GST stand for Goods and Services Tax which is levied on almost all the good and services supplied in India. Generally, a business is required to charge GST on all the goods and services supplied by it if its turnover is over the limit as prescribed by respective GST laws. We can also do accounting fRead more
GST stand for Goods and Services Tax which is levied on almost all the good and services supplied in India. Generally, a business is required to charge GST on all the goods and services supplied by it if its turnover is over the limit as prescribed by respective GST laws.
We can also do accounting for GST in Tally by enabling it from the company features.
The steps to enable GST and perform GST accounting in Tally are as given below.
Enabling GST in Tally
GST can be enabled in Tally from the ‘Company features’ menu which opens just after the creation of a company. There is an option called ‘Enable Goods and Services Tax (GST)’. You have to enter ‘Yes’.
If the company is already created and the GST was not enabled earlier, then just press F11 and select the company for which you want to enable GST. The ‘company features’ menu will open again, from there you have to enter ‘Yes’ beside the ‘Enable Goods and Services Tax (GST)’ option.
In both cases, this menu will open:
Do have look at the details I have filled in. You have to:
- Select the State in which your business is.
- Registration type is Regular in most cases.
- Keep the ‘Assessee of another territory’ option at ‘No’, if your business operated from one state only.
- Enter your 19-digit GST number.
- Periodicity can be set to ‘Monthly’ or ‘Quarterly’ as per the turnover of the business. ‘Quarterly’ preferred.
- Keep the E-way bill option at ‘No’ if the E-way bill is not required.
- Keep the ‘Set/Alter GST rate details’ option at ‘No’ if you want to charge different goods at different GST rates. If GST rates are set up from here, it will be uniform for all goods and services.
- Keep the rest of the options as shown in the above image.
These settings are enough if you are to just practice GST in Tally.
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Drawings of goods The drawings of the goods, in a business, take place when the owner/partner of a business withdraws goods for their personal use. It's hence called drawings as it reduces the capital invested by the owner(s). It's also called the withdrawal account. The drawings are generally madeRead more
Drawings of goods
The drawings of the goods, in a business, take place when the owner/partner of a business withdraws goods for their personal use. It’s hence called drawings as it reduces the capital invested by the owner(s). It’s also called the withdrawal account.
The drawings are generally made for cash or stock by the owner/partner and the relevant account is thus reduced causing the adjustment done on the owner/partner’s capital at the cost price.
Journal entry
The journal entry for the goods withdrawn for personal use will be as follows:
Explanation via rules
The drawings account is debited because it decreases the balance of the capital account. Whereas, the purchases account is credited as it causes a reduction in the purchases account.
As per the modern rules of accounting, we credit the decrease in assets, thus, the purchases account is credited. Whereas, the withdrawal account when increased is debited. Therefore, the drawing account is debited here.
As per the golden rules of accounting, “debit what comes in and credit what goes out.” Hence, the purchase account is credited. And, “if any expense or loss is incurred for the business, the expense or loss account shall be debited“. Thus, the drawing account is debited.
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