Reversal of Input Tax (VAT)
Reversal of input tax can be recorded by creating a journal voucher. Use Reversal of Input Tax as the Nature of Adjustment and debit the expenses under the group Indirect Expenses.
- Gateway of Tally > Vouchers > press F7 (Journal).
Alternatively, press Alt+G (Go To) > Create Voucher > press F7 (Journal). - Press Alt+J (Stat Adjustment) , select the options as shown below:
- Type of duty/tax – VAT.
- Nature of Adjustment – Reversal of Input Tax.
- Additional Details – Inter State Stock Transfer.
Note: The options for Additional Details are provided as per state specific requirements of VAT/CST forms and annexures. In this example, Bihar is selected as the State.
- Press Enter to save and return to the voucher screen.
- Debit the expense ledger.
- Enter the amount in the Debit column.
- Credit the VAT ledger, and enter the relevant details in the VAT Details screen.
- Set the option Provide VAT Details to Yes and enter the From and To dates, if required.
- Enter Narration, if required. The journal voucher appears as shown below:
- Accept the screen. As always, you can press Ctrl+A to save.
The states with Reversal of Input Tax available as the Nature of Adjustment are given below:
|
State Name |
Additional Details |
Voucher Entry |
|
Assam |
— |
Debit: Expense ledger. Credit: VAT ledger. |
|
Bihar |
Goods Damaged/Lost |
Debit: Ledger grouped under Indirect Expenses/Current Assets. Credit: VAT ledger. |
|
Goods Sold Below Purchase Price |
Debit: Ledger grouped under Indirect Expenses/Current Assets. Credit: VAT ledger. |
|
|
Goods Specified in Schedule-IV |
Debit: Ledger grouped under Indirect Expenses/Current Assets. Credit: VAT ledger. |
|
|
Inter State Stock Transfer |
Debit: Ledger grouped under Indirect Expenses/Current Assets. Credit: VAT ledger. |
|
|
Intra State Stock Transfer |
Debit: Ledger grouped under Indirect Expenses/Current Assets. Credit: VAT ledger. |
|
|
Sale of Goods in Schedule-I |
Debit: Ledger grouped under Indirect Expenses/Current Assets. Credit: VAT ledger. |
|
|
Transfer of Rights to Use Goods, Gifts Or Self Consumptions |
Debit: Ledger grouped under Indirect Expenses/Current Assets. Credit: VAT ledger. |
|
|
Chandigarh |
Not Applicable |
Debit: Expense ledger. Credit: VAT ledger. |
|
Apportionment of Input Tax for Tax Free Goods |
Debit: Expense ledger. Credit: VAT ledger. |
|
|
Apportionment of ITC for Branch Transfer |
Debit: Expense ledger. Credit: VAT ledger. |
|
|
Apportionment of Notional ITC for Manufacturing Tax Free Goods |
Debit: Expense ledger. Credit: VAT ledger. |
|
|
Cash Discount on Purchase |
Debit: Expense ledger. Credit: VAT ledger. |
|
|
Other Purchase Adjustment |
Debit: VAT ledger. Credit: Purchase ledger. |
|
|
Stock Transfer |
Debit: Expense ledger. Credit: VAT ledger. |
|
|
Trade Discount |
Debit: Party ledger. Credit: Purchase ledger. Credit: VAT ledger. |
|
|
Chhattisgarh |
Stock Transfer |
Debit: Purchase/expense ledger. Credit: VAT ledger. |
|
Dadra and Nagar Haveli |
Tax Credit Disallowed for Goods Lost Or Destroyed |
