Using Tally For GST Compliance

In present's dynamic business terrain, keeping up with the ever- evolving taxation system is essential for flawless operations. The intro of Goods and Services Tax( GST) in India marked a significant shift in the taxation structure, aiming to simplify the tax process and promote translucency. As businesses strive to insure GST compliance, using technology becomes consummate. Tally, a extensively- used accounting software, has surfaced as a dependable ally for businesses navigating the complex realm of GST. In this blog, we claw into how Tally can be a game- changer in achieving GST compliance and streamlining monetary operations.

What is GST?

GST is levied on any trade of goods and services in the country. Unlike former indirect taxes, this tax is collected at the point of consumption and not at the point of origin. To summarise, GST is a comprehensive,multi-stage, destination- grounded tax that's levied on every value addition.

The law governing GST was passed in the parliament on the 29th of March 2017 and it was administered across the country on the 1st of July 2017. A product goes through multiple stages before it's consumed by the end- user. These stages are alike to those of a supply chain.

Just like, the supply chain of a product involves the ensuing stages :

  • Purchase of raw accoutrements
  • Dealing the product to a wholesaler and also to a retailer
  • trade to the end consumer
GST is levied on each stage mentioned above, which makes it a multi-stage tax.

GST is levied at the point of consumption of goods or services. For case, if a product is manufactured in West Bengal and is vended to an end consumer in Karnataka, also GST will be levied and collected by the Government of Karnataka and not West Bengal.

The passage of GST was started in the year 2000 when a commission was formed to draft the GST law by our former Prime Minister, Atal Bihari Vajpayee. It took 17 times for the government to evolve the law and also, the GST bill was passed by the Parliament in the year 2017. The Act eventually came into effect on the 1st of July 2017.

In the indirect tax governance before GST, the indirect taxes were levied by the nations and the centre. Each state collected Value Added Tax( VAT) for the trade of goods within the same state. For the inter-state trade of goods, CST (Central State Tax) was levied by the centre. And, on the trade of services, service tax is applicable.

Here’s the list of indirect taxes applicable before GST :

  • Central Sales Tax
  • State VAT
  • Service Tax
  • Luxury Tax
  • Entertainment Tax
  • Entry Tax
  • Taxes on ads
  • Taxes on lotteries, betting, and gambling

Different Types of Taxes Under GST

Since the Goods and Services Tax (GST) was introduced in India in 2017, many indirect taxes have been consolidated and removed. But although GST is considered to be a single tax, there are 4 different types of GST in India. Therefore, it can be difficult for many businesses and individuals to understand the different types of GST, when they exist and how they work. State GST (SGST), Central GST (CGST), Union Territories GST Service Tax (UTGST) and Integrated Goods and Services Tax (IGST).

What are SGSTs?

The full form of SGST is State Goods and Services Tax, which is a type of GST levied in India by the state government for the supply of goods or services within the state. Therefore, in India, SGST applies when the goods are used in the same condition. The SGST rate varies according to the GST rate, which depends on the particular goods/services provided. SGST allows state governments to directly and easily collect GST revenue when supplies are located in the same state . State governments can use the revenue from SGST to finance various projects such as infrastructure, construction and investment to support the future growth of the state. SGST paid by the business is deductible from output tax, thus reducing the overall GST liability of the registered entity.

What is UTGST?

The full form of UTGST is the Combined Territories Goods and Services Tax. This GST applies to the supply of goods or services in the Union Territories of India, including Delhi, Andaman and Nicobar, Ladakh, Dadra and Nagar Haveli, Daman and Diu, Chandi Garh, Jammu and Kashmir, Pondicherry and Lakshad Islands. So in practice, UTGST and SGST are similar, the only difference is that the first applies to the Union Territory and the second applies to the states of India. The Central Government, in consultation with the Regions, is also responsible for setting the UGST rate for goods and services, which is usually the same as the SGST rate. In the Union Territory (UT), governments are responsible for collecting the UGST tax applicable to the supply of goods/services in the Union Territory. As with all other taxes levied in the Union Territory, revenue from UGST can be used to finance development and growth in the Union Territory

What is CGST?

