The Institute of Computer Accountants

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1 The Institute of Computer Accountants 27, N. S. Road, 4th Floor, Kolkata YOUR RIGHT TO A JOB Tally.ERP 9 Release 5 Supplementary

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3 Tally.ERP 9 Release 5 Supplementary What s New in Tally.ERP 9 Release 5 Tally.ERP 9 Release 5 has developed to make your business management far easier and simpler form older versions. It is definitely one of Tally s biggest releases so far. The latest release is Tally.ERP 9 Release under the Tally.ERP 9 Release 5 series. The VAT forms provided in Tally.ERP 9 Release are currently available only for selected regions across India, namely Andhra Pradesh Assam Chandigarh Delhi Goa Gujarat Haryana Karnataka Kerala Maharashtra Odisha Puducherry Punjab Rajasthan Tamil Nadu Telangana Uttar Pradesh West Bengal The subsequent releases will provide the VAT forms for other states/countries. The key highlights of the release are the following: SIMPLIFIED INSTALLATION Installing and configuring a product which has multiple versions and features involves multiple screens, and choosing from an exhaustive list of options. In some cases, technical assistance or knowledge is required. Tally.ERP 9 Release 5.0 provides the convenience of selecting options from a single screen and complete the installation. Users do not have to identify the Windows OS version (32-bit or 64-bit) to install. Instead the installer detects the OS version automatically. Simplified installation, with minimal options, upgrade, and migration. A lightweight installer that automatically downloads and installs required files. Provides option to check for product updates. POST-DATED CHEQUE MANAGEMENT A Post-Dated Cheque (PDC) is a Cheque that the recipient can encash on a future date. Such Cheques are not payable until the date written on the face of the Cheque. In the accounting books of both the issuer and the recipient, the transaction will not be recorded until the date provided on the Cheque. For businesses, the task of validating and keeping track of post-dated Cheques, both issued and received, is tedious and timeconsuming. 1

4 Tally.ERP 9 now facilitates smooth management of post-dated Cheques and the underlying transactions: You can mark an entry as post-dated, and specify the date on which the Cheque was received or issued. This allows you to keep track of how long you have before the Cheque will be presented. While recording entries for payments and receipts, you can opt to view the party s current balance, and the balance after including the post-dated Cheque. The Cheque will not have an effect on the books of accounts until its date of presentation equals Tally. ERP 9 s Date of Last Entry. Thus, you don t have to wait till the Cheque s presentation date to record the transactions. This saves the time and effort required to keep track of the Cheques and record entries for them at the right time. You can obtain a comprehensive summary of all transactions involving post-dated Cheques using the Post-dated Summary report. You can track post-dated Cheques from the Cheque Register. You can link the PDC to a generic bank ledger, and then manually select the required bank after the Cheque has been presented from the Post-dated Issued/Post-dated Received report. The transaction will not be regularised until you have linked it to a bank, though its date of presentation has been reached. You can opt to include post-dated transactions in MIS reports such as Cash Flow and Funds Flow Statements, and other reports such as Ledger Vouchers, Group Summary, Outstanding s reports, etc. And when you are checking the Day Book, you can view the post-dated transactions for the period by just clicking T: Post-dated Rep button available in the report. You can opt to view reports with actual values, or values that include post-dated Cheques, using the New Column option. POWERFUL AND SIMPLIFIED STATUTORY FUNCTIONALITY: This functionality brings you to the best solution to manage your taxation in the simplest and most efficient manner. Release 5 gives you the experience of a hand-prepared return with intuitive intelligence designed to help you generate 100% accurate returns in a matter of minutes. With Release 5, you enjoy the complete flexibility to configure tax rates and classifications as applicable to your business as well as a simple and easy experience to record transactions. What s more, it also enables you to save your finalised returns which will help you to either modify them or prepare revised returns as appropriate. Triangulation Reports gives you clarity about Included Transaction, Excluded Transaction and uncertain transaction. Able to generate 100% accurate tax returns in a matter of minutes DATA SYNCHRONISATION: Data synchronisation enables you to replicate data between two or more instances of Tally.ERP 9 using a clientserver environment. On-Demand Data Synchronisation gives you the ability to share information across your locations in a simple, reliable and secure manner, without the need to be simultaneously connected to each other. On-demand synchronisation eliminates manual co-ordination between two end-points. ; ; The scale of simultaneous synchronisation from multiple systems is increased, as each system now operates independently, without disrupting another. 2

