How to Claim Input Tax Credit on Business Expenses

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Pugal T & Yarab A


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  • In tally,if we generate Invoice of service the description of goods is mentioned in Format instead of description of service. Can we add details of service in the sale voucher,if not please add in software.

  • Dear Sir, Where and how should we take/ avail credit balance available form our previous VAT return. How to adjust the same? How to enter it in tally? IN GSTR 3B there is no colomn to enter Opening balance.

  • If transporter is GTA (Goods Transport Agency), then RCM is applicable. Otherwise RCM is not applicable. Create Freight Ledger enbled GST and RCM applicable in Direct Expences

  • Recently I had purchased Tally software from our regular dealer he has given me the GST bill and how can I claim the GST and make entry in Tally
    Will the Tally software be the asste for the company or it’ll be expenses

    • You can put tally software in books of accounts as asset and can claim gst paid on tally as itc.
      I further you can claim depriciation of tally @ 15%
      But for income tax purpose you can claim 100% as expence….as softwares are royalty in income tax act…

  • Sir, we have inter state purchase and pay freight charges. The transporter doesn’t include GST on payment.should we pay GST on RCM. Then how to make this entry in tally.

    • Hey surinder first of all change transporters gst details in ledger and mark yes to reverse charge. If it is not showing then mark yes to reverse charge in f12 features and then of transporter. Create a ledger of transport service as expenses. After that enter purchase as accounting invoice.and in tax analysis your rcm will be shown. In features of purchase f12 on gst feature of gst tax analysis. And give print command your self invoice will get printed. Now create another ledger of tax on reverse charge in current assets. And go to journal and click stat adjustment gst inc. Of tax liablity then purchase under reverse charge. After that debit tax on reverse charge and credit igst for interstate transporter or cgst sgst for intrastate transporter. And after that pay gst in bank. And go to payments. Click payment adjustment and select period and recipiet liability and select igst or cgstsgst and record payment. And then go to journal and stat adjust and take input credit by selecting it and purchase under reverse charge. And debit igst or cgstsgst and credit tax on reverse charge. Check your gstr3b and gstr 2.

      • This is ok sir but in tally for rcm one entry system must be generated why too much entries to be done and can not be done by comman men

  • Thanks Sir, Very Nicely explained.
    I have a query regarding NIL Rated Supply. I am manufacturing Bread (Nil Rated). Most of Inwards supply is also Nil Rated (Atta, Maida etc.), some of the inwards supply like Yeast and packing material is having GST. Can I claim ITC on these items.
    Further I am selling waste boxes or polybags, on which i charge GST according to the %age prescribed by the department. Can I adjust the said ITC with the GST Charged on these waste products.

    • If products are used in the course or furtherance of business, ITC will be allowed. In case, of inputs used for exempt supplies , ITC will not be allowed.


  • Sir please share a video for passing the business expenses in tally with expenses invoices having GST number

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