Basic Guide to use Tally ERP 9. Release 6 for GST

With the GST implementation, various accounting software such as ClearTax and Tally are available to help you prepare your books in alignment with GST rules. In this article, we will guide you how to use Tally ERP 9. Release 6 for GST. You can also integrate your Tally ERP 9 solutions with ClearTax GST. In order to use Tally, a user must create a company on Tally, enable the GST features and create the necessary ledgers. Let’s check them out in detail.

How to create a company

• Go to Gateway of Tally > Alt + F3 > Create Company
• Enter the basic information, i.e., name, mailing name and address of the company, currency symbol etc.
• In the ‘maintain field’, select Accounts Only or Accounts with Inventory as per the company requirements.
• In the Financial Year from, the first day of the current financial year for e.g., 1-4-2017 will be displayed by default, which can be changed as per requirement.
• Enter the Tally Vault Password if required.
• Press Y or Enter to accept and save.

Steps	Actions	Instructions to be followed
Step 1	To open Tally Software	Double click on Tally icon from your desktop.
Step 2	To go to Create Company Screen	To do this Select Create company from the Company Info. Menu using up and down arrow key and press Enter Key.
Step 3	To fill up the Details in Company Creation Screen	In this company creation screen, you should enter all the details of the company that you been asked for.

Details to be filled in the company creation screen

Directory

It is nothing but the data storage location. The tally directory will store all data you entered in Tally ERP 9. Anyway, by default, the data storage will be inside the installation folder.

Name

In this field, we are required to type the name of the company, for example. XYZ INC.

Primary mailing details

• Mailing name
  In this field, we are required to type the name of the company, for example. XYZ INC.
• Address
  In this data field, we are required to enter the address of the company.
• Country
  Here we are required to select the country from the list in which the business Operates.
• State
  In this data field, we have to select the state in which we would comply with statutory laws
• Pincode
  Pincode of the location where the office exists.

Contact details

• Phone no
  Enter the Company contact number which we would like to display on Invoices
• Mobile no
  Enter the Contact number of Managing Person to whom any queries related to Invoicing or Delivery of product, complaint in the product could be reached to
• Fax No
  Enter the Fax number to which any confirmation statements, ledger copies etc., could be sent and received
• E-mail
  Enter the company’s email address to which any product inquiry and other communications could be made.
• Website
  Enter the company’s web address if any

Books and financial year details

• The financial year begins from
  In this data field, you have to type the financial year in which you want to create a company. Suppose you may be starting a company on 1st December 2018, you should enter the financial year from 01.04.2018.
• Book beginning from
  In this data field, you have to type the financial year in which you want to create a company. Suppose you may be starting a company on 1st December 2018, you should enter the financial year from 01.04.2018.
  • Starting in the middle of the financial year.
  • Companies that are migrating from Manual Accounting to Tally ERP 9 in the middle of the financial year.

Security control

• Tally Vault password (if any)
  This data filled is for security purposes. By enabling this field, Tally ERP 9 Convert tally data into an encrypted format. To encrypt means convert data from recognised format to unrecognised format.
  By entering the Tally Vault password we can prevent unauthorized access to company data. Now in Latest Tally ERP 9, There is a password strength indicator, which will help you to set a strong password. Red colour indicates a weak password whereas peach-orange colour: fair, Yellow is good and Green colour indicates a strong password.
  Caution: Forgetting Tally vault password will render the data inaccessible

Use security control?

Enabling this data field, we will get complete control over the data, we can assign users for specific purposes, for example:

• We can assign data entry operators who can access only voucher entry screens.
• We can assign billing clerks who can access only the Sales invoice voucher
• We can assign Financial managers who can access financial data and reports as the administrator controls his access.

In this data field, we will be asked the administrator name and password.

Base currency information

• Base currency symbol
  In this data field, the currency symbol of the country is auto-selected based on the country of origin fed by you in the previous data field. There is no need to change this data field if you are using the same currency for accounting.
• Formal name
  This is the formal name of the currency selected in the previous field
• Suffix symbol to amount?
  This data field will ask you whether a currency symbol is required for example: prior to an amount like Rs. 4,500
• Add space between amount and symbol?
  This data field is like Rs. 4,500 space in between currency symbol and amount.
• Show amount in millions?
  If we set this data field to Yes, Tally will display the amount in millions that are in the Balance sheet or other reports. The amount for example 100,00,000 will be shown as 10. [One million equals 10,00,000].
• Number of decimal places
  It is a general practice to use 2 decimal places, for example :
  • for using Paisa in Indian currency we use 2 decimal place.
  • for using cents in American dollar currency we use 2 decimal places
• Word representing the amount after decimal
  This data field is used in printing, in Indian currency decimal portion is said to be Paisa. Set this field as per your formal name of the decimal value in your currency. For USD it is cents. Hundred cents make one dollar.
• Number of decimal places for the amount in words
  If we set this data field to 1 decimal places in Indian currency, then while printing 75 Paisa. Will print as seventy Paisa, if we set this to 2 decimal places, then it will print the second fraction like seventy-five Paisa.

