https://help.tallysolutions.com/docs/te9rel64/Tax_India/VAT/journal_vouchers/BR_Reverse_Input_Tax.htm

Reversal of Input Tax (VAT)

Reversal of input tax can be recorded by creating a journal voucher. Use Reversal of Input Tax as the Nature of Adjustment and debit the expenses under the group Indirect Expenses .

To create journal voucher to reverse the input tax

1. Go to Gateway of Tally > Accounting Vouchers > F7: Journal .

Note: You can create a journal voucher from Gateway of Tally > Display > Statutory Reports > VAT > select the VAT or CST form.

2. Click J : Stat Adjustment .  In the Stat Adjustment Details screen,

o Select the option VAT in the Type of duty/tax field.

o Select the option Reversal of Input Tax in the Nature of adjustment field.

o Select the option Inter State Stock Transfer in Additional Details field.

Note: The options for Additional Details are provided as per state specific requirements of VAT/CST forms and annexures. In this example, Bihar is selected as the State .

o Press Enter to save and return to the voucher screen.

3. Debit the expense ledger.

4. Enter the amount in the Debit column.

5. Credit the VAT ledger, and enter the relevant details in the VAT Details screen.

6. Set the option Provide VAT Details? to Yes and enter the From and To dates, if required.

7. Enter Narration , if required.

The journal voucher appears as shown below:

8. Press Enter to save.

T he states with Reversal of Input Tax available as the Nature of Adjustment are given below:

State Name

Nature of Adjustment

Additional Details

Voucher Entry

Assam

Reversal of Input Tax

---

Debit: Expense ledger.

Credit: VAT ledger.

Bihar

Reversal of Input Tax

Goods Damaged/Lost

Debit: Ledger grouped under Indirect Expenses / Current Assets .

Credit: VAT ledger.

Goods Sold Below Purchase Price

Debit: Ledger grouped under Indirect Expenses / Current Assets .

Credit: VAT ledger.

Goods Specified in Schedule-IV

Debit: Ledger grouped under Indirect Expenses / Current Assets .

Credit: VAT ledger.

Inter State Stock Transfer

Debit: Ledger grouped under Indirect Expenses / Current Assets .

Credit: VAT ledger.

Intra State Stock Transfer

Debit: Ledger grouped under Indirect Expenses / Current Assets .

Credit: VAT ledger.

Sale of Goods in Schedule-I

Debit: Ledger grouped under Indirect Expenses / Current Assets .

Credit: VAT ledger.

Transfer of Rights to Use Goods, Gifts Or Self Consumptions

Debit: Ledger grouped under Indirect Expenses / Current Assets .

Credit: VAT ledger.

Chandigarh

Reversal of Input Tax

Not Applicable

Debit: Expense ledger.

Credit: VAT ledger.

Apportionment of Input Tax for Tax Free Goods

Debit: Expense ledger.

Credit: VAT ledger.

Apportionment of ITC for Branch Transfer

Debit: Expense ledger.

Credit: VAT ledger.

Apportionment of Notional ITC for Manufacturing Tax Free Goods

Debit: Expense ledger.

Credit: VAT ledger.

Cash Discount on Purchase

Debit: Expense ledger.

Credit: VAT ledger.

Other Purchase Adjustment

Debit: VAT ledger.

Credit: Purchase ledger.

Stock Transfer

Debit: Expense ledger.

Credit: VAT ledger.

Trade Discount

Debit: Party ledger.

Credit: Purchase ledger.

Credit: VAT ledger.

Chhattisgarh

Reversal of Input Tax

Stock Transfer

Debit: Purchase/expense ledger.

Credit: VAT ledger.

Dadra and Nagar Haveli

Reversal of Input Tax

Tax Credit Disallowed for Goods Lost Or Destroyed

Debit: Expense ledger.

Credit: Purchase ledger.

Credit: VAT ledger.

Tax Credit Disallowed in Respect of Stock Transfer Out of Dadra & Nagar Haveli

Debit: Purchase ledger.

Credit: VAT ledger.

Delhi

Reversal of Input Tax

Goods Sold Below Purchase Price

Debit: Purchase ledger.

Credit: VAT ledger.

Closing Stock

Debit: Expense ledger.

Credit: Purchase ledger.

Credit: VAT ledger.

Interstate Sales

Debit: Expense ledger.

Credit: VAT ledger.

Tax Credit Adjustment on Sale Or Stock Transfer of Capital Goods

Debit: Expense ledger.

Credit: VAT ledger.

Tax Credit Disallowed for Goods Lost Or Destroyed

Debit: Expense ledger.

Credit: VAT ledger.

Tax Credit Disallowed in Respect of Stock Transfer Out of Delhi

Debit: Expense ledger.

