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Transferring Tax Credits of VAT, Excise and Service Tax to GST in TallyERP.9?

You can record a journal voucher to transfer the closing balance of tax credits of VAT, additional tax, cess, surcharge, CENVAT, service tax, krishi kalyan cess and special excise duty/ additional excise duty as opening balance under GST.

As GST is a new tax structure, the tax credit of previous tax regime will not be automatically carried forward to the GST account. Based on the date from which you want to maintain the books of accounts under GST, you need to carry forward the tax credit to state/ central tax by recording a journal voucher.

Recording a journal voucher

The tax credit of service tax, krishi kalyan cess and CENVAT has to be transferred to the Central Tax Ledger. The tax credit of VAT, additional tax, surcharge and cess has to be transferred to the state tax ledger. Hence, two separate journal vouchers have to be recorded to account for the opening balance of central and state taxes.

To record a journal voucher

Go to Gateway of Tally - Accounting Vouchers - Journal: F7

Click J: Stat Adjustment.

In the State Adjustment details screen, select options as shown below:

Nature of adjustment - Opening Balance

Transfer the tax credit of Service Tax and CENVAT to Central tax ledger as shown below:

Entering the tax credit as ledger opening balance for a new user or new business starting from 1st July 2017.

You can enter the balance f tax credit as the opening balance in central tax and state tax ledgers, when your books beginning date is on 1st July, 2017. However, it is recommended to record a journal voucher as the tax credit can be transferred on or after 1st July, 2017. Enter the closing balance of:
  • VAT or VAT with surcharge/ cess/ additional tax as the opening balance (debit balance) for state tax ledger.
  • CENVAT, service tax and krishi kalyan cess as the opening balance (debit balance) for central tax ledger. 
The opening balance entered for central tax and state tax/ UT Tax in ledger master or journal voucher is a book entry and will not reflect in the reports. (Original Article - Tally Solutions)

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