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.
The 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. |
