https://help.tallysolutions.com/docs/te9rel63/Tax_International/GCC_VAT/purchases_under_gcc_vat.htm

GCC VAT Purchases

Related topics

Import of Goods

Import for Subsequent Sales

Purchase Returns

Input Tax Credit

Once you activate GCC VAT for your company in Tally.ERP 9, you can record the purchase of goods and services (inward supply) that attract VAT using a purchase voucher.

     Domestic purchase

     Purchase from an unregistered dealer

     Purchases within GCC countries

     Purchase of capital goods

 

Domestic Purchase

The purchase of goods or services from a supplier in the same country will attract VAT rates as applicable for the goods or services. For example, a business located in Abu Dhabi can purchase goods or services from a supplier in Dubai, or any other emirates of UAE, such purchases from suppliers located in UAE is considered domestic purchase.

Record purchases from a domestic supplier

1.    Go to Gateway of Tally > Accounting Vouchers > F9: Purchase.

2.    Specify the sales invoice no. and date received from the supplying party in the Supplier invoice no. and Date fields respectively.

3.    In Party A/c name, select the supplier's ledger.

4.    Select the purchase ledger applicable for local taxable purchases.

5.    Select the required items, and specify the quantities and rates.

6.    Select the VAT ledger.

You can view the tax details by clicking A: Tax Analysis. Click F1: Detailed to view the tax break-up.

7.    Press Ctrl+A to accept.

 

Purchase from an Unregistered Dealer

Purchases from unregistered dealers are exempt. You need to identify the party as an unregistered dealer.

Update the party ledger to identify unregistered dealers

1.    Go to Gateway of Tally > Accounts Info. > Ledgers > Alter > select the ledger.

2.    Set the Registration type as Unregistered.

3.    Press Ctrl+A to save.

Record purchases from an unregistered dealer

1.    Go to Gateway of Tally > Accounting Vouchers > F9: Purchase.

2.    In Party's A/c Name, select the ledger of the unregistered dealer.

3.    Select the purchase ledger created with Domestic Exempt Purchases - Unregistered as the Nature of transaction.

4.    Select the stock item, and enter the quantity and rate.

If you are using a common purchase ledger, then based on the party ledger, the nature of transaction is inferred as Domestic Taxable Purchases - Unregistered. To change the nature:

     Click F12: Configure in the purchase invoice and set the option Allow modification of tax details for VAT? to Yes.

     Select the Nature as Domestic Exempt Purchases - Unregistered in the VAT Details screen (displayed on pressing Enter from the Amount column of the invoice).

     While saving the invoice, press O to override the invoice with the new nature of transaction.

5.    Press Ctrl+A to accept.

 

Purchases within GCC Countries

If you are a registered dealer located in UAE and purchase goods or services from a registered dealer in Saudi Arabia, then you have to pay tax on the purchases, based on reverse charge. You have to record a journal voucher to book tax liability and claim input tax credit for the liability booked and the tax paid.

Record purchases within GCC countries

1.    Go to Gateway of Tally > Accounting Vouchers > F9: Purchase.

2.    In Party's A/c Name, select the supplier belonging to a GCC country.

3.    Select the purchase ledger created with Intra GCC Taxable Purchases as the Nature of transaction.

4.    Select the stock item, and enter the quantity and rate.

5.    Press Ctrl+A to accept.

You can view the details of tax liability to be recorded for intra GCC purchases under reverse charge in the Reverse Charge Summary.

Record journal vouchers for reverse charge liability

1.    Go to Gateway of Tally > Accounting Vouchers > F7: Journal.

2.    Click J: Stat Adjustment.

o     Select Increase of Tax Liability as the Nature of adjustment.

o     In the Additional Details field, select the option Intra GCC Purchase.

o     Press Enter to return to journal voucher.

3.    Debit the expense ledger, or the ledger grouped under Current Assets.

4.    Credit the VAT ledger for the tax on intra GCC purchase under reverse charge. Enter the tax Rate and Taxable Value in the VAT Details screen displayed.

5.    Press Ctrl+A to accept the voucher.

 

Purchase of Capital Goods

When capital goods are purchased, the input tax is adjusted based on the actual use of the goods during the specified period. You can record the input credit claim using a journal voucher.

Record purchases of capital goods

1.    Go to Gateway of Tally > Accounting Vouchers > F9: Purchases.

2.    Press Ctrl+V to switch to voucher mode.

3.    Press F12: Configure twice, set the option Allow expenses/fixed assets in purchase vouchers? to Yes.

4.    Press Ctrl+A to return to voucher screen.

5.    Enter Supplier Invoice No. and Date.

6.    Credit the party ledger and enter the amount.

7.    Debit the fixed assets ledger (grouped under Fixed Assets and with Domestic Taxable Purchase - Capital Goods selected as the Nature of transaction) and enter the taxable value.

8.    Enter the VAT Rate and Taxable Value in the VAT Details screen displayed.

9.    Press Crtl+A to return to the voucher.

10.  Debit current assets ledger created under Current Assets.

11.  Press Ctrl+A to accept the voucher.

Claim input credit on capital goods purchase to the extent allowed for the period

1.    Go to Gateway of Tally > Accounting Vouchers > F7: Journal.

2.    Click J: Stat Adjustment.

o     Select Increasing Input Tax as the Nature of adjustment.

o     In the Additional Details field, select the option Capital Goods.

o     Press Enter to return to journal voucher.

3.    Debit the VAT ledger for the tax on capital goods purchase. Enter the VAT Rate and Taxable Value in the VAT Details screen displayed.

4.    Credit the current assets ledger grouped under Current Assets that was used during capital goods purchase to account for tax expenses.

5.    Press Ctrl+A to accept the voucher.