Debit: Expense ledger. Credit: Purchase ledger. Credit: VAT ledger. |
|
Tax Credit Disallowed in Respect of Stock Transfer Out of Dadra & Nagar Haveli |
Debit: Purchase ledger. Credit: VAT ledger. |
|
|
Delhi |
Goods Sold Below Purchase Price |
Debit: Purchase ledger. Credit: VAT ledger. |
|
Closing Stock |
Debit: Expense ledger. Credit: Purchase ledger. Credit: VAT ledger. |
|
|
Interstate Sales |
Debit: Expense ledger. Credit: VAT ledger. |
|
|
Tax Credit Adjustment on Sale Or Stock Transfer of Capital Goods |
Debit: Expense ledger. Credit: VAT ledger. |
|
|
Tax Credit Disallowed for Goods Lost Or Destroyed |
Debit: Expense ledger. Credit: VAT ledger. |
|
|
Tax Credit Disallowed in Respect of Stock Transfer Out of Delhi |
Debit: Expense ledger. Credit: VAT ledger. |
|
|
Goa |
Contingencies Covered U/S 9 Sub Sec 2, 3, 5 & 6 |
Debit: Purchase ledger. Credit: VAT ledger. |
|
Manufacturing of Exempt Goods |
Debit: Purchase ledger. Credit: VAT ledger. |
|
|
Others |
Debit: Purchase ledger. Credit: VAT ledger. |
|
|
Stock Transfer |
Debit: Purchase ledger. Credit: VAT ledger. |
|
|
Gujarat |
Capital Goods |
Debit: Ledger grouped under Current Assets. Credit: VAT ledger. Credit: Additional tax ledger. |
|
Fuels Used in Manufacture of Goods |
Debit: Purchase ledger. Credit: VAT ledger. Credit: Additional tax ledger. |
|
|
Manufactured Goods |
Debit: Purchase ledger. Credit: VAT ledger. Credit: Additional tax ledger. |
|
|
Manufacturing of Exempt Goods |
Debit: Purchase ledger. Credit: VAT ledger. Credit: Additional tax ledger. |
|
|
Others |
Debit: Purchase ledger. Credit: VAT ledger. Credit: Additional tax ledger. |
|
|
Stock Transfer |
Debit: Purchase ledger. Credit: VAT ledger. Credit: Additional tax ledger. |
|
|
Purchases Not Qualifying for Tax Credit |
Debit: Purchase ledger. Credit: VAT ledger. Credit: Additional tax ledger. |
|
|
Tax Adjustments Towards Transfer of Right to Use |
Debit: Expense/purchase ledger. Credit: Purchase ledger. Credit: VAT ledger. Credit: Additional tax ledger. |
|
|
Haryana |
Capital goods forming part of gross block on day of registration cancellation |
Debit: Expense/purchase ledger. Credit: VAT ledger. Credit: Surcharge ledger. |
|
Capital goods used in generation & distribution of electricity |
Debit: Expense/purchase ledger. Credit: VAT ledger. Credit: Surcharge ledger. |
|
|
Capital goods used in manufacture of exempted goods |
Debit: Expense/purchase ledger. Credit: VAT ledger. Credit: Surcharge ledger. |
|
|
Capital goods used in mining |
Debit: Expense/purchase ledger. Credit: VAT ledger. Credit: Surcharge ledger. |
|
|
Capital goods used in telecommunication network |
Debit: Expense/purchase ledger. Credit: VAT ledger. Credit: Surcharge ledger. |
|
|
Haryana |
Fuels Used in Manufacture of Goods |
Debit: Expense/purchase ledger. Credit: VAT ledger. Credit: Surcharge ledger. |
|
Goods are used for manufacturing and sold in interstate trade or commerce |
Debit: Expense/purchase ledger. Credit: VAT ledger. Credit: Surcharge ledger. |
|
|
Goods purchased – Exported out of state |
