This document provides instructions for setting up and using VAT functionality in Tally ERP 9. It includes steps for enabling VAT, creating VAT classifications, setting up purchase, sales, input and output VAT ledgers, and creating vouchers. VAT concepts like input tax credit are also briefly explained. The document aims to guide users through the basic configuration needed in Tally to manage VAT transactions and reporting.

1. Associate Professor
MBA Dept., GIVC
And
Teaching Associate ,
Academy Of Basic Concepts Zone (ABCZ)
Madanapalli
brmurthy.mba@gmail.com

2.  VAT Concept
 Classification
 Configuration
 Creation of Ledger and Voucher
 Entry for Single and Malty Ledger
 VAT on Imports And Exports
 Vat Computation and Reports

3. VAT Concept
VAT is based on the value addition to the goods, and
the related VAT liability of the dealer is calculated by
deducting input tax credit from tax collected on sales
during the payment period (say, a month).

4. Tally-ERP
 Create Company
 Go to F11
Enter the Statutory Taxation (Company Features)
Or
F3 Press
Result Window
Statutory and Taxation Features

5. Result Window
Company: Murthy.com
Set Enable Value Added Tax (VAT) : Yes
Enter VAT TIN No:123456789
Enter Inter State Sales Tax No:987456321
Enter PAN No: 543219876
Press : Yes
 Note : TIN number is used to identify dealers registered under
VAT. First two digits of TIN indicate the issued state code.
However, Other 9 digit of TIN creation may differs by state
governments.

6. Classification
Go To :Gateway of Tally> Display>Statutory
Info>VAT Classification
Note: The Classifications of Goods Depending on
the Types of Business, Type of transaction and
statutory Requirement Of States.
Nature of Firm Registration: Lim. Com Vs Society or Trust
Currency Transferred : Future Expectations and Transferred by
Community Development

7. List of Classification
 Consignment : Inward/Outward
 Import and Exports
 Interstate :Purchases /Sales
 Input VAT : 1%, 4% and 12.5%
 Output Vat: 1%,4: and 12.5%
 Output VAT: 1% on Works Contracts
 Output VAT: Special Rate-21.33%,22.25%,32.55%, 33%, 34% and
70%
 Output VAT: Special Category Goods
 Purchases Special Rates-21.33%,32.55%,34% and 70%
 Purchases: Capital Goods-4%,12.5%
 Purchase Casual Delores/Un register Delores
 Purchase :Others
 Purchase: Exempt
 Sales: Exempt

8. Ledger Creation
 Purchase Ledger
 Sales Ledger
 Input VAT Ledger
 Output VAT Ledger
 Party Ledger

9. Purchase Ledger
 Goto Gateway of Tally>Account
Info>Ledger>Create
Enter Name: Purchase@12.5%
Under: Purchase (Select List of Account in Left side)
Set Inventory: Yes (Select Yes)
Method : Based on Value
Accept : Yes
Note: Create Similarly required Ledgers

10. Customer Ledger Creation
 (To Create Sundry Debtors Ledger)
 Ensure that in F12:Master Configuration option use Addresses for Ledger
Accounts is set to yes.
 Enter the Name as Enterprise
 Select the Sundry Debtors under the field
 Set Maintain Balance bill-By-bill to yes and Enter the default Credit Period
 In the Mailing Details
The Name Will be Displayed as Enterprise
Enter the Address Details
 Tax Information section Enter the VAT TIN Number
 Accept The Sundry Debtors Ledger

11. Stock Items Ledger Creation
 Goto Gateway of Tally>Inventory Info>Stock
Items>Create
 Enter the Name: Exercise Books
 Select the Group: Primary in the Under Field
 Unit Measurement : Numbers (Nos)
 In the Unit Commodity field: VAT Commodity
 Enter the Rate Of VAT as : 0
 Set NHIL Exempted to yes as it is ZERO rated
 Enter the Opening Balance as 250 Nos and Rate as 22
 Press : YES (Acceptency)

12. Creation of Vouchers
Go to: Gateway Of Tally>account Vouchers>F8: Sales>
Select Sales As the Voucher Type
• Enter the reference Number in the Ref Field
• Select Sales-ZERO Rated Ledger
• Select the Name Of Item as Exercise Book from Kist
• Enter the Quantity as 200 and Rate as 35
• Statutory Details Set :NO
• Accept the default bill details