VAT Adjustment in Tally ERP 9

1. VAT Adjustment Class Journal [ VAT ]in Tally.ERP 9 To create a VAT Adjustment Class, Go to Gateway of Tally > Accounts Info. > Voucher Types > Alter > Journal In the Voucher Type Alteration screen, enter the Name of Class, for e.g., VAT Adjustment Class.  [Img-34] Set Use Class for VAT Adjustments to Yes.  [Img-35] Press Enter to go back to Voucher Type Alteration screen.  Accept the journal Voucher Type Alteration screen.  Note: The voucher class is created for enabling the list of VAT Adjustments (flags) in journal. The same is used for recording the adjustments in the form. The VAT Adjustment to be used for recording the adjustment entries will be displayed for selection based on the State and the Type of Dealer pre-defined in the F3: Statutory &

2. Taxation Karnataka will be displayed on selecting the Voucher class created for the journal voucher. Features. The VAT Adjustments pertaining to VAT Adjustment against Tax Payable [ VAT ]in Tally.ERP 9 At the end of every tax period it is advisable to set off the output vat amount of output vat ledgers with Input VAT amount of input VAT ledgers created. Where the net output is in excess, the balance amount of VAT due is transferred to VAT Payable ledger. For any tax period, if the input tax is in excess of output VAT, then input VAT has to be adjusted to the extent of output VAT liability and the balance of Input Tax Credit can remain in the respective ledgers. To create a journal voucher for adjusting the output VAT against input VAT, Go to Gateway of Tally > Accounting Vouchers > F7: Journal > Select Not Applicable from the Voucher Class List. 1.Select the required Output VAT, Purchase Tax and CST ledgers to be debited from the List of Ledger Accounts and enter the corresponding ledger balance amount for the given period in the Debit field. These ledgers are to be debited for adjusting the total output vat (for each rate) against input vat ledgers. Note: Only in Karnataka VAT enabled Company, the output VAT, Purchase tax and CST ledgers are to be selected to set-off the dues against input tax credit as the VAT return acts as VAT and CST return. For other states, only the output VAT and purchase tax ledgers need to be selected. 2. vat, purchase tax and CST ledgers that are debited. Credit the Input VAT ledgers and enter the amount that has to be set-off against the output 3. debited, transfer the balance amount to VAT Payable ledger by selecting it in the credit field. VAT Payable ledger can be grouped under Current Liabilities or Duties & Taxes with Type of Duty/Tax as Others orCurrent Liabilities. In case the aggregate of input vat ledgers is less than the debit values of output VAT values 4. extent required for set-off. Here the additional ledger like VAT payable need not be used. In case where the input VAT value is more than the output VAT, use the excess amount to the

3. [Img-77] 5. Accept the voucher and then make a payment entry for the payable amount if any. Entry for Payment of VAT Liability [ VAT ]in Tally.ERP 9

4. VAT Payment To create a VAT Payment voucher, Go to Gateway of Tally > Accounting Vouchers > F5: Payment 1.In the Payment Voucher press Stat Payment button (Alt+S). In the Statutory Payment screen enter the details given below: [Img-78] 2.In Statutory Payment screen Type of Duty/Tax: Select VAT if the payment is being made towards VAT dues, else select CST.  Auto Fill Statutory Payment: Set it to Yes to automate the display of VAT payable amount.  Adjust Input VAT for Payment: This field gets displayed only when - Auto Fill Statutory Payment is enabled. On setting this field to Yes, the VAT payable amount gets calculated by offsetting output VAT against the available tax credit.  Period From: Enter the return period in From and To fields. 

5. [Img-79] 3. Statutory Payments details, the VAT Details will be auto filled in the payment Voucher. Press Enter to save the Statutory Payments screen. On saving the [Img-80] 4. Ledger Accounts In Account field select the Bank Ledger - Dena Bank from the List of 5.Enable the option Provide Details to Yes to enter the payment Details 6.In Payment Details screen

6. Period automatically based on the details entered in Statutory Details scren. From and To: The period details will be displayed  Type of Payment: Select Not Applicable as the payment is made towards the Original returns (monthly VAT liability)  Deposit Date: Enter the Date of Deposit of VAT to the department.  DD/Cheque No.: Enter the DD or Cheque Number through which the payment is made.  Name of Issuing Bank: Enter the name of the bank on which the DD or cheque is issued.  [Img-81] 7. Enter the details in the field Narration, if required. 8. Press Y or Enter to accept and save. Recording Payment Voucher in Different Scenarios Paying only the output VAT amount using Statutory Payment button In the Payment Voucher press S: Stat Payment button (Alt + S) to display the Statutory Payment Details screen. Payment to Yes to calculate the VAT payable amount automatically and set Adjust Input VAT for Payment to No. Set Auto Fill Statutory Automatically offsetting the Output VAT against available Tax credits In the Payment Voucher press S: Stat Payment button (Alt + S) to display the Statutory Payment Details screen. Payment to Yes andAdjust Input VAT for Payment to Yes. Set Auto Fill Statutory Entering VAT payable amount manually