Debit: Expense/purchase ledger. Credit: VAT ledger. Credit: Surcharge ledger. |
|
|
Goods Sold Below Purchase Price |
Debit: Expense/purchase ledger. Credit: VAT ledger. Credit: Surcharge ledger. |
|
|
Interstate Sales |
Debit: Expense/purchase ledger. Credit: VAT ledger. Credit: Surcharge ledger. |
|
|
Liquor when sold in the state by Bar Licensees |
Debit: Expense/purchase ledger. Credit: VAT ledger. Credit: Surcharge ledger. |
|
|
Haryana |
Manufacturing of Exempt Goods |
Debit: Expense/purchase ledger. Credit: VAT ledger. Credit: Surcharge ledger. |
|
Purchased from VAT dealers and sold by Canteen Store Department |
Debit: Expense/purchase ledger. Credit: VAT ledger. Credit: Surcharge ledger. |
|
|
Purchased from VAT dealers disposed other than sale |
Debit: Expense/purchase ledger. Credit: VAT ledger. Credit: Surcharge ledger. |
|
|
Stock of Goods purchased/manufactured/processed as on day of registration cancellation |
Debit: Expense/purchase ledger. Credit: VAT ledger. Credit: Surcharge ledger. |
|
|
Used in manufacture/packing of exempted goods (except sold in course of export) |
Debit: Expense/purchase ledger. Credit: VAT ledger. Credit: Surcharge ledger. |
|
|
Used in manufacture/packing of taxable goods disposed otherwise by sale |
Debit: Expense/purchase ledger. Credit: VAT ledger. Credit: Surcharge ledger. |
|
|
Used in manufacture/packing of taxable goods exported |
Debit: Expense/purchase ledger. Credit: VAT ledger. Credit: Surcharge ledger. |
|
|
Used in telecommunications/mining/generation & distribution of electricity |
Debit: Expense/purchase ledger. Credit: VAT ledger. Credit: Surcharge ledger. |
|
|
Himachal Pradesh |
Fuels Used in Manufacture of Goods |
Debit: Expense ledger. Credit: VAT ledger. |
|
Goods disposed off otherwise than by sale |
Debit: Expense ledger. Credit: VAT ledger. |
|
|
Goods Given as Gift, Free Sample |
Debit: Expense ledger. Credit: VAT ledger. |
|
|
Goods Used in Telcom, Electricity and Other Power Generation |
Debit: Expense ledger. Credit: VAT ledger. |
|
|
Input Tax restricted Goods |
Debit: Expense ledger. Credit: VAT ledger. |
|
|
Left in Stock on Closure of Business or Cancellation of Regn. |
Debit: Expense ledger. Credit: VAT ledger. |
|
|
Himachal Pradesh |
No Invoice or Non-availability of Tax Details in Invoice |
Debit: Expense ledger. Credit: VAT ledger. |
|
Others |
Debit: Expense ledger. Credit: VAT ledger. |
|
|
Purchased on Concessional Rate of Tax |
Debit: Expense ledger. Credit: VAT ledger. |
|
|
Purchases from Un-Registered, Composition, Casual Dealers |
Debit: Expense ledger. Credit: VAT ledger. |
|
|
Purchases Used in Mfg. of Tax Free Goods |
Debit: Expense ledger. Credit: VAT ledger. |
|
|
Tax Adjustment Towards Transfer of Right to Use |
Debit: Expense ledger. Credit: VAT ledger. |
|
|
Tax Credit Disallowed in Respect of Branch/Consignment Transfer |
Debit: Expense ledger. Credit: VAT ledger. |
|
|
Jammu and Kashmir |
Adjustment Towards O/s Tax Liability Under the J&K VAT Act |
Debit: Expense ledger. Credit: VAT ledger. |
|
