answer refer Unit-Ill, Page No. 84, Q.No. 2.
Q1. What do you mean by intra state supply of Q3. What do you understand by SEZ sales? What
goods? are its types?
Answer : Important Question Answer : Important Question

For answer refer Unit-II, Page No. 28, Q.No. 2. For answer refer Unit-Ill, Page No. 84, Q.No. 3.
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IQ.2 THEORY AND PRACTICE OF GST

ESSAY QUESTIONS Q3. Write the steps involved in transferring Input
Q1. Discuss in detail about the Accounting of GST Tax Credit to GST and explain it with a suitable
Transactions. example.
I
Answer : Important Question
Answer : Important Question
For answer refer Unit-IV, Page No. 161, Q.No. 9.
For answer refer Unit-Ill, Page No. 87, Q.No. 8.
Q4. What is Intra-State Supply of Services?
Q2. Define Unregistered Dealers (URDs). Explain
Explain Intra-State Inward Supply of Services
briefly recording of purchases made from
with an example.
unregistered dealers with an example.
Answer : Important Question
Answer : Important Question
_____ For answer refer Unit-IV, Page No. 165, Q.No. 10.
For answer refer Unit-Ill, Page No. 91, Q.No. 10.
Q3. Define Exports. What are the various types of
Unit-5
exports and their Tax Applicability?
Answer : Important Question

For answer refer Unit-Ill, Page No. 98, Q.No. 11. SHORT QUESTIONS
Q1. Write about recording of advanced entries and
Q4. Discuss the applicability of GST for advance
accounting of multiple services in a single
receipts and payments. Explain accounting of supply.
advance receipt and sales invoice in the same Answer : Important Question
month.
_____ For answer refer Unit-V, Page No. 204, Q.No. 1.
Answer : Important Question Q2. What is Partial Payment made to the Supplier
_____ For answer refer Unit-Ill, Page No. 117, Q.No. 18. and outward supply of services?
Answer : Important Question
Unit-4 _____ For answer refer Unit-V, Page No. 204, Q.No. 2.
Q3. What do you mean by supply of services and
Business to Consumers supply of services?
SHORT QUESTIONS Answer : Important Question

Q1. Define Services. _____ For answer refer Unit-V, Page No. 204, Q.No. 3.
Answer : Important Question
ESSAY QUESTIONS
Q1. Explain Accounting of Multiple Services in a
For answer refer Unit-IV, Page No. 156, Q.No. 1.
Single Supply with an example.
Q2. What do you mean by intra state supply of
Answer : Important Question
services?
_____ For answer refer Unit-V, Page No. 209, Q.No. 9.
Answer : Important Question
Q2. Write a note on transactions of recording of
Fo/answer refer Unit-IV, Page No. 156, Q.No. 3.
partial payments made to the supplier? Explain
Q3. Write about cancellation of services.
with an example.
Answer : Important Question
Answer : Important Question
For answer refer Unit-IV, Page No. 157, Q.No. 5.
_____ For answer refer Unit-V, Page No. 217, Q.No. 10.
ESSAY QUESTIONS
Q3. What do you mean by Time of Supply of
Q1. What do you mean by services? Explain briefly
Services? What are its Components? Explain
about the determination of supply of services
and place of supply of services. with an illustration.
Answer : Important Question Answer : Important Question

For answer refer Unit-IV, Page No. 158, Q.No. 7. _____ For answer refer Unit-V, Page No. 228, Q.No. 13,
Q2. Write about the steps involved in enabling GST Q4. Write a note on Exempt Supply of Services
and defining tax details of services. under GST. Explain with an example.
Answer : Important Question Answer : Important Question

For answer refer Unit-IV, Page No. 158, Q.No. 8. For answer refer Unit-V, Page No. 239, Q.No. 17.

5IA PUBLISHERS AND DISTRIBUTORS PVT. LTD.

