TALLYPRIME GST ACCOUNTING
GST Accounting Entries in TallyPrime Practical examples, voucher logic, reconciliation checks and a printable month-end checklist 2026 reference guide | Indian GST | Designed for accountants, learners and small businesses
This guide explains the accounting logic behind commonly used GST transactions and how to verify their treatment in TallyPrime. Examples are simplified and illustrative: confirm the applicable rate, place of supply, eligibility for input tax credit (ITC), invoice details and current legal requirements before posting entries. For additional TallyPrime learning resources and practical accounting guidance, see TallyMantra.
What you will learn • Set up GST masters and select suitable voucher types. • Understand local versus interstate tax calculations with worked amounts. • Record common sales, purchases, returns, advances and adjustments. • Review GSTR-1 and GSTR-3B, then complete a monthly control checklist.
Quick navigation 01 Setup | 02 Sales entries | 03 Purchase entries | 04 Adjustments | 05 Special cases | 06 Returns and reconciliation | 07 Checklist | 08 Practice
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01 | Start with the right GST setup Before recording GST transactions, enable GST in the company features and maintain the correct registration details. Configure party ledgers, purchase and sales ledgers, relevant stock items/service ledgers, HSN/SAC information and applicable tax rates. TallyPrime uses this information to classify and calculate tax in vouchers.
Configuration checklist □ Company GSTIN, state, registration type and effective dates are accurate. □ Customer and supplier GSTINs, registration types and state/places of supply are maintained. □ Tax classification and HSN/SAC are checked for each relevant item or service. □ Sales, purchases and CGST/SGST/IGST ledgers are set up consistently. □ Invoice numbering, credit/debit note series and financial period are correct. □ Masters are tested using a sample invoice before entering a full month.
Tax calculation at a glance Situation
Example on ₹10,000 taxable value
Intra-state supply, 18% total GST
CGST 9% = ₹900; SGST 9% = ₹900; invoice ₹11,800
Inter-state supply, 18% GST
IGST 18% = ₹1,800; invoice ₹11,800
Actual rate and tax type depend on the nature of supply and place-of-supply rules. Never use the above 18% rate as a blanket assumption.
Choosing the voucher Sales: customer invoice / outward supply. Purchase: supplier invoice / inward supply. Credit note: sales return or permitted reduction. Debit note: purchase return or permitted adjustment. Receipt/Payment: settlement. Journal: appropriate accounting adjustments when supported by the transaction and configuration.
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02 | Sales entries: worked examples Example 1 — Local taxable sale Goods sold within the same state: taxable value ₹20,000; illustrative GST 18%. Illustrative ledger effect: Customer Dr ₹23,600; To Sales ₹20,000; To Output CGST ₹1,800; To Output SGST ₹1,800.
Example 2 — Interstate taxable sale Goods sold to a customer in another state: taxable value ₹15,000; illustrative GST 18%. Illustrative ledger effect: Customer Dr ₹17,700; To Sales ₹15,000; To Output IGST ₹2,700.
Example 3 — Business-to-consumer cash sale Local cash sale: taxable value ₹5,000; illustrative GST 12%. Illustrative ledger effect: Cash Dr ₹5,600; To Sales ₹5,000; To Output CGST ₹300; To Output SGST ₹300.
Example 4 — Sales return with eligible credit note Customer returns goods from an earlier intra-state sale: taxable value ₹4,000; original rate 18%. Illustrative ledger effect: Sales Returns Dr ₹4,000; Output CGST Dr ₹360; Output SGST Dr ₹360; To Customer ₹4,720.
TallyPrime verification points • Use the relevant sales voucher with correct party and supply details. • Check the tax analysis before accepting the voucher. • For a credit note, connect the adjustment to the original invoice where required. • Review GSTR-1 classification, B2B/B2C treatment and document details.