5 Tally.ERP 9 Release 5 Supplementary Data available at both client and server systems is reliable and consistent, as deleting of data reflects in both the systems. Flexibility is provided to perform data synchronisation as per requirement, and not at any fixed time. The TNS provides secure connection to ensure that there is no data loss even when synchronisation has not occurred for an extended period. DATA MIGRATION: Data migration in Tally.ERP 9 Release 5.0 allows you to seamlessly transfer data from an earlier release in a single, easy step. You can transfer data effortlessly from any of the earlier releases, and access it in Release 5.0. Data compatibility is ensured even in the earliest releases (prior to Tally 9) so that moving to Release 5.0 is easy. With data migration you will be able to: Transfer data from earlier releases to Release 5.0 in a single step. Rollback data to your previous release, if required. LIGHTER AND SWIFTER TALLY.ERP 9: Light and Swifter Tally.ERP 9 ensuring a highly optimised system memory usage, hassle free and efficient product update experience delivering only those updates which are relevant to you. Treatment of Service Tax in Tally.ERP 9 Here we will discuss the treatment of Service Tax in Tally.ERP 9 Release 5. The statutory enhancement for ST 3 reports enables you to identify and correct transactions recorded before filing service tax returns. All transactions, whether recorded correctly, incorrectly or inadequately will be captured and categorized in the new computation report. The categories are as follows: Included: These transactions will be a part of the service tax returns. This includes all sales, purchases, purchase returns, sales return, and adjustment entries where Service Tax is applicable. Excluded: These transactions are excluded while generating returns, as they do not carry the relevant Service Tax details. Uncertain: These transactions do not fall under either of the two categories included or excluded. Uncertain transaction provides you the possible errors and from there you may rectify the same of mark them as included and transaction. Using these ST3 reports, you can: View/verify transactions that are included for tax calculation/returns. Ascertain which transactions are listed as excluded or uncertain. Alter/correct information instantly for uncertain transactions. From 1 st June 2016 onwards the rate of Service Tax is 15% [including Swachh Bharat Cess 0.5% and Krishi Kalyan Cess 0.5%] applicable. SBC [Swachh Bharat Cess] paid on input services cannot be availed as Cenvat Credit. 3

6 Activating Service Tax It is one-time setup to enable Service Tax features in Tally.ERP 9: Go to Gateway of Tally F11: Features F3: Statutory & Taxation Set Enable Service Tax to Yes. Enable Set/Alter Service Tax Details to Yes. The Company Service Tax Details screen appears. Fill the required information as below. After enabling Set/alter service tax details you need to put required details: Name: Courier Services Service Tax: 14% Swachh Bharat Cess Krishi Kalyan Cess: 0.50% For abatement rate you need to enable the same from F12. If the rate of Service Tax has changed you just need to modify the rate and put rate of applicability. ; ; Enable Define service category and tax details as masters, if required. [If the tax rate is not matched with defined service tax details.] 4

7 Tally.ERP 9 Release 5 Supplementary Accept the screen after filling the required details, you will get Statutory & Taxation features screen. Fill the company PAN No. and press Enter to save. If the service tax details are not defined at the ledger, service category, group or item level, the details are captured from the company level. Treatment of proving output services Suppose, Alfa Distributors Pvt. Ltd. is a courier services provider. Company has sent the following bills to Galaxy Ltd. for the month of July 16. Sl. No. Date CN. No. Destination Weight (kg) Rate Amount Sreerampore Sovabazar Patna Malda Barackpore Hazipur Add: Service 15% Total Following sales entries are required for the above transactions: - Entry: Galaxy Ltd. A/c... Dr To Sales-Courier Service A/c To Service Tax A/c To Swachh Bharat Cess A/c To Krishi Kalyan Cess A/c Before passing the entries we create and configure required general ledgers. Required General ledgers for Service Sales Entry with Service Tax Party Ledger Service Sales Ledger Service Tax Ledger Swachh Bharat Cess Krishi Kalyan Cess 5

