GST Tax Payment Entry in Tally ERP 9 – Input & Output GST Adjustment

GST Tax Payment Entry in Tally

Today, we are going to look at each and every type of GST tax payment entry in Tally ERP 9.

We have already seen how to pass GST accounting entries in tally. Once they are done, we have to pay our taxes or take credit.

There are different journal entries in tally along with statutory adjustments which are used to pass the accounting entries for the payment of GST in tally.

Let’s start with what you are going to learn.

What you will learn in this post

  • How to pass a GST Payment Entry in Tally – with examples
  • How to adjust Input & Output GST in Tally
  • Passing GST Late Fee, Interest & Penalty Entry in Tally
  • Why Statutory Adjustment is used in Tally

How to pass a GST Tax Payment Entry in Tally ERP 9

After you have created GST invoices in tally and made the necessary sales and purchase entries involving GST, you have to go to the Balance Sheet in Tally.In the balance sheet, you can see all the GST tax payment ledgers like in the image below.

GST Taxation Ledgers in Balance Sheet
GST Taxation Ledgers in Balance Sheet

You can see different ledgers for GST like CGST, SGST & IGST.

Did you notice something common in all the ledgers? The balances of all the above GST ledgers are on the credit side.

That means we are liable to pay GST to the government. If the balances were on the debit side, it means we have to take credit from the government because we have paid extra GST.

Now, that you have understood the difference between GST payable and taking GST credit, I will show you how to pass GST tax payment journal entry in tally.

Here are the steps to do that:

  • From Gateway of Tally, go to Accounting Vouchers.
  • Select Payment Voucher from the right hand side green bar or press F5 – an awesome tally shortcut.
  • Press ALT + S or select Stat Payment from the options on the right hand side. You will see a window like in the picture below.
Statutory Payment Window in Tally ERP 9
Statutory Payment Window in Tally ERP 9
  • Select GST in the option for Tax Type.
  • Then, select the period for which you are making the GST tax payment. In our case, we are going to take it from 1st March 2020 to 31st March 2020. You can also take quarter if your GST return period is quarterly.
  • In the option, payment type – we have to select from 3 different types of payment. They are:
    • Advance – if you are making advance payment of GST.
    • Recipient Liability – this is for GST payment under reverse charge.
    • Regular – means you are making regular GST tax payment.
  • Select Regular because we are making the regular payment.
  • Now, in the Payment Voucher, at the top you will see the details that we have selected. Statutory Payment for GST and Payment Type Regular.
GST Tax Payment Voucher in Tally ERP 9
GST Tax Payment Voucher in Tally ERP 9
  • On the debit side, select the CGST ledger since we are making payment of ₹10,000 against CGST.
  • On the credit side, select Bank from which you are making the payment.
  • In the bank allocations, enter the bank details.
  • You will see an option to Provide GST Details. Select Yes. Enter the GST challan details from the receipt that you have.
GST Details in GST Payment Voucher in Tally
GST Details in GST Payment Voucher in Tally
  • Press Enter and save the entry.

Congratulations! You have successfully made the GST payment entry in tally.

You can also pass the similar GST payment entry for the payment of SGST, IGST, UTGST or Cess as well.

Now, we will look at how you can adjust the Input and Output GST in Tally.

How to adjust Input & Output GST in Tally ERP 9

Why do we have to adjust the Input and Output GST?

In the above GST payment entry, we didn’t have Output and Input CGST ledgers. We just had the single CGST, SGST and IGST ledgers.

Generally, Input GST means the GST on Purchases and Output GST means the GST on Sales. 

GST on purchases is our credit since we have paid that while purchasing. GST on sales is our liability because we have taken it while selling goods but yet to pay to the government.

In India, we have a system of Net Taxation.

Which means, we have to pay the net of liability and credit. This is applicable to GST, Income Tax and every type of tax.

Therefore, we need to adjust the input and output GST in tally.

Input & Output GST Adjustment in Tally ERP 9

Look at the image below.

Input and Output GST in Tally
Input and Output GST in Tally

We have both Input CGST and Output CGST. We will adjust that in tally.

Notice that Output CGST has a credit balance Input CGST has a debit balance.

So, we will pass a simple journal entry to adjust both of them.

Let’s get to it.

In a journal voucher, you need to pass a simple journal entry.

On the debit side, you have to select the Output CGST ledger because it has a credit balance while on the credit side, you need to select the Input CGST ledger.

So, both the ledgers will get adjusted against each other.

You need to adjust the ledgers with the amount of the ledger which is less from any of the two ledgers.

In our example, we will take ₹6,000 as it is the balance of Input CGST and it is the lowest of the two ledgers.

Look at the image below of the journal entry and you will see the balance of Input CGST has gone to zero. So, it is adjusted against the Output CGST.

