In order to record interstate purchases in the state of Gujarat, you have to account for interstate purchases at 0% against Form C and interstate purchases at 2% against Form C.
Interstate purchases have to be taxed at 0% CST rate against Form C when:
● It is transit transaction against Form E2.
● The goods are taxed at 0% under section 8(5) of CST Act read with section 8(4) (against Form C).
To record such purchases, the following enhancements are introduced:
● Nature of transaction - Interstate Purchase Exempt - With Form C is provided.
● The option Is under CST exemption is provided. After selecting the Form to issue as Form C, you can set this option to:
o Yes, if the goods are taxed at 0% when purchased against Form C.
o No, if the transaction is against Form E1/E2.
To record an interstate purchase invoice against Form C
1. Go to Gateway of Tally > Accounting Vouchers > F9: Purchase.
2. Enter Supplier Invoice No. and Date.
3. Select the party ledger in the field Party's A/c Name.
4. Set the option Is Against C Form? to Yes in Party Details screen. This option appears only when the State selected is other than Maharashtra.
5. Select the purchase ledger predefined with the nature of transaction Interstate Purchase Exempt - With Form C.
6. Select the required stock items.
7. Set the option Provide VAT Details? to Yes. In the Statutory Details screen,
o Enter the Supplier inv. no. and Date.
o Select C Form as the Form to issue.
o Set the option Is Under CST exemption to Yes/No as required.
o Press Enter to save and return to purchase invoice.
The purchase invoice appears as shown below:
8. Press Enter to save.
To record an interstate purchase invoice for items attracting 2% CST
1. Go to Gateway of Tally > Accounting Vouchers > F9: Purchases.
2. Enter Supplier Invoice No. and Date.
3. Select the party ledger in the field Party's A/c Name.
4. Set the option Is Against C Form? to Yes in Party Details screen. This option appears only when the State selected is other than Maharashtra.
5. Select a common purchase ledger in which the option Is VAT/CST Applicable? is set to Applicable, and Set/Alter VAT Details? is not enabled.
6. Select the required stock items whose VAT rates are specified either at the stock group or at the stock item level. Enter Quantity and Rate for each stock item.
Note: If the option Is Against C Form? is set to Yes in Party Details screen, the tax gets calculated at 2% CST rate. This is irrespective of the tax rates defined in the inventory or accounting masters.
7. Select the common CST ledger.
The ledger must be grouped under Duties & Taxes in which the options,
● Type of duty/tax is set to CST.
● Percentage of Calculation is set to 0.
8. Click A: Tax Analysis to view the Tax Analysis screen.
o Click F1: Detailed to view in detailed mode. The Tax Analysis screen appears as shown below:
o Press Esc to return to purchase invoice.
The purchase invoice appears as shown below:
9. Enter Narration, if required.
10. Press Enter to save.
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