Set Up GST Composition in TallyPrime
TallyPrime supports GST Composition end‑to‑end, from company setup to returns, while ensuring compliance with GST rules.
As a Composition dealer, you will pay tax at a fixed rate, instead of charging GST on invoices. Accordingly, TallyPrime helps you record transactions and generate returns accurately, with minimal effort.
Enable GST Composition
Set your company’s GST Registration type as Composition and start recording transactions under composition rules.
Set up e-Way Bill details
If your business delivers goods from one state to another, then you will require an e-Way Bill for transportation.
Set this up in three simple steps: Register on e-Way Bill portal > Create API User Profile > Enable e-Way Bill in TallyPrime.
Support for single & multiple GSTIN/UIN (TallyPrime 3.0 & later)
Maintain one or more GST registrations within the same company. This helps you record transactions and generate returns separately for each GSTIN/UIN, while using consolidated business reports.
GST Rates and HSN/SAC management
TallyPrime helps you:
- Define GST rates in your company, ledgers, or stock items.
- Maintain HSN/SAC details according to the nature of goods or services.
- View and update all GST rates from a consolidated report.
This helps ensure tax calculations remain accurate even when GST rates change.
Consistent voucher numbering
Maintain unique and compliant voucher numbering, even when dealing with sales or sales returns and multiple GST registrations.
Simple & structured GST masters
Easily manage GST details across:
- Stock items & stock groups
- Sales & purchase ledgers
- Expense & income ledgers
- Party ledgers
- Tax ledgers (for purchases)
- Group the ledger under Direct Expenses, Purchase Accounts, or Indirect Expenses.
- Set Inventory values are affected to No.
- Set the Type of Ledger to Central Tax for CGST and State Tax for SGST.
- Set Appropriate tax values in purchase invoice to Yes.
This option help you arrive at the purchase cost based on the GST rates for each stock item.
Party GSTIN/UIN validation
Keep party GST details accurate by:
- Saving GSTIN/UIN and registration information
- Validating GSTIN/UIN directly from within TallyPrime
- Using common party ledgers where detailed GST tracking is not required
Sales without GST calculation
Record sales vouchers without GST tax ledgers. Tax liability will be computed based on the annual turnover rules defined for GST Composition. Further, even your invoice titles will automatically appear as per GST Composition regulations.
Purchases with tax allocation
If you had paid GST on your purchases, you can allocate this expense directly to your purchase cost. You can configure your tax ledgers accordingly. This ensures accurate stock valuation and expense tracking.
Switching from Regular to Composition: 5 Points to Remember
If your business is switching from Regular to Composition, this is how TallyPrime helps you stay ready.
1. Sales works differently
You don’t need GST tax ledgers in sales. In GSTR-4 and GST CMP-08 reports, tax is calculated automatically at Composition rates, and doesn’t appear in your invoices.
2. Purchase GST becomes a cost
ITC is not applicable under Composition, so any GST paid on purchases is added to the item cost or expenses.
3. Past data is safe
When you switch from Regular to Composition, your old sales, purchases, and ledgers remain undisturbed. Only your new transactions follow Composition rules. Just ensure that your tax ledgers are configured for purchases under Composition.
4. Rates come from the right place
Purchases: Rates from stock items or purchase ledgers
Sales returns & liability: Rates from Company GST Details
5. Invoices stay compliant by default
Sales invoice titles are automatically updated as per GST Composition rules—no manual formatting needed.
Questions & Answers
- Do I need GST tax ledgers in sales vouchers under Composition?
No. As a Composition dealer, you have to record sales without GST tax ledgers. In GSTR-4 and CMP-08, tax liability is automatically computed based on your annual turnover. - What happens to the GST paid on purchases under Composition?
As ITC is not available under Composition, any GST paid during purchases is added to the item cost or expense. You can configure your tax ledgers to allocate this automatically. - What happens to my old data if I switch from Regular to Composition?
Your existing sales, purchases, and ledgers remain untouched. Only new transactions recorded after the switch will follow Composition rules.