Credit: VAT ledger.

Goa

Reversal of Input Tax

Contingencies Covered U/S 9 Sub Sec 2, 3, 5 & 6

Debit: Purchase ledger.

Credit: VAT ledger.

Manufacturing of Exempt Goods

Debit: Purchase ledger.

Credit: VAT ledger.

Others

Debit: Purchase ledger.

Credit: VAT ledger.

Stock Transfer

Debit: Purchase ledger.

Credit: VAT ledger.

Gujarat

Reversal of Input Tax

Capital Goods

Debit: Ledger grouped under Current Assets .

Credit: VAT ledger.

Credit: Additional tax ledger.

Fuels Used in Manufacture of Goods

Debit: Purchase ledger.

Credit: VAT ledger.

Credit: Additional tax ledger.

Manufactured Goods

Debit: Purchase ledger.

Credit: VAT ledger.

Credit: Additional tax ledger.

Manufacturing of Exempt Goods

Debit: Purchase ledger.

Credit: VAT ledger.

Credit: Additional tax ledger.

Others

Debit: Purchase ledger.

Credit: VAT ledger.

Credit: Additional tax ledger.

Stock Transfer

Debit: Purchase ledger.

Credit: VAT ledger.

Credit: Additional tax ledger.

Purchases Not Qualifying for Tax Credit

Debit: Purchase ledger.

Credit: VAT ledger.

Credit: Additional tax ledger.

Tax Adjustments Towards Transfer of Right to Use

Debit: Expense/purchase ledger.

Credit: Purchase ledger.

Credit: VAT ledger.

Credit: Additional tax ledger.

Haryana

Reversal of Input Tax

Capital goods forming part of gross block on day of registration cancellation

Debit: Expense/purchase ledger.

Credit: VAT ledger.

Credit: Surcharge ledger.

Capital goods used in generation & distribution of electricity

Debit: Expense/purchase ledger.

Credit: VAT ledger.

Credit: Surcharge ledger.

Capital goods used in manufacture of exempted goods

Debit: Expense/purchase ledger.

Credit: VAT ledger.

Credit: Surcharge ledger.

Capital goods used in mining

Debit: Expense/purchase ledger.

Credit: VAT ledger.

Credit: Surcharge ledger.

Capital goods used in telecommunication network

Debit: Expense/purchase ledger.

Credit: VAT ledger.

Credit: Surcharge ledger.

Haryana

Reversal of Input Tax

Fuels Used in Manufacture of Goods

Debit: Expense/purchase ledger.

Credit: VAT ledger.

Credit: Surcharge ledger.

Goods are used for manufacturing and sold in interstate trade or commerce

Debit: Expense/purchase ledger.

Credit: VAT ledger.

Credit: Surcharge ledger.

Goods purchased - Exported out of state

Debit: Expense/purchase ledger.

Credit: VAT ledger.

Credit: Surcharge ledger.

Goods Sold Below Purchase Price

Debit: Expense/purchase ledger.

Credit: VAT ledger.

Credit: Surcharge ledger.

Interstate Sales

Debit: Expense/purchase ledger.

Credit: VAT ledger.

Credit: Surcharge ledger.

Liquor when sold in the state by Bar Licensees

Debit: Expense/purchase ledger.

Credit: VAT ledger.

Credit: Surcharge ledger.

Haryana

Reversal of Input Tax

Manufacturing of Exempt Goods

Debit: Expense/purchase ledger.

Credit: VAT ledger.

Credit: Surcharge ledger.

Purchased from VAT dealers and sold by Canteen Store Department

Debit: Expense/purchase ledger.

Credit: VAT ledger.

Credit: Surcharge ledger.

Purchased from VAT dealers disposed other than sale

Debit: Expense/purchase ledger.

Credit: VAT ledger.

Credit: Surcharge ledger.

Stock of Goods purchased/manufactured/processed as on day of registration cancellation

Debit: Expense/purchase ledger.

Credit: VAT ledger.

Credit: Surcharge ledger.

Used in manufacture/packing of exempted goods (except sold in course of export)

Debit: Expense/purchase ledger.

Credit: VAT ledger.

Credit: Surcharge ledger.

Used in manufacture/packing of taxable goods disposed otherwise by sale

Debit: Expense/purchase ledger.

Credit: VAT ledger.

Credit: Surcharge ledger.

Used in manufacture/packing of taxable goods exported

Debit: Expense/purchase ledger.

Credit: VAT ledger.

Credit: Surcharge ledger.

Used in telecommunications/mining/generation & distribution of electricity

Debit: Expense/purchase ledger.

Credit: VAT ledger.

Credit: Surcharge ledger.

Himachal Pradesh

Reversal of Input Tax

Fuels Used in Manufacture of Goods

Debit: Expense ledger.

