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Reversal of Notional Tax Credit (VAT)

You can record a journal voucher to reverse the notional tax credit for Chandigarh and Punjab.

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 Notional Input Tax.
- Additional Details – on Account of Sales.
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Note: Based on the selection made for Nature of Adjustments, the Additional Details option either appears or disappears.
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- Press Ctrl+A to return to the voucher.
Debit the expense ledger and enter the amount.
Credit the output VAT ledger. Enter the tax Rate and Assessable Value in the VAT Details screen. The journal voucher appears as shown below:
Accept the screen. As always, you can press Ctrl+A to save.

The states with Reversal of Notional Input Tax available as the Nature of Adjustment are given below:

State Name	Nature of Adjustment	Additional Details	Voucher Entry
Chandigarh	Reversal of Notional Input Tax	on Account of Sales	Debit: Expense ledger. Credit: VAT ledger.
		on Branch Transfer and Consignment	Debit: Expense ledger. Credit: VAT ledger.
		on Purchase Return	Debit: Expense ledger. Credit: VAT ledger.
Punjab	Reversal of Notional Input Tax	on Account of no stock	Debit: Expense ledger. Credit: Notional tax ledger.
Punjab	Reversal of Notional Input Tax	Purchases Not Eligible for Notional ITC U/S 13(5)	Debit: Expense ledger. Credit: Notional tax ledger.