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Tax Free Purchases (VAT)

You can record purchases of tax free goods by selecting the nature of transaction Purchase – Tax Free.

This nature of transaction is provided for Chandigarh, Delhi, Madhya Pradesh, Maharashtra, Punjab and Rajasthan.

Gateway of Tally > Vouchers > press F9 (Purchase).
Alternatively, press Alt+G ( Go To) > Create Voucher > press F9 (Purchase).
Enter the Supplier Invoice No. and Date.
Select the party ledger in the field Party A/c name.
Select the purchase ledger grouped under Purchase Accounts with the Nature of transaction set to Purchase – Tax Free.
As in other transactions, you can create the ledger on the fly by pressing Alt+C. Alternatively, press Alt+G (Go To) > Create Master > type or select Ledger > and press Enter.
Select the required stock item. Enter the Quantity and Rate.
Set the option Provide VAT details to Yes. In the Statutory Details screen:
- Enter the purchase details as shown below:
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Note: Options in the above screen appear based on the State selected in the Company VAT Details screen.
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- Press Enter to save and return to the purchase invoice. The purchase invoice appears as shown below:
Accept the screen. As always, you can press Ctrl+A to save.

The value of this transaction gets captured in the relevant fields of state-specific VAT/CST forms and annexures.