Credit: VAT ledger.

Goods disposed off otherwise than by sale

Debit: Expense ledger.

Credit: VAT ledger.

Goods Given as Gift, Free Sample

Debit: Expense ledger.

Credit: VAT ledger.

Goods Used in Telcom, Electricity and Other Power Generation

Debit: Expense ledger.

Credit: VAT ledger.

Input Tax restricted Goods

Debit: Expense ledger.

Credit: VAT ledger.

Left in Stock on Closure of Business or Cancellation of Regn.

Debit: Expense ledger.

Credit: VAT ledger.

Himachal Pradesh

Reversal of Input Tax

No Invoice or Non-availability of Tax Details in Invoice

Debit: Expense ledger.

Credit: VAT ledger.

Others

Debit: Expense ledger.

Credit: VAT ledger.

Purchased on Concessional Rate of Tax

Debit: Expense ledger.

Credit: VAT ledger.

Purchases from Un-Registered, Composition, Casual Dealers

Debit: Expense ledger.

Credit: VAT ledger.

Purchases Used in Mfg. of Tax Free Goods

Debit: Expense ledger.

Credit: VAT ledger.

Tax Adjustment Towards Transfer of Right to Use

Debit: Expense ledger.

Credit: VAT ledger.

Tax Credit Disallowed in Respect of Branch/Consignment Transfer

Debit: Expense ledger.

Credit: VAT ledger.

Jammu and Kashmir

Reversal of Input Tax

Adjustment Towards O/s Tax Liability Under the J&K VAT  Act

Debit: Expense ledger.

Credit: VAT ledger.

Others

Debit: Expense ledger.

Credit: VAT ledger.

Partial Rebating

Debit: Expense ledger.

Credit: VAT ledger.

Special Rebating

Debit: Expense ledger.

Credit: VAT ledger.

Stock Transfer

Debit: Expense ledger.

Credit: VAT ledger.

U/s 21(10)

Debit: Expense ledger.

Credit: VAT ledger.

U/s 21(4)

Debit: Expense ledger.

Credit: VAT ledger.

Jharkhand

Reversal of Input Tax

Attributable Input Tax Towards Exempted Sales

Debit: Expense ledger.

Credit: VAT ledger.

Reversal on Common Inputs

Debit: Expense ledger.

Credit: VAT ledger.

Karnataka

Reversal of Input Tax

Partial Rebating

Debit: Expense ledger.

Credit: VAT ledger.

Pre-Registration Purchases

Debit: Expense ledger.

Credit: VAT ledger.

Purchase Return

Debit: Expense ledger.

Credit: VAT ledger.

Special Rebating

Debit: Expense ledger.

Credit: VAT ledger.

Under Section 11

Debit: Expense ledger.

Credit: VAT ledger.

Kerala

Reversal of Input Tax

Not Applicable

Debit: Expense/purchase ledger.

Credit: VAT ledger.

Capital Goods

Debit: Ledger grouped under Fixed Assets .

Credit: Ledger grouped under Current Assets .

Deficit/Damage on Goods Sold

Debit: Purchase ledger.

Debit: VAT ledger.

Debit: Cess ledger.

Credit: Party/cash ledger.

Madhya Pradesh

Reversal of Input Tax

Not Applicable

Debit: Expense ledger.

Credit: VAT ledger.

Goods disposed off otherwise than by sale

Debit: Expense ledger.

Credit: VAT ledger.

Goods Given As Gift, Free Sample

Debit: Expense ledger.

Credit: Purchase ledger.

Credit: VAT ledger.

Goods Used for Packing

Debit: Expense ledger.

Credit: VAT ledger.

Inter State Stock Transfer

Debit: Expense ledger.

Credit: VAT ledger.

Manufacturing of Exempt Goods

Debit: Purchase ledger.

Credit: VAT ledger.

Others

Debit: Purchase ledger.

Credit: VAT ledger.

Stock Transfer

Debit: Expense ledger.

Credit: VAT ledger.

Tax Adjustment Towards Other Dealer's Dues

Debit: Party ledger.

Credit: VAT ledger.

Works Contract

Debit: Expense ledger.

Credit: VAT ledger.

Maharashtra

Reversal of Input Tax

Non-Creditable Purchases

Debit: Expense ledger.

Credit: VAT ledger.

Non-Creditable Purchases (Capital Assets)

Debit: Expense ledger.

Credit: VAT ledger.

Purchases U/r 52A

Debit: Expense ledger.

Credit: VAT ledger.

Purchases U/r 52B

Debit: Expense ledger.

Credit: VAT ledger.

Purchases Used for Capital Assets U/r 54

Debit: Expense ledger.

Credit: VAT ledger.

Purchases Used for Others U/r 54

Debit: Expense ledger.

