Creating a Purchase Ledger (Composite VAT)

To create a Purchase Ledger,

Go to Gateway of Tally > Accounts Info. > Ledgers > Create

• Enter the Name of the Purchase Ledger

• In the Under field, select Purchase Accounts from the List of Groups

• Set the field Inventory values are affected to Yes

• Set the field Used in VAT Returns to Yes

• Select the VAT/Tax Class from the list displayed.

Note: The VAT/Tax Classifications pertaining to purchases will be displayed for selection based on the State and the Type of Dealer pre-defined in the F3: Statutory & Taxation Features. The VAT/Tax classifications displayed for purchases in this example pertains to Karnataka State.

• Accept the purchase ledger.

For Karnataka State, the VAT/Tax class - Purchase from URDs - Taxable Goods (Composition) can be used for recording purchases made at different tax rates from unregistered dealer. To create ledgers for different tax rates, follow the steps given below:

Step 1: Altering the Purchase Accounts Group

Go to Gateway of Tally > Accounts Info. > Group

Select Purchase Account and set the option - Use for Calculation (e.g. Taxes, Discounts) to Yes and accept the group alteration screen.

Step 2: Creating Purchase from URDs Ledger for Different Tax Rates

In the Purchase Ledger creation screen,

• Select the group as Purchase Accounts

• Enter the required tax rate in Percentage of Calculation field

• Select On Total Sales as the Method of Calculation

• Set Used in VAT Returns to Yes and select the VAT/Tax Class - Purchase From URDs - Taxable Goods (Composition)

• Accept the Ledger creation screen.