7. In the Payment Voucher press S: Stat Payment button (Alt + S) to display the Statutory Payment Details screen. Payment to No. Set Auto Fill Statutory Paying Other Current Liabilities by recording separate entry for each Payment Type Payment of only the current liabilities like interest, penalty, late fees etc. as per state-specific provisions can be recorded in payment voucher. In the Payment Voucher press S: Stat Payment button (Alt + S) to display the Statutory Payment Details screen. Set Auto Fill Statutory Payment to No. On selecting theCurrent Liability ledger the Payment Type sub-screen will be displayed. Select the required Type of Payment and accept the payment entry. Alert Message In the absence of output VAT ledgers or taxable sales entries, if the Stat Payment button is selected in payment voucher for automating the payment value, the Alert Message will be displayed as shown: [Img-82] On display of this Alert message follow any of the following procedures: 1. Check From and To dates to ensure that balances are available in both Input and Output Vat ledgers for the specified period 2. Ensure that the Input Vat and Output Vat ledgers are selected with the respective VAT Sub Type 3. Mark the Auto Fill option as No and continue as a Manual Payment.

8. VAT Reports [ VAT ]in Tally.ERP 9

9. VAT Reports To view the StatutoryReports menu of Karnataka State, Go to Gateway of Tally > Display > Statutory Reports > VAT [Img-83] The VAT Reports menu consists of VAT Computation  VAT Forms  E-VAT Annexures  VAT Commodity  VAT Register  Value Added Tax Commodity Report In the VAT Reports menu, click on VAT Commodity. The Commodity Report menu displays as shown:

10. [Img-84] The Value Added Tax Commodity Report menu consists of: Purchase  Sales  Value Added Tax Registers To view the Value Added TaxRegister menu, In the VAT Reports menu click VAT Register [Img-85]

11. The Value Added Tax Registers menu consists of: Vat Purchase Registers  Vat Sales Registers  VAT Computation [ VAT ]in Tally.ERP 9 The VAT Computation reports provide the Assessable Value and the Tax Amount of the purchase and sales transactions entered using different VAT/ Tax classifications. The adjustment entries recorded using the VAT Adjustments are also captured in the VAT Computation. To view the VAT Computation report, Go to Gateway of Tally > Display > Statutory Reports > VAT > VAT Computation The VAT Computation report is displayed as shown below: [Img-86]

12. [Img-87] A detailed explanation of the fields in the VAT Computation report is given below: Assessable Value The Assessable Value is the sum of the total value of goods at which they are purchased and sold. This assessable value forms the value on which VAT is calculated. Tax Amount The total Tax Amount calculated on Assessable value using the respective Tax percentage is the Tax Amount. Note: You can drill down the VAT Computation screen to view the VAT Classification vouchers. F1: Detailed To view the VAT Computation Report in detail, click the button F1: Detailed or press Alt + F1. You can observe that the VAT Computation screen thus displayed, has only local taxable transactions captured in the report. To show all VAT classifications and CST details. The report can be configured to display the same by clicking F12: Configure

13. Displaying All VAT Classifications To Classifications to Yes in F12:Configure display all VAT Classifications, set the option Show All VAT [Img-88] On setting this option to Yes, you can see that the VAT Computation report displays details of all VAT Classifications, including exempt transactions. The VAT Computation screen displays as shown: [Img-89]

14. [Img-90] [Img-91] Displaying CST Details

15. To display CST Details in VAT Computation report, set the option - Show CST Details to Yes in F12: Configuration. [Img-92] The VAT Computation report with CST Details is as shown below: [Img-93]

16. [Img-94] [Img-95] VAT Classification Vouchers Report

17. The details of transactions recorded using a particular VAT/Tax class will be displayed here. Select a VAT/tax classification in VAT Computation screen and press Enter key to view the VAT Classification Vouchers report. VAT Classifications Vouchers Report without MRP Column While Classification Vouchers report displays without the MRP column as shown: invoicing if the MRP/Marginal field is not enabled, the VAT [Img-96] VAT Classifications Vouchers Report with MRP Column In case where the MRP/Marginal field is enabled while invoicing and VAT Classification Vouchers report is generated, the MRP/Marginal value appears in MRP column.

18. [Img-97] VAT Return Form The print preview of the Form VAT 100 of Karnataka displays as shown:

19. [Img-98] Form VAT 100 - Page 1

20. [Img-99] Form VAT 100 - Page 2

21. [Img-100] Form VAT 100 - Page 3

22. [Img-101] Form VAT 100 - Page 4 Note: The detailed explanation on the values captured in each field of return form is available in the state-specific statutory

