Stock Transfer – Branch Accounting under GST in tally erp 9

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Stock transfer is an important factor of business having multiple branches in different locations. Stock transferring between branches cannot be considered as sale as it is just movement of goods between branches of same business. Stock transfer may be the supply goods to a branch where that item is not available.  This may be inter state or intra-state. Inter state stock transfer means stock movement to a branch situated in another state.

Example Scenario : ABC Ltd  is a business of Mobile Trading in Kannur,   Kerala it has three branches, The details as follows

Company  Location State GSTIN Nature
ABC Ltd Kannur Kerala 32AADCB2230M1Z2 Head Office
ABC Ltd Calicut Kerala 32AADCB2230M1Z2 Branch Office
ABC Ltd Cochin Kerala 32AAACI1681G1ZY Branch Office
ABC Ltd South Delhi Delhi 07AAACB5343E1Z3 Branch Office

The business in each location transfer goods from one location to another. Let’s see how these inter branch transactions are entered in tally erp 9 under GST law.

Group creation for Stock transfer

For Branch accounting in tally erp 9, You need to create a group for easy classification and identification of inter branch transactions. You can put all inter branch transactions under sales and purchase directly if needed. But this will create problems in identifying stock transfer & sales /purchases. When you create a group for stock transfer, It will show separately in Profit and loss account and do not mix up with purchase and sale.

Group Creation in Head office’s Book of accounts.

Accounts info > Group > Create

Stock Transfer From Branch

Under : Purchase Account

stock transfer from branch

Stock Transfer to Branch

Under : Sales Account

stock transfer to branch

Group Creation in Branch’s Book of Account

Stock Transfer to Ho

stock transfer to HO

Stock Transfer From HO

Stock transfer from HO

Ledger Creation For stock transfer

Accounting Info > Ledger > Create

How to create ledger in tally erp 9 ?

In Head office Book – Following ledger need to be created

Create Ledger to account for accounting  stock from branches = Stock transfer Inward 

stock transfer inward ledger creation in HO book

Create a Stock Transfer outward Ledger account for accounting stock transfer to Branch.

stock transfer outward ledger creation for ho

Create all Branches Ledger Under Group  Branches & Division  in HO books

branch ledger in ho book

In the same way create ledger

Abc Ltd-Calicut – Under Branch/Divisions

Abc Ltd-Delhi  – Under Branch/Divisions

In Branch’s Book – Following ledger needs to be created.

Create a ledger Stock Transfer inward to account stock from HO

Stock transfer inward for branch from HO

Create a Stock Transfer Outward Ledger to account stock to Head office.

Stock transfer outward ledger to

A head office account under Branch/Division- For Ex ABC Ltd -HO

Head office Ledgers

Note: Create a separate voucher type for Branch transfer entry  Under sales & Purchase if you needed, So that your entries will stand out from sales and purchase vouchers. In This example I have note used voucher type.

Learn More : creating voucher type

Accounting entries of stock transfer In the Books of Head Office & Branch

Now let’s learn the accounting entries of stock transfers, What are the entries in the books of Head office and branch in each cases.

Goods transfer intra-state branch with same GSTIN

Intra-state meaning within the state, or In same state. If the GSTIN of the Ho & Branch is same there is no Tax is chargeable Under GST.

Example : Abc Ltd  Transferred 10 Nos  of Mobile charger  @ 250 to  it’s Branch Abc Ltd-Calicut

As We know ABC Ltd calicut is the branch office with similar GSTIN.

How to enter Goods transfer to branch with Same  GSTIN in Tally erp 9 ?

In the books of HO

Accounting Voucher > F8 Sales

How to enter gst sales in tally erp 9 ?

Stock transfer entry with same gstin branch

During this entry You should Select tax classification details as ” Branch Transfer Outward ” as shown in the below image.

tax classification details

If this is not appearing in your voucher entry screen do the following.

Click on F12 Configure

Allow Modification of tax details for GST : Yes

f12 configure

This will Automatically displayed.

Tax analysis

If you view tax analysis  by clicking Tax analysis button in sales voucher or use Shortcut Alt +A, you will find the tax details as shown below.

tax analysis of branch transfer with same gstin

The system will tell you no tax is need to be charged.

Now in the books of Branch office

The same transaction is become stock Transfer from HO  In Branch’s book .Let’s see how this is entered.

Abc Ltd- Calicut   Received  10 Nos  of Mobile charger  @ 250 From HO  Abc Ltd

This is recorded in Purchases Voucher by Branch office.

Accounting Voucher > F9 Purchase

How to enter Purchase in tally erp 9

Stock transfer inward from same gstin branch

Select tax classification details as ” Branch Transfer Inward”.

Branch transfer inward - nature

In the Tax  Analysis you will find the same.

Goods transfer to interstate Branch with different GSTIN Tally Entry.

Business May Have branches in different states other than the state of its Head Office exist. For branches in other states will have a separate Registration and GSTIN. In such Case we will Have transactions like stock transfers  to Head office and Head office to branches. These transactions are taxable and charged to IGST under GST.

Example : ABC Ltd- Delhi  Transferred  25 Nos of Mobile phone to ABC Ltd ( HO)  @ 15000. Let’s see How this is accounted.

In The books of HO

Accounting Voucher > Purchase

Party name: Select the interstate branch office.

Purchase Ledger : Stock transfer inward.

Select Tax Ledger: IGST

Interstate stock transfer from HO

Important: Make sure that you had nothing selected in Tax classification Details

Tax classification for interstate stock transfer

In the book of Branch Office

Stock Transfer to Head office  ( Inter-state)

Stock transfer to branch igst

Tax classification DetailsTax classification for interstate stock transfer

How to enter Goods transfer to branch with Differnet  GSTIN in Tally erp 9 ?

Under GST Law Intra-state transfer is taxable only when the BRANCH OFFICE have a distinct GSTIN other than HO. In such case ,Such branch office is considered as a separate entity nd chargeable to tax as buyer. CGST & SGST are chargeable in this case.

Example: ABC Ltd ( HO) send 100 No memory cards to ABC Ltd cochin @ 300 each.

In  Branch’s Book

Accounting Voucher > Purchase

Intra state stock transfer with different gstin

 

Tax classification details

 

Tax classification for interstate stock transfer

In HO books

Accounting Voucher >Sales

Int

Tax classification details

Tax classification for interstate stock transfer

Reports of Stock transfer in tally

We have created a separate group to place the stock transfer ,So that you can segregate stock transfer from sales & Purchase in your report.

For example we can take the Profit and loss account of HO.

Gateway of tally> Profit & Loss account.

PROFIT AND LOSS ACCOUNT

 

See the Stock transfer from branch & Stock transfer to Branch separately.

Display > Statutory Reports > GSTR reports ( GSTR-1,2-3B)

You will find the  following.

Only stock transfer  of interstate & intra state with different GSTIN than HO is charged to tax payable.

Branches with same GSTIN of HO ‘s stock transfer are not charged to tax.

Display > Statutory Reports > GSTR-2.

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