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Guide to Recording Purchase Invoices in Tally ERP 9 Release 6 for GST

This article provides a comprehensive guide on how to record purchase invoices in Tally ERP 9 Release 6, adhering to GST regulations. It covers the essential ledger creation process, including local and interstate purchase accounts, and explains the step-by-step procedure for entering purchase transactions. The guide also details how to apply appropriate GST components (CGST, SGST, IGST) and view tax analysis within Tally.

📖 2 min read read🏷️ GST Accounting in Tally

Following the implementation of GST, businesses frequently seek guidance on correctly documenting transactions within their accounting systems. While several GST-compliant software options exist, this guide focuses on the process of entering purchase invoices in Tally ERP 9 Release 6 for GST purposes. Purchases generally fall into two categories: local purchases, which incur CGST and SGST, and interstate purchases, subject to IGST.

Before making a purchase entry in Tally, it is essential to set up the necessary ledgers.

Ledger Creation

You must establish the following types of purchase ledgers and input the required information for each:

  • Local Purchase
  • Interstate Purchase
  • CGST
  • SGST
  • IGST
  • Suppliers Account

For the supplier's account, it is crucial to indicate whether the supplier is registered or unregistered. If registered, enter their GSTIN (Goods and Services Tax Identification Number).

Steps to Create a Purchase Invoice in Tally.ERP 9 Release 6 for GST

Step 1: Navigate to Gateway of Tally > Accounting Vouchers > F9 Purchase. In the supplier invoice column, input the sales invoice number provided by the supplying party. In the date column, enter the date on which the supplier issued the sales invoice.

Step 2: From the Party A/c name column, select the appropriate supplier’s ledger or the cash ledger.

Step 3: Choose the relevant purchase ledger. For local purchases, select the purchase ledger designated for local taxable purchases. For interstate purchases, select the ledger for interstate purchases.

Step 4: Select the necessary items, then specify their quantities and rates.

Step 5: For local purchases, select the central and state tax ledgers. If it is an interstate purchase, select the integrated tax ledger.

You can review GST details by:

  • Clicking A: Tax Analysis.
  • Clicking F1: To view the detailed tax break-up.

For further reading, refer to our guide on 'How to Record, View & Bulk Import Invoices?'

Frequently Asked Questions

What is the difference between CGST, SGST, and IGST?
CGST (Central Goods and Services Tax) and SGST (State Goods and Services Tax) are levied on intrastate (local) transactions, while IGST (Integrated Goods and Services Tax) is levied on interstate transactions and imports.
How do I determine if a purchase is local or interstate for GST purposes?
A purchase is considered local (intrastate) if the supplier and the recipient are located in the same state or Union Territory. It is interstate if the supplier and recipient are in different states or Union Territories.
What is a GSTIN and why is it important for suppliers?
GSTIN (Goods and Services Tax Identification Number) is a 15-digit unique identification number assigned to every registered taxpayer under GST. It is crucial for suppliers to mention it on invoices for proper tax credit claims and compliance.
Can I modify a purchase invoice after it has been created in Tally?
Yes, Tally ERP 9 allows modification of entries. However, depending on the stage of the transaction and GST return filing, certain changes might have implications and should be done carefully, ideally with proper audit trails.
What are the common errors to avoid when recording purchase invoices under GST?
Common errors include incorrect GSTIN, wrong classification of local vs. interstate purchases, improper application of tax rates, missing or incorrect HSN/SAC codes, and issues with vendor ledger reconciliation.