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MODELI-1
FACULTY OF COMMERCE PAPER 1
B.Com. (CBCS) lll-Year Vl-Semester Examination
THEORY AND PRACTICE OF GST
(Common Paper for All Streams)
Time: 3 Hours Max. Marks: 80

PART - A ( 5 x 4 = 20 Marks )
Note : Answer any Five of the following questions in not exceeding 20 lines each

1. State the benefits of GST. (Unit-I, Page No. 2,02)

2. What do you mean by intra state supply of goods? (Unit-ll, Page No. 28,02)
3. What do you mean by composite and unregistered dealers? (Unit-Ill, Page No. 84, Q1)
4. Write about cancellation of services. (Unit-IV, Page No. 157, Q5)
5. Write about recording of advanced entries and accounting of multiple services
in a single supply. (Unit-V, Page No. 204, Q1)
6. What do you mean by supply of services and Business to Consumers
supply of services? (Unit-V, Page No. 204, Q3)
7. Write a short note on hierarchy of applying tax details. (Unit-ll, Page No. 29, Q5)
8. What are Exports and Imports? (Unit-Ill, Page No. 84,02)

PART - B ( 5 x 12 = 60 Marks )
Note: Answer the following questions in not exceeding four pages each.

9. (a) Define GST. Explain its origin and important concepts. (Unit-I, Page No. 5, Q9)
OR
(b) Write in detail about Invoicing in GST. (Unit-I, Page No. 13, Q19)
10. (a) Briefly discuss about getting started with GST. Discuss the various steps
involved in enabling GST and defining Tax details. (Unit-ll, Page No. 30, Q7)
OR
f?(b) What is ‘Return of Goods’? What are the various steps involved in activating
debit notes and credit notes? (Unit-ll, Page No. 57, Q13)
•11. (a) Discuss in detail about the Accounting of GST Transactions. (Unit-Ill, Page No. 87, Q8)
OR
(b) Define Exports. What are the various types of exports and their Tax Applicability? (Unit-Ill, Page No. 98, Q11)
12. (a) What do you mean by services? Explain briefly about the determination of
supply of services and place of supply of services. (Unit-IV, Page No. 158, Q7)
OR
(b) Write about the steps involved in enabling GST and defining tax
details of services. (Unit-IV, Page No. 158, Q8)
13. (a) Explain Accounting of Multiple Services in a Single Supply with an example. (Unit-V, Page No. 209, Q9)
OR
(b) Write a note on transactions of recording of partial payments made to
the supplier? Explain with an example.'3;? > \ ' (Unit-V, Page No. 217, Q10)
-------- —. .............. S1A PUBLISHERS AND DISTRIBUTORSJWT. LTD.

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THEORY AND PRACTICE OF GST

MODEL A
FACULTY OF COMMERCE PAPER|£
B.Com. (CBCS) lll-Year Vl-Semester Examination

THEORY AND PRACTICE OF GST

(Common Paper for All Streams)
Time: 3 Hours Max. Marks: 80

PART - A ( 5 * 4 = 20 Marks )
Note : Answer any Five of the following questions in not exceeding 20 lines each.

1. What is Partial Payment made to the Supplier and outward supply of services? (Unit-V, Page No. 204,02)
2. What do you mean by intra state supply of services? (Unit-IV, Page No. 156, Q3)
3. What do you understand by SEZ sales? What are its types? (Unit-Ill, Page No. 84, Q3)
4. What is GST Report? What do you mean by GSTR-1 and GSTR-2? (Unit-ll, Page No. 29, Q6)
5. Distinguish between Tax Invoice and Bill of Supply. (Unit-I, Page No. 3, Q5)
6. Briefly describe some services which are exempted under GST. (Unit-V, Page No. 205, Q6)
7. How tax rates are defined? (Unit-IV, Page No. 157, Q6)
8. Write a short note on mixed and composite supply under GST. (Unit-Ill, Page No. 85, Q4)

PART - B ( 5 x 12 = 60 Marks )
Note: Answer thefollowing questions in not exceedingfour pages each.