The full form of CGST is Central Goods and Services Tax, which is a type of GST levied by the central government of India for the supply of goods and services within a state or territory entity. The CGST rate applicable to each good or service is determined by the GST Commission and is taken by the central government. This goes to the central government. Therefore, the difference between CGST and SGST is the agency that gets the tax. All businesses registered under the GST regimes are subject to CGST and are required to declare CGST regularly with their government job details. GST given by a source registered with GST can be used as input tax and deducted from GST paid on purchases from the business. This will decrease the GST liability of registered entities.

What is IGST?

IGST is a goods and services tax group that includes taxes on all government goods and services. Taxes are split between the federal and state governments, and exports are taxed at zero. GST regulates the Supply of Goods and Services. Under the GST regime, the Integrated Goods and Services Tax (IGST) is levied by suppliers of goods and services in the country. According to Article 269A of the Constitution, GST in government business or industry is levied by the Government of India and this tax is distributed between the Union and the states as the Parliament can determine as per the GST Council recommendations. according to the law.

How To Begin With Tally GST

Besides the GST app, various financial apps like ClearTax and Tally help you prepare your books according to the GST guidelines. You can integrate Tally ERP 9 solutions with ClearTax GST. To use Tally, users must create a company in Tally, enable GST functionality, and generate required documentation.

Create Company
Go to Tally Gateway > Alt + F3 > Create Company

For example, Company Name, From Name and Address, Code, etc. Enter basic information such as In

Medical Centers simply select the Account or create products according to the company's needs.

In fiscal year e.g., this is the first day of the current fiscal year. For example, it displays January 4, 2017 by default and can be changed as needed.

Enter the library password if required. Press Y or Enter to accept and save. Step Instructions
  • Step 1 Open the Tally software Double click the Tally icon on the desktop.
  • Step 2 Go to the Create Company Screen To do this, select Create Company from Company Information. Use the up and down arrow keys and press Enter to enter the menu.
  • Step 3 Enter the details on the company creation screen In this company creation screen, you must enter all your company information requested from you.
  • Information to be entered on the company creation screen.
Enable GST Feature in Tally
  • Open GST Transactions on Tally
  • Go to Tally Gateway > F11: Transactions > F3: Policy and Taxation
  • On the screen you will see the following options:
  • Open Goods and Services Tax 44 (GST): / Remittance GST Details: Yes.
  • After using Tally's accounting functions, the following screen appears.
  • This will take you to another screen where you can set GST details such as the state your company is registered in, registration type, GSTIN number.
  • Press Y or Enter to accept and save.
  • Tally.ERP 9 for GST compliance, you must enable the GST functionality. While running, GST-related jobs, products, and transactions are listed, and GST returns can be generated.
Create Ledgers
After you have created the company and enabled the GST functionality, you must create a ledger to migrate the accounting entries in Tally. Following are the steps:
  • Go to Tally Gateway > Personal Information > Books > Create
  • Buy, Sell, State Tax, Central Tax, Consolidated Tax, Product Name etc. Enter the name of the notebook you want to create, such as
  • Select the appropriate group to which this type of list belongs; for example, Government Taxes in the Rules and Regulations group.
  • Enter any other required information, press "Y" or "Enter" to accept and save.
  • After completing the 3 steps above, you can start entering accounts in Tally. To do this, go to Tally Gateway > Financial Information. Payments, receipts, sales, sales, purchases, etc. There are many accounting records with numbers.
  • Select the relevant file and start converting the input data.
Use ClearTax GST if you want to generate GST compliant invoices and submit accurate GST information. The software integrates easily with Tally, Excel and other accounting software. You can import the data from the statement for sales and purchases in ClearTax software and then GSTR-1, GSTR 3B, GSTR-6, etc. it will automatically calculate values to fill various GSTR forms

How does GST work in tally

Tally's GST functionality simplifies the intricate process of tax calculation, invoice generation, and compliance. With Tally, you can Induce GST- biddable invoices with ease, including details of applicable taxes. Calculate taxes directly hung on the applicable tax rate and tax type. attune tax payments and bills, icing your fiscal records remain accurate and over- to- date. induce GST returns painlessly, reducing the executive burden and implicit crimes.


