https://help.tallysolutions.com/docs/te9rel60/Tax_India/VAT/journal_vouchers/BR_Decr_ITC.htm

Recording a Transaction for Decrease of Input Tax

You can record a journal voucher for decrease in input tax.

To create journal voucher for decrease of 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 Decrease of Input Tax in the Nature of adjustment field.

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

3.    Debit the CST ledger.

o     Enter the Rate and Assessable Value in the VAT Details screen.

o     Press Enter to return to voucher screen.

4.    Enter the amount in the Debit column.

5.    Credit the VAT ledger.

o     Enter the Rate and Assessable Value in the VAT Details screen.

o     Press Enter to return to the voucher screen.

6.    Set the option Provide VAT Details? to Yes and enter the From and To dates, else retain the option as No.

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

7.    Enter Narration, if required. The journal voucher appears as shown below:

8.    Press Enter to save.

The states with Decrease of Input Tax available as the Nature of Adjustment are given below:

State Name

Nature of Adjustment

Additional Details

Voucher Entry

Andhra Pradesh

Decrease of Input Tax

Against CST

Debit: CST ledger.

Credit: VAT ledger.

Assam

Decrease of Input Tax

Against CST

Debit: CST ledger.

Credit: VAT ledger.

Bihar

Decrease of Input Tax

Against CST

Debit: CST ledger.

Credit: VAT ledger or ledger grouped under Current Liabilities.

Chandigarh

Decrease of Input Tax

Against CST

Debit: CST ledger.

Credit: VAT ledger.

Tax Paid on Unsold Stock

Debit: Ledger grouped under Current Assets.

Credit: VAT ledger.

Chhattisgarh

Decrease of Input Tax

Against CST

Debit: CST ledger.

Credit: VAT ledger.

Against CST of capital goods

Debit: CST ledger.

Credit: VAT ledger.

Dadra and Nagar Haveli

Decrease of Input Tax

Against CST

Debit: CST ledger.

Credit: VAT ledger/ledger grouped under Current Liabilities.

Change in Use of Goods, for Purchase Other Than for Which Credit Allowed

Debit: Purchase ledger.

Credit: VAT ledger.

Other Adjustments

Debit: Party Ledger.

Credit: Purchase Ledger.

Credit: VAT ledger.

Delhi

Decrease of Input Tax

Against CST

Debit: CST ledger.

Credit: VAT ledger.

Change in Use of Goods, for Purchase Other Than for Which Credit Allowed

Debit: Purchase ledger.

Credit: VAT ledger.

Other Adjustments

Debit: Party/expenses ledger.

Debit: VAT ledger.

Credit: Purchase ledger.

Goa

Decrease of Input Tax

Against CST

Debit: CST ledger.

Credit: VAT ledger.

Set Off Against Excess ITC Under Goa Sales Tax Act

Debit: Expenses ledger.

Credit: VAT ledger.

Set Off Against Excess ITC Under Goa Tax on Entry of Goods Act

Debit: Expenses ledger.

Credit: VAT ledger.

Set Off Against Excess ITC Under Goa VAT Act

Debit: Expenses ledger.

Credit: VAT ledger.

Gujarat

Decrease of Input Tax

Against CST

Debit: CST ledger.

Credit: VAT ledger.

Credit: Additional tax ledger.

Haryana

Decrease of Input Tax

Against CST

Debit: CST ledger.

Credit: VAT ledger.

Himachal Pradesh

Decrease of Input Tax

Against CST

Debit: CST ledger.

Credit: VAT ledger.

Tax Paid on Unsold Stock

Debit: Ledger grouped under Current Assets.

Credit: VAT ledger.

Jammu and Kashmir

Decrease of Input Tax

Against CST

Debit: CST ledger.

Credit: VAT ledger.

Jharkhand

Decrease of Input Tax

Against CST

Debit: CST ledger.

Credit: VAT ledger.

Madhya Pradesh

Decrease of Input Tax

Against CST

Debit: CST ledger.

Credit: VAT ledger.

Maharashtra

Decrease of Input Tax

Against CST

Debit: CST ledger.

Credit: VAT ledger.

Other Purchase Adjustment

Debit: Expenses ledger.

Credit: CST ledger.

Other Purchase Adjustment (Capital Assets)

Debit: Expenses ledger.

Credit: CST ledger.

Odisha

Decrease of Input Tax

Against CST

Debit: CST ledger.

Credit: VAT ledger.

Credit note issued to buyer (excess VAT in sales)

Debit: Party ledger.

Credit: VAT ledger.

Puducherry

Decrease of Input Tax

Against CST

Debit: CST ledger.

Credit: VAT ledger.

Change in Use of Goods, for Purchase Other Than for Which Credit Allowed

Debit: Purchase/expense ledger.

Credit: VAT ledger.

Other Adjustments

Debit: Party/cash ledger.

Credit: Purchase ledger.

Credit: VAT ledger.

Punjab

Decrease of Input Tax

Against CST

Debit: CST ledger.

Debit: Surcharge ledger.

Credit: VAT ledger.

Credit: Surcharge ledger.

Tax not charged by the seller

Debit: VAT ledger.

Debit: Surcharge ledger.

Credit: VAT ledger.

Credit: Surcharge ledger.

Tamil Nadu

Decrease of Input Tax

Against CST

Debit: CST ledger.

Credit: VAT ledger.

Telangana

Decrease of Input Tax

Against CST

Debit: CST ledger.

Credit: VAT ledger.

Uttarakhand

Decrease of Input Tax

Against CST

Debit: CST ledger.

Credit: VAT ledger or ledger grouped under Current Liabilities.

Refund Claim

Debit: Refund claim ledger grouped under Current Assets.

Credit: VAT ledger.

Uttar Pradesh

Decrease of Input Tax

Against CST

Debit: CST ledger.

Credit: VAT ledger.

West Bengal

Decrease of Input Tax

Against CST

Debit: CST ledger.

Credit: VAT ledger.

Excess Claimed Earlier

Debit: Purchases/expenses ledger.

Credit: VAT ledger.