9. (a) Write a short note on credit note.

OR
(b) Write briefly about ‘Debit Note’ or 'Supplementary Invoice’. (Unit-I, Page No. 16,021)
10. (a) What is Intrastate Supply of Goods? Explain Intrastate Inward Supply with an example. (Unit-ll, Page No. 34, Q9)
OR
(b) Define Interstate Supply. Explain Interstate Inward Supply with an example.
11. (a) Define Unregistered Dealers (URDs). Explain briefly recording of purchases
made from unregistered dealers with an example. (Unit-Ill, Page No. 91,Q10)
OR
(b) How is Input Tax Credit Set Off?
12. (a) Write in detail about cancellation of services.
OR
(b) Explain how tax rates are defined at masters and transaction levels. (Unit-IV, Page No. 192, Q19)
13. (a) What do you mean by Time of Supply of Services? What are its Components?
Explain with an illustration. (Unit-V, Page No. 228, Q13)
OR
(b) Write a note on Exempt Supply of Services under GST. Explain with an example. (Unit-V, Page No. 239, Q17)
SIA PUBLISHERS AND DISTRIBUTORS PVT. LTD.

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MODEL QUESTION PAPERS WITH SOLUTIONS MP.3

MODELIQ
FACULTY OF COMMERCE PAPERIO
B.Com. (CBCS) lll-Year Vl-Semester Examination
THEORY AND PRACTICE OF GST
(Common Paper for All Streams)
Time: 3 Hours Max. Marks: 80

PART - A ( 5 x 4 = 20 Marks )
Note : Answer any Five of the following questions in not exceeding 20 lines each.

1. What are the determinants of place of supply of goods? (Unit-I, Page No. 2, Q3)
2. Explain the following under GST,
(i) Debit note. •
(ii) Credit note. (Unit-I, Page No. 3, Q4)
3. Write about return of goods. (Unit-ll, Page No. 28,Q4)
4. What do you mean by inter state supply of goods? (Unit-ll, Page No. 28, Q3)
5. Distinguish between Mixed Supply and Composite Supply under GST. (Unit-Ill, Page No. 85, Q5)
6. Define Services. (Unit-IV, Page No. 156, Q1)
7. Write about the supply of services to un-registered dealer. (Unit-V, Page No. 205, Q5)
8. List out the services which are covered under reverse charge. (Unit-V, Page No. 206, Q7)
PART - B ( 5 x 12 = 60 Marks )

'• Note: Answer the following questions in not exceeding four pages each.

9. (a) Explain the concept of registration under GST. (Unit-I, Page No. 7, Q12)
OR
(b) Explain the transition to GST. (Unit-i, Page No. 12, Q18)
10. (a) What are Supplies Inclusive of Tax? Explain the method of recording
sales transaction inclusive of GST in Tally. ERP 9. (Unit-ll, Page No. 63, Q16)
• OR
<(b) Write about Hierarchy of applying tax rate details. (Unit-ll, Page No. 75, Q19)
11. (a) Discuss the applicability of GST for advance receipts and payments.
Explain accounting of advance receipt and sales invoice in the same month. (Unit-Ill, Page No. 117, Q18)
OR
(b) How is GSTR -1 return exported and uploaded in GST portal. (Unit-Ill, Page No.150,Q30)
12. (a) Write the steps involved in transferring Input Tax Credit to GST and
explain it with a suitable example. (Unit-IV, Page No. 161,09)
OR
(b) What is Intra-State Supply of Services? Explain Intra-State Inward Supply
of Services with an example. (Unit-IV, Page No. 165, Q10)
13. (a) Explain the concept of advance receipts from customers under GST.
Write a short note on advance receipts and issuing invoice in same month. (Unit-V, Page No. 261, Q22)
OR
(b) Write about Input Tax Credit (ITC) set off. (Unit-V, Page No. 274,027 )

. SIA PUBLISHERSAND DISTRIBUTORS PVT. LTD

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