8 Party Ledger Details Service Sales Ledger Details 6

9 Tally.ERP 9 Release 5 Supplementary Service Tax Ledger Details Swachh Bharat Cess Ledger Details 7

10 Krishi Kalyan Cess Ledger Details Required Voucher Entry for the Sales Service Path: Gateway of Tally Accounting Voucher F8: Sales Press Alt+I or click on I: Account Invoice if the voucher is in Item invoice mode 8

11 Tally.ERP 9 Release 5 Supplementary Pass all sales entries like above, so at the end total sales value will be ` and Tax will be ` , so total balance will be (bill value+ tax value) or ( ) = Let s receive the entire due from Galaxy Ltd on 2 nd July, Cheque (#110052) of SBI received and deposited on the same day at SBI. Pass this entry. Input Service Purchase Entry Similarly, your company is enjoying the telecom service from Bharti Airtel Pvt. Ltd. There also company is paying some amount of tax. Suppose, bill for the month of June, 2016 is ` Entry: Telephone Charges A/C...Dr Service Tax A/c... Dr Swachh Bharat Cess A/c... Dr Krishi Kalyan Cess A/c...Dr To, Bharti Airtel Pvt. Ltd Before passing entry we will need to create required ledgers: Expense Ledger Details 9

12 Party Ledger Details We have already created Service Tax, Swachh Bharat Cess and Krishi Kalyan Cess Ledgers, so we will use the same for availing services as well. But if you want to maintain separate ledgers for input and output services you may create separate ledgers. Required Voucher Entry for the Sales Service Path: Gateway of Tally Accounting Voucher F9: Purchase 10

13 Tally.ERP 9 Release 5 Supplementary In cases where the invoice received from the service provider is inclusive of service tax, you need to press F12 and activate Allow entry of amount inclusive of tax for service tax ledger option. After that at the time of passing entry you need to put the amount inclusive of service tax. Transferred Swachh Bharat Cess to Expense Ledger 11

14 Payment made to Bharti Airtel of entire amount on 2 nd July, You need to pass the required entry. View Form ST3 Path: GOT Display Statutory Reports Service Tax Reports Form ST3 12

15 Tally.ERP 9 Release 5 Supplementary Service Tax Credit If any person pays any service tax on receipt of input service, he can adjust the same against the service tax payable on output service provided. This adjustment is called Service Tax Credit. Press Alt+J from FORM ST3 to pass the service tax adjustment entry See FORM ST3 after passing adjustment entry 13

16 Payment of Service Tax Press Alt+S from FORM ST3 to pass service tax payment entry After passing the service tax payment entry it will show in Payment Details Tax Payments not (included), you just need to press enter key and give challan details so that it will update in Tax Payment (Included) section. After that it will updated in Service Tax return. Generate FORM ST3 Go to FORM ST3 and press to save the return. If there are any further changes you may save revise return. To Print or Export FORM ST3 Go to Path: GOT Display Statutory Reports Service Tax Reports Return Transaction Book Press Ctrl+P to Print FROM ST3 or Press Ctrl+E to export e-return. Reverse Charge Mechanism Step 1: Press F11 F3 Enable is reverse charge applicable option from Service Tax Details window 14

17 Tally.ERP 9 Release 5 Supplementary Step 2: Create required ledgers Similarly, you need to create party ledger. Step 3: Pass required entries Purchase Entry: As this is fall under full reverse charge, we did not charge any service tax in the invoice. But in case of partial reverse charge mechanism we need to define the provider tax liability in the Service Category Creation window and accordingly charge service tax on invoice. 15

18 Payment to Party: In Tally.ERP 9 Release 5 we just need to pass a payment entry to party and not need to pass any adjustment entry. After passing the payment entry, view Form ST3. In Form ST3 Service Tax Payable-Receiver s Liability will updated. 16