Input and Output GST Adjustment Journal Entry in Tally
Input and Output GST Adjustment Journal Entry in Tally

Our liability of Output CGST has also got reduced from ₹40,178.58 to ₹34,178.58, exactly by ₹6,000 which is the GST adjustment.

Once this is done, you can do the accounting entry in tally for the GST payment as we saw in the beginning of this post.

Now, we will see how you can pass GST late fee entry in tally.

How to Pass a GST Late Fee, Penalty & Interest Entry in Tally ERP 9

Late Fee, Penalty and Interest under GST is payable if you have not complied with the provisions under the GST law.

We are going to see how you can pass the GST accounting entry for that in tally.

Whenever you are liable to pay a late fee, penalty or interest under GST, you have to first create a liability for that in tally.

Once the liability is created it will show up in the GSTR-3B monthly return.

Once it shows up in the GSTR-3B return, you can create a payment entry in tally for that so it is duly recognized in the return as well.

Don’t worry! I will show you the entire process and trust me it is very easy.

GST Late Fee, Interest & Penalty Liability Creation in Tally ERP 9

Let’s first create the liability for GST late fee in tally.

  • Go to the journal voucher in tally.
  • Then, click on Stat Adjustment. You will see a window like in the picture below.
Statutory Adjustment for GST Late Fees, Interest and Penalty in Tally
Statutory Adjustment for GST Late Fees, Interest and Penalty in Tally
  • Now, in the List of Nature of Adjustments, select Increase of Tax Liability.
  • For the Additional Details, select Late Fees.
  • Now, you will see the classification of what we have selected on the top in the middle of the window.
  • On the debit side or By side, select Late Fees ledger. You can see here how to create ledgers in tally.
  • In the amount column, I am entering the amount as ₹100 for this example.
  • On the credit side, it will be the ledger for which you are paying late fees. In my case, I am entering CGST.
GST Late Fee Details in Tally
GST Late Fee Details in Tally
  • A small window will open up. In the taxable value field, enter ₹100 and press enter.
  • Press Enter a few times and save the journal entry for late fees in tally.
GST Late Fee Journal Entry in Tally ERP 9
GST Late Fee Journal Entry in Tally ERP 9
  • You will see a ₹100 extra in the CGST column in the balance sheet.

Congratulations! You have successfully created a late fee journal entry in tally.

Now, if you look in GSTR-3B in tally, you will easily see the late fee of ₹100 displayed in row 5.1 – Interest and Late Fee Payable.

GST Late Fee displayed in GSTR 3B in Tally
GST Late Fee displayed in GSTR 3B in Tally

Assume that you have paid the GST late fee online. We are going to pass the late fee payment entry in tally now.

GST Late Fee, Interest & Penalty Payment Entry in Tally ERP 9

  • Go to the payment voucher in accounting vouchers in tally.
  • Then press ALT + S for statutory payment options to open up.
  • Select GST from the type of duty/tax.
  • Then, select the period for which you are making the statutory payment or in our case for late fees, interest or penalty.
  • I am selecting the period of 1st March, 2020 to 31st March, 2020.
  • For the payment type – select Regular and press Enter.
  • On the debit side, select Late Fees ledger.
  • As soon as you select the late fees ledger, a small popup will open up for the list of types of payment – select the option for Late Fee.
  • Enter the amount of ₹100.
  • On the credit side, select Bank account through which you made the payment.
  • Enter the payment details in the bank allocations window.
GST Late Fee Payment Voucher in Tally ERP 9
GST Late Fee Payment Voucher in Tally ERP 9
  • Then, there is an option to provide the GST details in the bottom left of the window. Enter the GST challan details.
  • Press Enter and save the entry.

 

Congratulations! You have successfully created a GST late fee payment entry in tally.

Now, we are going to look at why statutory adjustment is used in tally.

Why Statutory Adjustment is used in Tally ERP 9

Along with statutory adjustment, there is another option in tally called statutory payment.

We have already used both of them in our examples in this post till now. That is like double entry for GST payment in tally.

But do you know, why are we using them?

The answer is because without using them, the entries will not get reflected in the GST returns in Tally.

Therefore, we are using statutory adjustments in tally. There is no other reason for this.

If you simply pass the GST journal or payment entries in tally, it will be accounted in tally but will not reflect in the GST returns.

So, in order to get it reflected in the GST returns, we are using these options which are specifically provided by tally after the introduction of GST.

GST Tax Payment Entry in Tally ERP 9 – Video

The video will be uploaded soon.

GST Tax Payment Entry in Tally ERP 9 – PDF

The PDF will be uploaded soon.

Conclusion

Once you know how to do the GST tax payment entry in tally, you will also be able to see where you can do the GST input and output adjustments in tally as well.

Input and Output GST adjustments are easy to make.

Just know that debit balance is your GST credit and credit balance is GST your liability. So, now whatever is more, you know what to do.

Still, I am a human being and I also can make mistakes.

So, if you have any questions, please feel free to ask them in the comments section below.

I reply to each and every comment.

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