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03 | Purchase entries and eligible ITC Example 5 — Local taxable purchase Inventory purchased locally: taxable value ₹12,000; illustrative GST 18%; assume ITC eligibility. Illustrative ledger effect: Purchases Dr ₹12,000; Input CGST Dr ₹1,080; Input SGST Dr ₹1,080; To Supplier ₹14,160.
Example 6 — Interstate taxable purchase Inventory purchased from another state: taxable value ₹25,000; illustrative GST 18%; assume ITC eligibility. Illustrative ledger effect: Purchases Dr ₹25,000; Input IGST Dr ₹4,500; To Supplier ₹29,500.
Example 7 — Purchase return Local purchase returned: taxable value ₹2,000; original GST 18%, previously recorded as eligible ITC. Illustrative ledger effect: Supplier Dr ₹2,360; To Purchase Returns ₹2,000; To Input CGST ₹180; To Input SGST ₹180.
Example 8 — Purchase expense with blocked/ineligible ITC Business expense ₹10,000 + GST ₹1,800 where ITC is not available under the applicable rule. Illustrative ledger effect: Relevant Expense/Asset Dr ₹11,800; To Supplier ₹11,800. Do not claim an input tax credit merely because GST appears on the invoice.
ITC is not automatic Verify supplier tax invoice particulars, receipt of supplies, statutory conditions, return information and credit restrictions. Compare purchase records with GSTR-2B or applicable portal data before determining eligible credit. The legal treatment can vary by transaction.
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04 | Payments, discounts and adjustments Example 9 — Customer pays an earlier invoice A customer clears an outstanding receivable of ₹23,600 by bank transfer. Illustrative ledger effect: Bank Dr ₹23,600; To Customer ₹23,600. Do not book GST a second time merely on invoice collection.
Example 10 — Supplier payment Payment of a previously booked supplier invoice amounting to ₹14,160. Illustrative ledger effect: Supplier Dr ₹14,160; To Bank ₹14,160. The original purchase and eligible tax were already recorded.
Example 11 — Discount shown on tax invoice Taxable value after eligible invoice-level discount ₹9,000; illustrative GST 18%. Illustrative ledger effect: Customer Dr ₹10,620; To Sales ₹9,000; To Output CGST ₹810; To Output SGST ₹810.
Example 12 — Post-sale price reduction A later discount or rate difference does not always reduce GST automatically. Illustrative ledger effect: Assess whether the legal conditions for tax adjustment are met; use the appropriate credit-note treatment and link documentation before adjusting output tax.
Avoid these common errors • Posting GST twice when money is received or paid. • Treating every supplier GST amount as eligible ITC. • Changing the tax base without validating credit-note requirements. • Using journal entries to conceal misclassified or incomplete invoices. • Failing to reconcile GST ledgers to supporting return summaries.
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05 | Special cases requiring care Reverse charge mechanism (RCM) Certain notified supplies require the recipient to discharge GST under reverse charge. Determine whether RCM actually applies, identify the tax period, record the relevant liability, and evaluate ITC separately under applicable conditions. Do not treat every unregistered-supplier purchase as automatically subject to RCM.
Advances and cancellation GST treatment of an advance can differ between goods and services and under current notifications. Review the applicable rules before creating an advance-related tax entry. Reconcile advances, final invoices and refunds without double-counting.
Exports, SEZ and zero-rated supplies These transactions need the correct registration, invoice type, place-of-supply information and relevant LUT/bond or tax-payment treatment. Confirm supporting documents and current conditions before recording or reporting.
Imports Imports can involve customs duties, import IGST and special documentation. Separate the cost of goods or assets from eligible input credits and preserve the bill of entry and tax-payment evidence.
E-invoice and e-way bill Applicability depends on the current legal thresholds and nature of the transaction. Confirm eligibility and ensure invoice details are consistent across TallyPrime, IRP/e-invoice records, transport documents and GST returns.
