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.