To save the details entered in the company creation screen
If you have entered all the details and after verifying it seems to be right, then you have to accept the screen by pressing Enter and again Enter to accept and save the details.

Note: If we have enabled the Tally Vault password, then in the next screen it will ask the Name of the user and Password details. After entering these details, Tally ERP 9 will create a company and direct you to the Menu Gateway of Tally Where you can create masters and enter transactions.

Enabling GST features in Tally

1. Go to Gateway of Tally > F11: Features > F3: Statutory & Taxation
2. On the screen you will find the following option :
3. Enable goods and service tax (GST): Yes
4. Set/alter GST Details: Yes.

• This will display another screen where you can set GST details of the company such as the state in which the company is registered, registration type, GSTIN number etc.
• Press Y or Enter to accept and save.

To use Tally.ERP 9 for GST compliance, you need to activate the GST feature. Once activated, GST-related features are available in ledgers, stock items, and transactions, and GST returns can be generated.

Activate GST for Regular Dealers

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

2. Press F11 > F3.

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

4. Set/alter GST details – Yes. The GST Details screen appears.

5. State – shows the State name as selected in the Company Creation screen. This helps in identifying local and interstate transactions according to the party’s state.

The State can be changed in the GST Details screen and this change will affect the company master. Once the company’s state is changed the existing transactions will have an effect. To inform users of this effect, a warning message appears when the state name is changed.

6. Set the Registration type as Regular.

7. Set the option Assessee of Other Territory to Yes , if your business unit is located in the Exclusive Economic Zone (another territory).

8. Specify GST Applicable from date. GST will be applicable for your transactions from this date onwards.

9. Specify the GSTIN/UIN for the business. This can be printed in the invoices as required. You can specify this later.

10. Select the Periodicity of GSTR1 as Monthly or Quarterly, based on your business turnover.

11. The option e-Way Bill applicable is set to Yes, with the Applicable from the date and Threshold limit.

12. Select the value to be considered for e-Way Bill for the option Threshold limit includes.

13. Set the option Applicable for intrastate to Yes, if it applies to your State and enter the Threshold limit.

Note: Additional fields may appear for few states depending on the statutory needs of that state, such as:

(1) Kerala: The fields Kerala Flood Cess applicable? and Applicable from appearing for companies with Kerala as State and Regular as Registration type in Release 6.5.3 and later versions.

(2) Ladakh: As Ladakh has been separated from Jammu & Kashmir and awarded the status of Union Territory, you can specify the new GST registration number assigned for Ladakh in GSTIN/UIN field and the existing registration number in the GSTIN/UIN (prior to 1st Jan 2020).

(3) Jammu & Kashmir: In case GST dealers in Jammu and Kashmir are required to get a new GST registration, you can specify the new GSTIN in the GSTIN/UIN field. The existing GSTIN can be specified in the GSTIN/UIN (prior to 1st Jan 2020) field, which can be enabled using the Show GSTIN/UIN (prior to 1st Jan 2020) for Jammu and Kashmir option in F12: Configure. The majority of the businesses will not require new registration and they can continue with their existing GSTIN/UIN.

(4) Dadra & Nagar Haveli and Daman & Diu: The name of the new union territory Dadra & Nagar Haveli and Daman & Diu is provided in Release 6.6.3. All masters with Daman & Diu and Dadra & Nagar Haveli are automatically updated with the name of the new union territory. You have to manually specify the new GSTIN/UIN. In case you want to view state/union territory and GSTIN/UIN of the company before the merger, you can enable the option Show state and GSTIN/UIN (before reorganisation) for Dadra & Nagar Haveli and Daman & Diu under F12: Configure.

The fields State (before reorganisation) and GSTIN/UIN (before reorganisation) are displayed with the details specified before the reorganisation. The GSTIN/UIN (before reorganisation) does not appear if the pre-merger UT was Dadra and Nagar Haveli.

