You can record a journal voucher to transfer the closing balance of tax credits of VAT, additional tax, cess, surcharge, CENVAT, service tax, krishi kalyan cess, and special excise duty/additional excise duty as opening balance under GST.
As GST is a new tax structure, the tax credits of previous tax regime will not be automatically carried forward to the GST account. Based on the date from which you want to maintain the books of accounts under GST, you need to carry forward the tax credit to state/central tax by recording a journal voucher.
The tax credits of service tax, krishi kalyan cess and CENVAT has to be transferred to the central tax ledger. The tax credit of VAT, additional tax, surcharge and cess has to be transferred to the state tax ledger. Hence, two separate journal vouchers have to be recorded to account for the opening balance of central and state taxes.
To record a journal voucher
1. Go to Gateway of Tally > Accounting Vouchers > F7: Journal.
Note: You can also create a journal voucher from Gateway of Tally > Display > Statutory Reports > GST > GSTR-1 or GSTR-2.
2. Click J: Stat Adjustment.
3. In the Stat Adjustment Details screen, select the options as shown below:
4. Nature of adjustment - Opening Balance.
5. Transfer the tax credit of service tax and CENVAT to central tax ledger as shown below:
6. Transfer the tax credit of VAT to state tax ledger as shown below:
Note: Along with the VAT ledger, the cess/surcharge/additional tax ledger can be selected based on the state for which the VAT transactions were recorded prior to implementation of GST.
You can enter the balance of tax credit as the opening balance in central tax and state tax ledgers, when your books beginning date is on 1st July 2017. However, it is recommended to record a journal voucher as the tax credit can be transferred on or after 1st July 2017. Enter the closing balance of:
● VAT or VAT with surcharge/cess/additional tax as the opening balance (debit balance) for state tax ledger.
● CENVAT, service tax and krishi kalyan cess as the opening balance (debit balance) for central tax ledger.
The opening balance entered for central tax and state tax/UT tax in ledger master or journal voucher is a book entry and will not reflect in the reports.
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