Value Added Tax

Click a state in the map below to view the VAT functionalities supported in Tally.ERP 9 for that state. Currently 18 states are supported. Click here for more information about Value Added Tax.

Value Added Tax (VAT) is the tax levied at every level of value addition done to a stock item. The tax paid for acquiring the item is allowed as Input Tax Credit. On selling this item, the VAT payable to the department is adjusted against the tax credit, and only the balance amount is paid.

The tax paid on purchases is termed as Input Tax, and tax payable on sales is called Output Tax. The VAT liability of the dealer is calculated as follows:

VAT Payable = Output Tax – Input Tax

Example:

Mr. Ram, a registered dealer, purchased a stock item at 1,000 by paying 5% tax on it, that is, 50. On this item, he made a value addition of 500, and sold it. The VAT liability (to the department) after the value addition amounted to 75, that is., 5% on 1,500. Mr. Ram can claim the tax already paid ( 50) on the initial purchase (as Input Tax Credit), and the tax liability can be adjusted against it. He then has to pay only the balance amount of 25 to the department.

If Input Tax is more than the Output Tax, the dealer can either carry forward the excess tax credit to the next return period or claim it as refund. The dealer can utilize this credit in the subsequent return period for payment of any liability such as output tax, interest, penalty and so on to the department, subject to the provisions or restrictions as specified in VAT Rules.

VAT in Tally.ERP 9

1. Simple setup process, and ease of use.

2. Flexibility to create and manage VAT classifications and tax rates with corresponding applicability dates.

3. Facility to calculate tax, when MRP is inclusive or exclusive of tax.

4. View all tax payments made to the department, with challan details in Payment Reconciliation report.

5. Provision to create payment voucher from Payment Reconciliation screen, and VAT reports.

6. Provision to print tax invoice.

7. Complete tracking of transactions:

   • Up to generation of returns.

   • From VAT reports, transactions, until accounts/inventory masters.

   • With options to correct errors in transactions and masters from the reports.

8. Categorization of transactions as Included, Excluded, and Uncertain Transactions.

9. Facility to generate VAT return at any point in time.

10. Generation of summary of VAT reports, and with detailed view of Statistics of Vouchers, VAT Computation and Payments.

11. Generation of  state-specific VAT forms, and the corresponding annexures.