Tally ERP 9 simplifies GST return form by automating the entire process. It captures and organizes your deals, calculates accurate GST liabilities, and generates GST- biddable reports. With Tally, you can painlessly produce GSTR- 1, GSTR- 3B, and other needed GST returns. The software ensures that your data is directly counterplotted to the separate sections of the return forms, minimizing errors and saving time. Tally's intuitive interface guides you through the return form process, reducing the complexity of handcrafted computations and guarantying timely compliance. By streamlining data entry, conciliation, and report generation, Tally ERP 9 empowers you to meet GST return filing deadlines efficiently and with confidence.

Yes, Tally ERP 9 is equipped to handlecross-border deals involving Goods and Services Tax( GST). Its robust functionalities enable flawless operation of foreign deals while guarantying GST compliance. The software allows you to configure tax rates, set up custom GST checks, and create GST- biddable invoices forcross-border dealings. also, Tally ERP 9 facilitates the accurate computation of integrated GST( IGST) for imports and exports, simplifying the complex process ofcross-border taxation. With its advanced features and robotization capabilities, Tally ERP 9 empowers businesses to navigate the complications ofcross-border deals while maintaining adherence to GST regulations.

HBS Solutions offers comprehensive training and funds to empower you with in- depth knowledge of GST in Tally ERP 9. Our expert- led works give hands- on literacy, covering crucial aspects similar as GST setup, tax computations, invoicing, and compliance. You will gain practical perceptivity through real- world scripts and case studies, enabling you to navigate GST complications seamlessly. Our user-friendly tutorials, webinars, and step- by- step guides offer on- demand literacy at your pace. Whether you are a freshman or seeking advanced perceptivity, HBS Solutions equips you with the skills to produce, manage, and report GST deals effectively using Tally ERP 9, icing you are well- prepared to meet compliance conditions and optimize your business processes.

Yes, you can efficiently reconcile your GST data with Tally ERP 9. Tally's advanced features allow you to seamlessly match your GST- related deals with your fiscal records. By regularly importing and streamlining your GST data into Tally, you can freely compare it with your internal records. Tally's assembled- in tools enable you to reconcile your Input Tax Credit( ITC) with the GST gate's data, insuring delicacy and compliance. With real- time updates and error discovery mechanisms, Tally ERP 9 simplifies the conciliation process, helping you identify disagreement and amend them instantly.

Yes, Tally ERP 9 is a protean and comprehensive software result that's well- suited for businesses of all sizes to efficiently handle Goods and Services Tax( GST) conditions. Whether you run a small enterprise, amid-sized company, or a large pot, Tally ERP 9 provides the necessary tools and features to streamline GST compliance. Its user-friendly interface, robust functionalities, and customizable options make it accessible and effective for businesses with varying complications.

Tally ERP 9, a comprehensive account software, competently accommodates various types of Goods and Services Tax( GST) current in India. It seamlessly handles Central Goods and Services Tax( CGST), levied by the central government on intrastate deals, and State Goods and Services Tax( SGST), assessed by state governments on intrastate inventories. also, Tally ERP 9 efficiently manages the Integrated Goods and Services Tax( IGST), applicable to interstate deals, and Union Territory Goods and Services Tax( UTGST), akin to SGST but for union territories. This software's versatility empowers businesses to navigate the complications of these different GST factors, icing accurate tax computation, reporting, and compliance, in alignment with India's evolving taxation landscape.