Reverse Charge: Managing Purchases from Unregistered Dealers (URD) in Tally.ERP 9 Release 6

Last updated on August 24th, 2017 at 04:16 pm

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Shailesh Bhatt


  • Dear Sir,
    I am purchasing a same service from registered and unregistered dealer. How do I account for this?
    If I enable reverse charge in service ledger, even the registered dealers entry comes in reverse charge.

    Reverse charge should only be applicable after checking if dealer is unregistered. If he is registered, RCM flag should not matter. This is creating problems in entry.

    Please advise.

    • You are not required to configure Reverse charge in The Service ledger, based on the type of party it will select the transaction under reverse charge.

  • how to handle expense vouchers which have different tax rates, Like stationery has 12%, 18%, 28% so on with different expenses

    • You can configure GST Rates at the ledger level, and while making voucher press F12 and enable “Allow GST Rate modification” and provide the rates based on your requirement.

  • We have received a bill of supply towards retainer fee from our advocates who is REGISTERED under GST. Is it reverse charge? How to pass entries for such transactions? The bill of supply is dated 4.8.2017 and fees is for the month of July. Payment will be made on receipt of invoice.

    • As your Advocate is registered and you are also registered, Services by him falls under Reverse Charge and Advocate will issue a Tax invoice to you. Since Payment and Invoice are generated in August it should be declared in August month’s Return.

  • Dear Sirs,

    We are using Tally ERP 9 latest updated version. We are very clear about the unregistered purchase / supply and their entries. We have to make payment of Freight for various type for our inward material / services. As per RCM GTA are exempted from the same and we have to pay the GST on said transaction. Please guide step wise about the entries of said in tally and how GSTR will be reflected.

    Further to this purchase from unregistered dealer will be captured in which return ? And as per rules ITC cannot be utilized for payment of RCM liability. So how to bifurcate the liability on outward supply liability and RCM liability in payment of challan

    • Please refer the embedded video for step by step details. You can select GTA and create entry in voucher mode rest all will remain same.

  • I need to make sales to a company outside India. but sale of goods and service is made in India. How I will book entry in tally. Which one i need to select IGST or SGST & CGST . Our company arranges exhibition hall for foreign company . But in same state where that company belongs.

  • plz help me to pass the follwing entries. to record payment for various mobile bills to airtel. please provide step
    wise entry as I am new user of tally.
    2. how to record purchase import in euro.
    3. how to pass custom duty and clearing charges on that import

    plz confirm step wise details urgently

  • how to pass the entry of entry under (RCM) transportation charges paid.

    Mallikarjun shetty-Solapur

    • Please create Purchase Invoice and while taking a print change the title to Self Invoice for this purpose (In F12 while printing you can configure the same.)

    • please provide self invoice format for reverse charge booking under gst (unregistered dealers purchase)

  • Hi, In case purchases of small time supplies and purchases are directly being passed by Payment entries debiting the expense account e.g. Printing and Stationery (instead of passing Journals), how should we configure the expense account/tally to print the RCM Invoice?

    • Please enable GST in the printing & stationary ledgers and select Nature of transaction as “Purchase from Unregistered Dealer-Taxable” and provide the tax details, then it will consider the same in GSTR-2.

      • how to handle expense vouchers which have different tax rates, Like stationery has 12%, 18%, 28% so on with different expenses

  • in purchase entry with item how we show cartage and reverse charge on cartage and cartage cost collection in item

    • In Case your supplier is registered and he is providing you cartage services along with supply of material in that case reverse charge is not applicable, and cartage cost will be included in material cost before calculating GST. However if cartage is paid separately to URD which is not included in your purchase bill then reverse charge will be applicable. For which you need to configure Inventory values are affected in the Cartage ledger and select the item in the voucher and provide the value of cartage. Also you need to configure GST details for the cartage ledger.

  • How can we treat excise units on GST era.
    We have 3 excise units on the same name Praveen Polymers Excise unit 1, Unit 2, Unit 3.(3 Different Places)
    Can we treat One company on GST era.
    Kindly suggest Us.

    • You can manage all three units in a single company provided billing happens from single location and all three units are in same state and have single registration number.

  • we have 4 GST registration number for Mumbai, AP, GUJ & Rajasthan can we get the ITC of CGST, SGST of other states and i have read the above responses that we cannot able to get the ITC of other states apart from IGST.

    further Under RCM have we need to consider only Goods and services ? any other expenses comes under RCM ?

    as i stated we have 4 GST number in tally we need to create 4 companies separately or is there any other option.

    • For first question you cannot take input of other companies.
      For second question please refer your Tax consultant
      And for third question you need to create 4 separate companies in Tally.

  • As per the method suggested in the video (purchase voucher from URD), the stationery will be entered as a stock item in my books though it is not a stock-in-trade for me. I don’t want stationery to be entered into my stock register. What will be the method in that case?

  • I want to know that RCM method applicable only for unregistered person. What is treatment for composition dealer.

    • Composition Dealer is also a type of registered dealer hence no RCM applicable for such type of purchases.

  • How to make Margin base invoice for second hand material( Recycle Material )? eg. Empty glass bottle.

  • How to record a reverse charge for a service rendered by a transporter.
    i.e. Trader takes service from transporter to transport goods to recipient.

    1)Transporter does not pay gst, who will be liable to pay gst on freight expense.
    2) If supplier pays RCM on Freight and also bill in sales invoice then isnt it double taxation.

    Kindly show example for Reverse charge on Freight.
    Rahil Shah

    • Rahil,
      Thank you for commenting on our post.
      Reverse charge is a concept where recipient calculates tax and pays to department on purchases from unregistered dealer.
      The supplier is not supposed charge tax in his invoice since he unregistered.
      If he does then it is not a reverse charge scenario and the recipient pays tax to supplier and not the department.
      Therefore there won’t be a scenario of double taxation.

  • If I as GST registered party, purchase some raw materials and get it converted into finished goods(job work) by a unregistered party, what is my GST liability. Please advice.

    • During Job Work Process, material bought from registered party and transferred to job worker is not charged under GST. However your job worker will bill you for the services he rendered to you. This will be charged under GST and reverse charge will be applicable on it.

  • HI

    • Based on your accounting practice you can opt to use either vouchers to record such purchases.

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