Others |
Debit: Expense ledger. Credit: VAT ledger. |
|
|
Partial Rebating |
Debit: Expense ledger. Credit: VAT ledger. |
|
|
Special Rebating |
Debit: Expense ledger. Credit: VAT ledger. |
|
|
Stock Transfer |
Debit: Expense ledger. Credit: VAT ledger. |
|
|
U/s 21(10) |
Debit: Expense ledger. Credit: VAT ledger. |
|
|
U/s 21(4) |
Debit: Expense ledger. Credit: VAT ledger. |
|
|
Jharkhand |
Attributable Input Tax Towards Exempted Sales |
Debit: Expense ledger. Credit: VAT ledger. |
|
Reversal on Common Inputs |
Debit: Expense ledger. Credit: VAT ledger. |
|
|
Karnataka |
Partial Rebating |
Debit: Expense ledger. Credit: VAT ledger. |
|
Pre-Registration Purchases |
Debit: Expense ledger. Credit: VAT ledger. |
|
|
Purchase Return |
Debit: Expense ledger. Credit: VAT ledger. |
|
|
Special Rebating |
Debit: Expense ledger. Credit: VAT ledger. |
|
|
Under Section 11 |
Debit: Expense ledger. Credit: VAT ledger. |
|
|
Kerala |
Not Applicable |
Debit: Expense/purchase ledger. Credit: VAT ledger. |
|
Capital Goods |
Debit: Ledger grouped under Fixed Assets. Credit: Ledger grouped under Current Assets. |
|
|
Deficit/Damage on Goods Sold |
Debit: Purchase ledger. Debit: VAT ledger. Debit: Cess ledger. Credit: Party/cash ledger. |
|
|
Madhya Pradesh |
Not Applicable |
Debit: Expense ledger. Credit: VAT ledger. |
|
Goods disposed off otherwise than by sale |
Debit: Expense ledger. Credit: VAT ledger. |
|
|
Goods Given As Gift, Free Sample |
Debit: Expense ledger. Credit: Purchase ledger. Credit: VAT ledger. |
|
|
Goods Used for Packing |
Debit: Expense ledger. Credit: VAT ledger. |
|
|
Inter State Stock Transfer |
Debit: Expense ledger. Credit: VAT ledger. |
|
|
Manufacturing of Exempt Goods |
Debit: Purchase ledger. Credit: VAT ledger. |
|
|
Others |
Debit: Purchase ledger. Credit: VAT ledger. |
|
|
Stock Transfer |
Debit: Expense ledger. Credit: VAT ledger. |
|
|
Tax Adjustment Towards Other Dealer’s Dues |
Debit: Party ledger. Credit: VAT ledger. |
|
|
Works Contract |
Debit: Expense ledger. Credit: VAT ledger. |
|
|
Maharashtra |
Non-Creditable Purchases |
Debit: Expense ledger. Credit: VAT ledger. |
|
Non-Creditable Purchases (Capital Assets) |
Debit: Expense ledger. Credit: VAT ledger. |
|
|
Purchases U/r 52A |
Debit: Expense ledger. Credit: VAT ledger. |
|
|
Purchases U/r 52B |
Debit: Expense ledger. Credit: VAT ledger. |
|
|
Purchases Used for Capital Assets U/r 54 |
Debit: Expense ledger. Credit: VAT ledger. |
|
|
Purchases Used for Others U/r 54 |
Debit: Expense ledger. Credit: VAT ledger. |
|
|
Odisha |
Capital Goods |
Debit: Purchase/expense ledger. Credit: VAT ledger. |
|
Exempted Goods |
Debit: Expense ledger. Credit: VAT ledger. |
|
|
Goods Damaged/Lost |
Debit: Expense ledger. Credit: VAT ledger. |
|
|
Goods Sold Below Purchase Price |
Debit: Purchase ledger. Credit: VAT ledger. |
|
|
Odisha |
Goods Unsold As per Section 16 |
Debit: Expense ledger. Credit: VAT ledger. |
|
Goods Unsold at the Time of Business Closure |
Debit: Expense ledger. Credit: VAT ledger. |
|
|
Interstate Sales |