14. Set the option Enable tax liability on advance receipts to Yes to activate calculation of tax liability on advance receipts. This option is disabled by default.

15. Set the option Enable tax liability on reverse charge (Purchase from unregistered dealer) to Yes to activate calculation of tax liability on a reverse charge on URD purchases. This option is disabled by default.

16. Enable the option Set/alter GST rate details? to enter the GST details at the company level.

17. Set the option Enable GST Classification? to Yes, to create and use the classifications in the GST Details screen of masters.

18. Set the option Provide LUT/Bond details? to Yes, to enter the LUT/Bond No., and Validity period.

19. Press Enter to save.

Activate GST for Composition Dealers

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

2. Press F11 > F3.

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

4. Set/alter GST details – Yes.

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

Note: The name of the new union territory Dadra & Nagar Haveli and Daman & Diu is provided in Release 6.6.3. All masters with Daman & Diu and Dadra & Nagar Haveli are automatically updated with the name of the new union territory. In case you want to view state/union territory and GSTIN/UIN of the company before the merger, you can enable the option Show state and GSTIN/UIN (before reorganisation) for Dadra & Nagar Haveli and Daman & Diu under F12: Configure. 

The fields State (before reorganisation) and GSTIN/UIN (before reorganisation) are displayed with the details specified before the reorganisation. The GSTIN/UIN (before reorganisation) does not appear if the pre-merger UT was Dadra and Nagar Haveli.

6. Set the Registration type as Composition.

7. Set the option Assessee of Other Territory to Yes, if your business unit in located in the Exclusive Economic Zone (another territory).

8. Specify GST Applicable from date. GST composition will be applicable for your transactions from this date onwards.

9. Specify the GSTIN/UIN for the business. This can be printed in the invoices as required. You can specify this later.

10. Tax rate for taxable turnover appears as 1%. This rate is applied to your transactions to arrive at the taxable value.

Note: If you are changing the registration type from regular to composition, the applicability date of GST regular registration will be retained. You can change the date as required.

11. Based on your business type, select the Basis for tax calculation. For outward supplies, the total of taxable, exempt and nil rated will be considered as the Taxable Value. For inward supplies, the total value of purchases made under reverse charge will be considered as the Taxable Value.

● Taxable, Exempt and Nil rated values – the tax will be calculated on the:

• Total of taxable, exempt and nil rated sales.
• Total of purchases attracting reverse charge.

● Taxable – the tax will be calculated on the:

• Total of only the taxable sales.
• Total of purchases attracting reverse charge.

Click L: Tax Rate History to provide the history of Tax Rates with the corresponding Applicable From date and Basis for Tax Calculation, as shown in the following example:

12. The option e-Way Bill applicable is set to Yes, with the Applicable from date and Threshold limit.

13. Select the value to be considered for e-Way Bill for the option Threshold limit includes.

14. Set the option Applicable for intrastate to Yes, if it applies to your State and enter the Threshold limit.

15. Set the option Enable tax rate for purchase (Includes purchases under reverse charge) to:

● Yes, to enter the GST rate in the ledgers and stock items for calculating GST in transactions.

● No, to specify the GST rates in each transaction for calculating GST.

16. Press Enter to save.

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

Steps for Ledger Creation

After creating a company and activating GST features, you need to create ledgers that will enable you to pass accounting entries in Tally. Here are the following steps :

• Go to Gateway of Tally > Accounts Info > Ledgers > Create
• Enter the Name for the ledger you want to create such as purchase, sales, state tax, central tax, integrated tax, stock item names etc.
• Select the appropriate group to which such ledger belongs for example state tax under duties and taxes group.
• Enter the other related information required and press Y or Enter to accept and save.

After having done the above 3 steps, you can start entering accounting entries in Tally. For this, Go to Gateway of Tally >Accounting Vouchers. There are many accounting Vouchers in Tally such as Payment, Receipt, Contra, Sales, Purchase, etc. Choose the relevant Voucher and start passing the accounting entries. 

In case you want to create GST compliant invoices and file accurate GST returns, then use ClearTax GST. This software easily integrates with Tally, Excel & other accounting software. You can import invoice level data for Sales & Purchase in the ClearTax software and then it will auto calculate the data values to be filled on various tables of GSTR  forms like GSTR-1, GSTR 3B, GSTR-6 and so on.

It automatically populates all the data & performs a validation check to make sure the return is error-free. You can download our Desktop App for filing GST Returns from Tally with a single click!