Creating a Purchase Ledger for VAT

The following additional fields pertaining to VAT can be seen in the Ledger entry screen.

Go to Gateway of Tally > Accounts Info > Ledger > Create/Alter

Used in VAT Return

Set this to Yes if you wish to select VAT/Tax class for this Ledger.

Note: Tally gives the flexibility to the user to either have the classification selected in the Ledger Master tagged to all transactions Or select different classifications each time during voucher entries. For more details refer Vouchers and Transactions.

The rest of the Ledger creation process is the same as in default Tally.

In the above example we have selected a VAT classification of 4%.

VAT classification - Purchase-Exempt

Let us take an example of a VAT exempted transaction below.

Used in VAT Returns

Set this to Yes and select Purchases - Exempt from VAT/Tax class for this Ledger.

Accept the screen to save.

Creating a Supplier ledger

Create a ledger for the Supplier from whom you are buying the VAT exempted item:

Note:

The TIN or

Sales Tax number of the creditor whichever applicable needs to be entered in the Ledger.

If VAT is not enabled for your company, the TIN/Sales Tax No. field will be replaced by Sales Tax No.

To learn about the actual transaction, refer to Creating Purchase Voucher (As Invoice) for VAT section.