Credit: VAT ledger.

Odisha

Reversal of Input Tax

Capital Goods

Debit: Purchase/expense ledger.

Credit: VAT ledger.

Exempted Goods

Debit: Expense ledger.

Credit: VAT ledger.

Goods Damaged/Lost

Debit: Expense ledger.

Credit: VAT ledger.

Goods Sold Below Purchase Price

Debit: Purchase ledger.

Credit: VAT ledger.

Odisha

Reversal of Input Tax

Goods Unsold As per Section 16

Debit: Expense ledger.

Credit: VAT ledger.

Goods Unsold at the Time of Business Closure

Debit: Expense ledger.

Credit: VAT ledger.

Interstate Sales

Debit: Expense ledger.

Credit: VAT ledger.

Manufacturing of Exempt Goods

Debit: Expense ledger.

Credit: Purchase ledger.

Credit: VAT ledger.

Odisha

Reversal of Input Tax

Others

Debit: Purchase ledger.

Credit: VAT ledger.

Reverse Credit on Goods Sold Other Than Interstate Sales

Debit: Expense ledger.

Credit: VAT ledger.

Stock Transfer

Debit: Expense ledger.

Credit: VAT ledger.

Switch Over

Debit: Expense ledger.

Credit: VAT ledger.

Used in Mining and Electricity

Debit: Expense ledger.

Credit: VAT ledger.

Puducherry

Reversal of Input Tax

Goods Lost, Stolen Or Destroyed, Used As Gift, Sample

Debit: Purchase/expense ledger.

Credit: VAT ledger.

Tax Adjustment Towards Other Dealer's Dues

Debit: party ledger.

Credit: VAT ledger.

Tax Credit Disallowed in Respect of Branch/Consignment Transfer

Debit: Purchase/expense ledger.

Credit: VAT ledger.

Punjab

Reversal of Input Tax

Apportionment of Input Tax for Tax Free Goods

Debit: Expense ledger.

Credit: VAT ledger.

Credit: Surcharge ledger.

Apportionment of ITC for Branch Transfer

Debit: Expense ledger.

Credit: VAT ledger.

Credit: Surcharge ledger.

Apportionment of ITC U/s 13(4)

Debit: Expense ledger.

Credit: VAT ledger.

Credit: Surcharge ledger.

Cash Discount on Purchase

Debit: Party ledger.

Credit: Purchase ledger.

Credit: VAT ledger.

Credit: Surcharge ledger.

Goods Used in Manufacturing - Tax Free Goods (Exempted Unit)

Debit: Purchase ledger.

Credit: Purchase ledger.

Punjab

Reversal of Input Tax

ITC on Goods Sent for Job Work

Debit: Ledger grouped under Current Assets .

Credit: VAT ledger.

Credit: Surcharge ledger.

Other ITC Adjustments

Debit: Expense ledger.

Credit: VAT ledger.

Credit: Surcharge ledger.

Other Purchase Adjustment

Debit: Purchase ledger.

Credit: Purchase ledger.

Purchase Tax Sch. H Items

Debit: Expense ledger.

Credit: VAT ledger.

Credit: Surcharge ledger.

Trade Discount

Debit: Party ledger.

Credit: Purchase ledger.

Credit: VAT ledger.

Credit: Surcharge ledger.

Rajasthan

Reversal of Input Tax

Interstate Sales

Debit: Purchase ledger.

Credit: VAT ledger.

Stock Transfer

Debit: Purchase ledger.

Credit: VAT ledger.

Switch Over

Debit: Expense ledger.

Credit: Purchase ledger.

Credit: VAT ledger.

Telangana

Reversal of Input Tax

Reversal on Common Inputs

Debit: Expense ledger.

Credit: VAT ledger.

Uttarakhand

Reversal of Input Tax

Others

Debit: Expense ledger.

Credit: VAT ledger.

Stock Transfer

Debit: Expense ledger.

Credit: VAT ledger.

Uttar Pradesh

Reversal of Input Tax

---

Debit: Expense ledger.

Credit: VAT ledger.

West Bengal

Reversal of Input Tax

Goods Damaged/Lost

Debit: Purchase/expense ledger.

Credit: VAT ledger.

Goods Given As Gift, Free Sample

Debit: Purchase/expense ledger.

Credit: VAT ledger.

Manufacturing of Exempt Goods

Debit: Purchase/expense ledger.

Credit: VAT ledger.

Others

Debit: Purchase/expense ledger.

Credit: VAT ledger.

Stock Transfer

Debit: Purchase/expense ledger.

Credit: VAT ledger.

Transfer of Rights to Use Goods, Gifts Or Self Consumptions

Debit: Purchase/expense ledger.

Credit: VAT ledger.