Debit: Expense ledger. Credit: VAT ledger. |
|
|
Manufacturing of Exempt Goods |
Debit: Expense ledger. Credit: Purchase ledger. Credit: VAT ledger. |
|
|
Odisha |
Others |
Debit: Purchase ledger. Credit: VAT ledger. |
|
Reverse Credit on Goods Sold Other Than Interstate Sales |
Debit: Expense ledger. Credit: VAT ledger. |
|
|
Stock Transfer |
Debit: Expense ledger. Credit: VAT ledger. |
|
|
Switch Over |
Debit: Expense ledger. Credit: VAT ledger. |
|
|
Used in Mining and Electricity |
Debit: Expense ledger. Credit: VAT ledger. |
|
|
Puducherry |
Goods Lost, Stolen Or Destroyed, Used As Gift, Sample |
Debit: Purchase/expense ledger. Credit: VAT ledger. |
|
Tax Adjustment Towards Other Dealer’s Dues |
Debit: party ledger. Credit: VAT ledger. |
|
|
Tax Credit Disallowed in Respect of Branch/Consignment Transfer |
Debit: Purchase/expense ledger. Credit: VAT ledger. |
|
|
Punjab |
Apportionment of Input Tax for Tax Free Goods |
Debit: Expense ledger. Credit: VAT ledger. Credit: Surcharge ledger. |
|
Apportionment of ITC for Branch Transfer |
Debit: Expense ledger. Credit: VAT ledger. Credit: Surcharge ledger. |
|
|
Apportionment of ITC U/s 13(4) |
Debit: Expense ledger. Credit: VAT ledger. Credit: Surcharge ledger. |
|
|
Cash Discount on Purchase |
Debit: Party ledger. Credit: Purchase ledger. Credit: VAT ledger. Credit: Surcharge ledger. |
|
|
Goods Used in Manufacturing – Tax Free Goods (Exempted Unit) |
Debit: Purchase ledger. Credit: Purchase ledger. |
|
|
Punjab |
ITC on Goods Sent for Job Work |
Debit: Ledger grouped under Current Assets. Credit: VAT ledger. Credit: Surcharge ledger. |
|
Other ITC Adjustments |
Debit: Expense ledger. Credit: VAT ledger. Credit: Surcharge ledger. |
|
|
Other Purchase Adjustment |
Debit: Purchase ledger. Credit: Purchase ledger. |
|
|
Purchase Tax Sch. H Items |
Debit: Expense ledger. Credit: VAT ledger. Credit: Surcharge ledger. |
|
|
Trade Discount |
Debit: Party ledger. Credit: Purchase ledger. Credit: VAT ledger. Credit: Surcharge ledger. |
|
|
Rajasthan |
Interstate Sales |
Debit: Purchase ledger. Credit: VAT ledger. |
|
Stock Transfer |
Debit: Purchase ledger. Credit: VAT ledger. |
|
|
Switch Over |
Debit: Expense ledger. Credit: Purchase ledger. Credit: VAT ledger. |
|
|
Telangana |
Reversal on Common Inputs |
Debit: Expense ledger. Credit: VAT ledger. |
|
Uttarakhand |
Others |
Debit: Expense ledger. Credit: VAT ledger. |
|
Stock Transfer |
Debit: Expense ledger. Credit: VAT ledger. |
|
|
Uttar Pradesh |
— |
Debit: Expense ledger. Credit: VAT ledger. |
|
West Bengal |
Goods Damaged/Lost |
Debit: Purchase/expense ledger. Credit: VAT ledger. |
|
Goods Given As Gift, Free Sample |
Debit: Purchase/expense ledger. Credit: VAT ledger. |
|
|
Manufacturing of Exempt Goods |
Debit: Purchase/expense ledger. Credit: VAT ledger. |
|
|
Others |
Debit: Purchase/expense ledger. Credit: VAT ledger. |
|
|
Stock Transfer |
Debit: Purchase/expense ledger. Credit: VAT ledger. |
|
|
Transfer of Rights to Use Goods, Gifts Or Self Consumptions |
Debit: Purchase/expense ledger. Credit: VAT ledger. |
