Reversal of Input Tax (Madhya Pradesh)

For reversal of claimed or availed input tax credit, a journal entry using Reversal of Input Tax as Nature of Adjustment can be recorded.

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.

o     Press Enter to save and return to voucher screen.

3.    Debit the expense ledger.

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 voucher screen.

6.    Enter Narration, if required.

The journal voucher appears as shown below:

7.    Press Enter to save.