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https://help.tallysolutions.com/docs/te9rel63/Tax_India/VAT/Madhya_Pradesh/MP_Reversal_ITC.htm

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.