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How to record non creditable( input tax credit)VAT purchase in Tally.ERP9?

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Usually a VAT dealer avail input tax credit on his purchases.But there are purchase transactions which may not want to take credit of VAT paid through purchase bills. In such case how to record such Purchases.

This tutorial aiming for Tally ERP 9 Release 5 and above users

Purchase 100 Ltr Kerosene @ 50 / Ltr from

Step1

Activation of VAT in Tally ERP 9

F11 Features > Statutory & Taxation.

Statutory & taxation configuration

Step2

Create a purchase ledger with ‘Non Creditable Purchase – Special Goods’ as the nature of transaction.

Let’s Create a Purchase Ledger  with Non creditable purchase.

Go to

Gateway of Tally >Accounts info>Ledger >Create

Name : Name the purchase ledger name.

Under : Purchase Account.

Is VAT CST Applicable : Applicable

Set/Alter VAT details : Yes

You will get  a Tax/Rate details screen.

Under transaction info

Nature of transaction : Purchase Non Creditable.

Purchase rate details in Ledger creation screen

Press enter and save , Accept the ledger creation screen also.

Non creditable Purchase  transaction entry.

Go to

Gateway of Tally >Accounting Voucher> F9 Purchase.

Enter Purchase Voucher As Usual

Enter Supplier Invoice No

Enter Supplier Name:

Select the Purchase Ledger, we have created above.

Select the stock item, Quantity & Rate.

Select the input VAT Ledger.

Purchase Entry for Non creditable bills

VAT Report of Non creditable purchase transactions

Now Lets Check the VAT Report.

Go to

Gateway of Tally>Display>Statutory Report>VAT >Form 231 ( Maharashtra).

VAT Report Form 231

Tax paid on non-creditable purchases will not will be available for ITC (Input Tax Credit). Tax amount is included in the assessable value.

Comments (2)

  • How can we journalize fixed assets purchase throw Bank Installment or cash installment with the suppliers.

    Reply
    • You can either book fixed asset purchase through journal voucher or using purchase voucher by enabling option In( F12: Configure button set Allow Expenses/Fixed Assets in Purchase Vouchers option to Yes.)
      Assume that you are accounting using a journal voucher.
      gateway of tally>accounting voucher>F7 Journal
      Debit : Fixed Asset
      Credit : Supplier.

      Each time when you make payment to supplier by installment, pass a payment entry

      for cash /bank payment
      gateway of tally>accounting voucher>F5 Payment

      Supplier a/c ….dr
      To, cash/bank

      Reply

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