Worked mini-scenario Scenario: A taxable supplier invoice is ₹50,000 plus 18% GST. The business first identifies whether the supplier is in the same state and whether credit is eligible. Same-state illustration: Input CGST ₹4,500 plus Input SGST ₹4,500; otherwise IGST ₹9,000 may apply, subject to the place-of-supply analysis. The invoice total is ₹59,000 in either simplified case.
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06 | Prepare, review and reconcile GST returns GSTR-1: outward supplies Review sales invoices, credit/debit notes, GSTINs, document numbers, HSN/SAC summaries and exceptions. In supported TallyPrime releases, users can review, upload, reconcile and file GSTR-1 using portal-connected workflows or supported alternative export methods.
GSTR-3B: summary and payment Compare turnover and output tax in books with applicable return figures. Review eligible and ineligible ITC, reversals, reverse-charge liability, prior-period adjustments and the final tax-payment position. TallyPrime supports comparisons between books and portal values for GSTR-3B.
Practical reconciliation table Control
What to compare
Outward tax
Sales register vs GSTR-1 vs GSTR-3B
Input tax
Purchase register vs GSTR-2B vs GSTR-3B
Credit notes
Return/adjustment register vs GST return reporting
Tax payment
Electronic cash/credit ledgers and books
Exceptions
Rejected, pending, missing or misclassified documents
When numbers do not match • Find the voucher-level difference and identify the period affected. • Check GSTIN, place of supply, tax rate, document type and tax amount. • Correct genuine book-entry errors using an auditable process. • Evaluate legal amendment/reversal requirements before changing filed return data. • Retain evidence of why a mismatch was resolved or carried forward.
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07 | Printable monthly GST filing checklist Use this as a working-paper checklist. Assign an owner and completion date to each item.
Before preparing returns □ All sales and purchase invoices entered for the period □ GSTIN, supply state, HSN/SAC and tax rate spot checks completed □ Credit notes, debit notes, advances and returns reviewed □ Missing/duplicate invoice number check completed
Reconciliation □ GSTR-1 checked against sales register □ GSTR-2B checked against purchase register and ITC working □ RCM, blocked credits, reversals and prior-period items examined □ Books-to-GSTR-3B variance explained and documented
Before filing □ Return classification/exceptions resolved □ Portal values checked with books and support files □ Tax-payment position reviewed and authorised □ Return filing acknowledgement and working papers archived
Sign-off Prepared by: ____________________ Reviewed by: ____________________ Return period: __________________ Filing date: ____________________
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08 | Practice questions with answers 1. A sale of ₹8,000 at 18% GST is within the same state. What is the total invoice? Answer: ₹9,440: CGST ₹720 + SGST ₹720.
2. A purchase of ₹30,000 at 18% is interstate. What is the GST? Answer: IGST ₹5,400; invoice ₹35,400, subject to correct supply classification.
3. When a customer pays an already recorded invoice, do you add output GST again? Answer: No. The receipt settles the receivable; do not double-book invoice GST.
4. Does GST on every expense become ITC? Answer: No. Eligibility depends on statutory conditions and restrictions.
5. Which return primarily details outward supplies? Answer: GSTR-1.
6. Which return includes summary tax liabilities and ITC reporting? Answer: GSTR-3B.
7. What should be checked before filing if a supplier invoice is absent from GSTR-2B? Answer: Investigate the document, supplier reporting and applicable ITC rules; do not assume credit.
8. Should a sales return simply be deleted from the books? Answer: No. Record an appropriate credit note or adjustment with an audit trail.
9. How should a tax rate mismatch be handled? Answer: Verify actual classification and applicable rate, then correct masters and affected vouchers appropriately.
10. What is the first step when books and portal values differ? Answer: Locate the exact transaction-level variance and the period.
Reference and accuracy note Prepared as an educational resource. Software screens and statutory requirements can change. For current TallyPrime steps, consult the official TallyHelp documentation on GST purchases, GSTR-1 and GSTR-3B. For legal interpretations, check official GST guidance or a qualified tax professional. © 2026 TallyMantra | Educational handout. Example amounts are illustrative.
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