How to Record Expenses with GST in TallyPrime (2024)

Your business willincurday-to-day expenses such as rent, telephone bills, Internet Bill, stationery expenses, and so on, to carry out the operations. If your business is GST registered, then these expenses aretaxable under GST, and therefore, you will have to record them accordingly. TallyPrime enables you to create an expense ledger and record expenses with GST in Purchase, Payment or Journal voucher.

Create an Expense Ledger

You will need tocreate an expense ledger under the Indirect Expenses account and set the GST Rate & Related Details and the type of expense. This ledger can be used torecord expenses with GST in Purchase, Payment, or Journal vouchers.

1. PressAlt+G(Go To) >Create Master>Ledgerand pressEnter.
   Alternatively,Gateway of Tally>Create> type or selectLedgerand pressEnter.
2. Enter theNameand group it underIndirect Expenses.
3. SetGST ApplicabilitytoApplicableand enter theHSN/SAC & Related Detailsas required.
4. UnderGST Rate & Related Details, enter the required details and setNature of Transactionas applicable.
5. Select theType of Supplyas required.
   
6. As always, pressCtrl+Ato save the ledger.

Record an Expense in a Purchase voucher

TallyPrime enables you torecord an expense with GST using a Purchase voucher. GST amount will be auto-calculated by selecting the tax ledgers while recording the voucher. The impact of the transaction will be visible undertheEligible for Input Tax Credit section of GSTR-3B.

1. Open thePurchasevoucher inAccountingInvoicemode.
   1. PressAlt+G(Go To) >Create Voucher> pressF9(Purchase).
      Alternatively,Gateway of Tally>Vouchers>F9 (Purchase).
   2. PressCtrl+H(Change Mode)and selectAccountingInvoice.

      If you have created multiple registrations in TallyPrime Release 3.0 or later, then to change the registration, press F3 (Company/Tax Registration) > type or select the Registration under which you want to create the voucher and press Enter.

2. Enter theSupplier Invoice No.andDate.
3. InParty A/c name, select the supplier’s ledger or theCashledger.
4. UnderParticulars, enter theexpense ledger, and specify theAmount.To learn how to create an expense ledger with GST applicability, click here.
   
5. Select the required tax ledgers.
   
6. Enter theNarrationif required. As always, pressCtrl+Ato save the Purchase voucher.

Now that you have recorded an expense with GST in Purchase voucher, you can see the transaction underEligible for Input Tax CreditofGSTR-3B.

Record an Expense in a Journal voucher

In TallyPrime, you can record an expense with GST using a Journal voucher. You need to enter the GST amount as it will not be auto-calculated. The impact of the transaction will be visible undertheEligible for Input Tax Credit section of GSTR-3B.

1. 1. PressAlt+G(Go To)>Create Voucher> pressF7(Journal).
      Alternatively,Gateway of Tally>Vouchers> pressF7(Journal).

      If you have created multiple registrations in TallyPrime Release 3.0 or later,then to change the registration, pressF3(Company/Tax Registration) > type or select the Registration under which you want to create thevoucher and pressEnter.

2. To add the supplier invoice number, pressF12(Configure).
   1. PressF12(Configure) >Show more configurations: Set this option toYes>Provide Reference No. and Date: Set this option toYes.
      
3. UnderParticulars, debit the expenses and tax ledgers, credit the party ledger.To learn how to create an expense ledger with GST applicability, click here.
   
4. SetProvide GST DetailstoYesandenter theParty Details.
5. Enter theNarrationif required. As always, pressCtrl+Ato save the Journal voucher.

Now that you have recorded an expense with GST in Journal voucher, you can see the transaction underEligible for Input Tax CreditofGSTR-3B.

Record an Expense in a Payment voucher by selecting Party Details

In TallyPrime, you can record an expense with GST using a Payment voucher and enter the party details towards which the payment has been made.You need to enter the GST amount as it will not be auto-calculated.

1. PressAlt+G(Go To) >Create Voucher> pressF5(Payment).
   Alternatively,Gateway of Tally>Vouchers>pressF5(Payment).
   

   If you have created multiple registrations in TallyPrime Release 3.0 or later,then to change the registration, pressF3(Company/Tax Registration) > type or select the Registration under which you want to create thevoucher and pressEnter.
   

2. PressF12(Configure) to provide supplier invoice or reference no. and date, and party details for GST.
   1. PressF12(Configure) >Supplier Inv/Ref No.andDate: set this optionto YesandProvide Party details for GST: set this option toYes.
      
3. Enter theSupplier Inv/Ref No.
4. InAccount, select the cash/bank ledger and pressEnter. TheParty Detailsscreen will appear, enter the required details.
   
5. UnderParticulars, select the expense ledger and the tax ledgers. To learn how to create an expense ledger with GST applicability, click here.
6. As always, pressCtrl+Ato save the Payment voucher.

Now that you have recorded an expense with GST in Payment voucher, you can see the transaction underEligible for Input Tax CreditofGSTR-3B.