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Record Outward Supply | GST Reverse Charge (RCM)

GST classifies some services as reverse chargeable, and the buyer is liable to pay tax. When you record sales of such services, you can view the tax liability of the buyer in the invoice. These sales transactions are captured in the B2B invoices section of the GSTR-1 report. As reverse charge does not apply on supplies made to consumers or unregistered dealers, select GST ledgers in the invoice to calculate tax automatically and print with tax details. Such invoices will appear as B2C supplies in GSTR-1 and GST Annual Computation, and as outward taxable supplies in GSTR-3B.

 

Configure Sales Ledger

  1. Gateway of Tally > Alter > type or select Ledger > and press Enter.
    Alternatively, press Alt+G (Go To) > Alter Master > type or select Ledger > and press Enter.
  2. Select the required sales ledger.
  3. Specify GST applicability.
    • Set the option Is GST Applicable to Applicable.
    • Enable the option Set/Alter GST Details.
  4. Provide GST details.
    • Press F12 (Configure) > set the option Enable Reverse Charge calculation to Yes > and save the configuration screen.
    • In the GST Details screen, set the Taxability to Taxable.
    • Set Is reverse charge applicable to Yes.
    • Enter the GST rates.

      Note: If you create a reverse chargeable service as a stock item, set the option Is reverse charge applicable to Yes in the GST Details screen.
  5. Accept the ledger.

 

Sales of Reverse Charge Supplies to Registered Dealers

Record sales transaction and view the tax liability of the buyer.

  1. Gateway of Tally > Vouchers > press F8 (Sales).
    Alternatively, press Alt+G (Go To) > Create Voucher > press F8 (Sales).
  2. Press Ctrl+H (Change Mode) to select the required voucher mode (Accounting Invoice, in this case).
  3. Select the Party A/c name.
  4. Select the sales ledger enabled for reverse charge.
  5. Press Ctrl+O (Related Reports) > type or select GST – Tax Analysis to view the tax details. Press Alt+F5 (Detailed) to view the tax liability of the buyer under reverse charge.

    Note: If you are on TallyPrime Release 1.1.3 or earlier, follow the step:
    Press Ctrl+I (More Details) > type or select GST – Tax Analysis to view the tax details. Press Alt+F5 (Detailed) to view the tax liability of the buyer under reverse charge.


  6. Press Esc to return to the sales invoice. The sales invoice appears as shown:
  7. Press Ctrl+A to accept.

If you have created services as stock items, record the transaction in item invoice mode by selecting the stock item.

In the printed invoice, the details of services and the tax amount appears with the indication that it is subject to reverse charge.

 

View the Tax Liability of the Buyer

  1. Gateway of Tally > Display More Reports > GST Reports > GSTR-1.
    Alternatively, press Alt+G (Go To) > type or select GSTR-1 > and press Enter.
  2. Press Enter on B2B Invoices. The Voucher Register displays the reverse charge liability of buyer.

 

Sales of Reverse Charge Supplies to Unregistered Dealers or Consumers

  1. Gateway of Tally > Vouchers > press F8 (Sales).
    Alternatively, press Alt+G (Go To) > Create Voucher > press F8 (Sales).
  2. Press Ctrl+H (Change Mode) to select the required voucher mode.
  3. For the Party A/c name, select cash/bank or party ledger with registration type set to Unregistered or Consumer.
  4. Select the goods or services under reverse charge.
    • For item invoice, select the stock item enabled for reverse charge applicability.
    • For accounting invoice, select the sales ledger enabled for reverse charge applicability.
  5. Select the GST ledgers.
  6. Press Ctrl+O (Related Reports) > type or select GST – Tax Analysis to view the tax details. Press Alt+F5 (Detailed) to view the detailed break-up of tax.

    Note: If you are on TallyPrime Release 1.1.3 or earlier, follow the step:
    Press Ctrl+I (More Details) > type or select GST – Tax Analysis to view the tax details. Press Alt+F5 (Detailed) to view the detailed break-up of tax.

  7. Press Esc to return to the sales invoice. The sales invoice appears as shown:
  8. Accept the sales invoice. The tax details will appear in the printed invoice.

The transaction will appear with tax details in GSTR-1, GSTR-3B and GST Annual Computation.

To view the transaction in GST Annual Computation:

  • Gateway of Tally > Display More Reports > GST Reports > GST Annual Computation.
    Alternatively, press Alt+G (Go To) > type or select GST Annual Computation > and press Enter.
    The transaction appears as shown below:

 

Sales of Reverse Charge Supplies Using Nature of Transaction – ‘Sales to Consumer – Taxable’

  1. Gateway of Tally > Vouchers > press F8 (Sales).
    Alternatively, press Alt+G (Go To) > Create Voucher > press F8 (Sales).
  2. Press Ctrl+H (Change Mode) to select the required voucher mode.
  3. For the Party A/c name, select cash/bank or party ledger with registration type set to Unregistered or Consumer.
  4. Select the goods or services under reverse charge.
    • For item invoice, select the stock item enabled for reverse charge applicability.
    • For accounting invoice, select the sales ledger in which the options:
      • Nature of transaction is set to Sales to Consumer – Taxable.
      • Is reverse charge applicable is set to Yes.
  5. Select the GST ledgers.
  6. Accept the sales invoice. The tax details will appear in the printed invoice.

The transaction will appear with tax details in GSTR-1, GSTR-3B and GST Annual Computation.

To view the transaction in GST Annual Computation:

  • Gateway of Tally > Display More Reports > GST Reports > GST Annual Computation.
    Alternatively, press Alt+G (Go To) > type or select GST Annual Computation > and press Enter.
    The transaction appears as shown below:
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