23. manual uploaded on our website. VAT Computation Analysis [ VAT ]in Tally.ERP 9 The VAT Analysis section is introduced in the VAT Computation report to provide information on VAT Payable, amount paid and refund amount for the current period along with the details of input tax credit and VAT liability carried forward to the next return period. Note: To illustrate the VAT Analysis, the entries of purchases and sales are recorded in the month of December in a newly created company. Hence the Input VAT or output VAT of previous months are not carried forward from previous months. Assume that there is are taxable purchase and sales entries as illustrated below: Purchase Entry Record a purchase entry by selecting purchase & input VAT ledgers with VAT/Tax class - Purchases @ 5% and Input VAT @ 5% respectively. The purchase entry appears as shown: [Img-102] Sales Entry Record a sales entry by selecting sales & output VAT ledgers with VAT/Tax class - Sales @ 5% and Output VAT @ 5% respectively. The sales entry appears as

24. shown: [Img-103] VAT Computation In the VAT Computation screen click on F12: Configure and set Show VAT Analysis to Yes. [Img-104] Press Alt+F1 to view the report in Detailed mode. The VAT Computation with VAT Analysis displays as shown:

25. [Img-105] VAT Analysis - Payable and Paid Amount on Full Payment of VAT Dues For the above purchase and sales entries, record a payment entry for full payment of VAT dues using the Auto-fill option. In the single entry mode of Payment voucher, select the bank ledger in Accounts field and press S: Stat Payment button (Alt+S). Set the Details screen. options as shown in Statutory [Img-106] The Payment entry displays as shown:

26. [Img-107] Set Provide Details field to Yes and enter the VAT Payment Details. [Img-108] After accepting VAT Payment Details, the Bank Allocations screen appears. The Bank Allocations for field displays the bank ledger selected in Accounts field of payment voucher. Under Payment Favouring for, enter the name in whose favour the payment is being made. Select the required Transactions Type. The payable amount is captured in Amount column. The cheque number entered in VAT Payment Details screen needs to be entered in Instrument No. field, the Instrument Date is captured from Voucher Date. If Cheque is selected as the Transaction Type the Cross Instrument Using field will be displayed as A/c Payee. On selecting anyother Instrument using field will not be displayed. Transaction Type, the Cross

27. [Img-109] Accept the payment entry. Go to VAT Computation and view the VAT Analysis. Separate sections are provided for VAT Liability and VAT Payments. Under VAT Liability, the VAT Payableamount and the Current Period VAT Payable amount will be displayed. Under VAT Payment, Challan/cheque will be shown. The VAT Payable will not show any amount if the payment of VAT dues is done fully. the amount Paid through The Payable and paid amount displays as shown:

28. [Img-110] Go to the payment entry and mark it optional as the same purchase and sales entries will be used in the scenarios explained in the partial and excess payment examples. VAT Analysis - Payable and Paid Amount on Excess Payment of VAT Assume that an advance payment was done before computation of actual dues and the paid value was in excess of actual payable at the end of the tax period. In the single entry mode of Payment voucher, select the bank ledger in Accounts field and press S: Stat Payment button (Alt+S). In the Statutory Payment sub-screen set the options - Type of Duty/Tax as VAT and Auto Fill Statutory Payment to No. In the Payable ledger and enter the amount in excess of VAT dues. Payment entry select the VAT

29. [Img-111] Set Provide Details field to Yes and enter the VAT Payment Details. Accept the payment entry. Go to VAT Computation and view the VAT Analysis. Under VAT Liability, the VAT Payable amount and the Current Period VAT Payable amount will be displayed. Under VAT Payment, the amount Paid through Challan/cheque will be shown. The excess amount Refundable/Carried Forward. paid will be shown as VAT The payable and paid amount for the current period displays as shown:

30. [Img-112] Change the period of VAT Computation to the subsequent tax period. The excess amount paid for the current period will be carried forward to the subsequent period as VAT Refundable/Carried Forward. [Img-113] Go to the payment entry and mark it optional as the same purchase and sales entries will be used in the next example. VAT Analysis - Payment of Interest Amount with VAT Assume that the payment is to be made towards interest. In the journal voucher, select the voucher adjustment entries. SelectInterest for field. Debit the Interest expenses Expenses) and credit the interest payable ledger (grouped under Current Liability). class created for recording VAT the Used under Payable in (grouped ledger Indirect

31. In the single entry mode of Payment voucher, select the bank ledger in Accounts field and press S: Stat Payment button (Alt+S). Set the options - Type of Duty/Tax as VAT and Auto Fill Statutory Payment to Yes/No as per requirement. On setting Auto Fill Statutory payment and Adjust Input VAT for Paymentto Yes and entering the period, the value will be automated. If set to No, the payable amount needs to be entered manually. In Payment entry, select the interest payable ledger after VAT ledgers and set the Type of Payment as Interest. [Img-114] Enter the ledger balance in the amount field. [Img-115] Accept the payment entry. Go to VAT Computation and view the VAT Analysis. Under VAT Liability, the VAT Payable amount and the Current Period VAT Payable amount will be displayed. Under VAT Payment, Challan/cheque will be shown with the breakup of VAT and interest amount paid. the amount Paid through Note: The break-up of VAT and interest amount is displayed

32. only in case where Interest is selected as the Type Payment in the Payment Voucher. The Payment Type sub- screen is provided in payment voucher recorded using Stat Payment button as per the requirements. The payable and paid amount for the current period displays as shown: of State specific statutory [Img-116]