19 Tally.ERP 9 Release 5 Supplementary Step 4: Service Tax Payable entry Receiver s Liability Treatment of VAT in Tally.ERP 9 Activating VAT It is one-time setup to enable VAT features in Tally.ERP 9: Go to Gateway of Tally F11: Features F3: Statutory & Taxation Set Enable Value Added Tax (VAT) to Yes. Enable Set/Alter VAT Details to Yes. The Company VAT Details screen appears. Fill the required information as below To enable CST rate and commodity details, Click F12: Configure and enable required fields to display it in VAT Rate/Inventory Info screen. Enter the required CST and VAT rate 17

20 Enable Set/alter tax/rate details? to view the Tax/Rate Details screen. A single VAT rate for all stock items in a company can be defined in this screen. Set the option Enable VAT calculation on quantity to Yes to calculate tax on quantity. ; ; Enable the option Define VAT commodity and tax details as masters? if separate VAT classifications have to be created for each tax rate. These classifications can be applied to ledgers, stock items or stock groups. 18

21 Tally.ERP 9 Release 5 Supplementary Purchase from Regular Dealer We need to create the following ledgers to pass the transaction purchase from regular dealer Sundry Creditor Ledger Select type of dealer as Composition or Unregistered in case you purchased from them. Here we select Regular as dealer type as we purchase the product from regular dealer. 19

22 Purchase Ledger: VAT Ledger: Inventory Details: 20

23 Tally.ERP 9 Release 5 Supplementary Purchase Entry: VAT Report: Path: GOT Display Statutory Reports VAT Form 14 21

24 Sales Entry: Like purchase here also you need to create required ledgers first. So, you need to create Sales Ledger and Party Ledger. Here we use the same VAT Ledger for Sales Entry also. But if you want you may create different ledgers for Input VAT and Output VAT. VAT Report: Path: GOT Display Statutory Reports VAT Form 14 22

25 Tally.ERP 9 Release 5 Supplementary VAT Payment Entry: You can directly pass VAT payment entry without passing any adjustment entry in Tally.ERP 9 Release 5. From VAT report just press Alt+S, fill statutory details VAT payable amount will automatically appear in VAT Payment entry. From VAT report you can save return. Different VAT rate in same invoice: Before passing entry you need to configure VAT details of stock items like the below mentioned figure 23

26 Purchase from Outside India [Import]: Press F12 from purchase voucher Enable Allow modification of tax details for VAT option Select classification/nature - Imports 24

27 Tally.ERP 9 Release 5 Supplementary Interstate Sale: At the time of creating party ledger, define address with state name and VAT details. 25

28 MRP with VAT At the time of product creation press F12 and activate Allow MRP/Marginal for stock items option and define MRP details. Go to sales voucher press F12 and activate Allow entry of rate inclusive of tax for stock item option, then pass the entry. [An optional option if you want then activate] 26

29 Tally.ERP 9 Release 5 Supplementary Purchase Capital Goods: Fixed Assets Ledger: Input credit on Capital Goods [West Bengal] Capital goods, as referred to in clause (6) of section 2 of the record, are purchased by a registered dealer for manufacture of taxable goods for sale or, for execution of works contract or, to keep the goods in saleable condition or, to effect the sale properly, the input tax credit or input tax rebate on such capital goods shall be staggered over a period, as specified in the Table below, starting from the month in which such capital goods were capitalised in the books of account of the dealer: Purchase price of capital goods Not exceeding one crore rupees Above one crore rupees Number of instalments One installment Four half yearly 27

30 The rule may differ state wise. At the time of claiming input credit on capital goods check the rule of respective states then pass the entry. If the machinery valuation is above 1 crore, then create an additional ledger Input VAT on Machinery under Misc. Expenses (Asset) and select remaining amount against this ledger. Also after 6 months need to pass an adjustment entry. Let s understand the same with example: Machinery Purchase Entry: Particular Debit Credit Machinery 1,50,00,000 VAT 1,87,500 Input VAT on Machinery 5,62,500 Party 1,57,50,000 Adjustment entry 2 nd installment onwards: Particular Debit Credit VAT 1,87,500 Input VAT on Machinery 1,87,500 Treatment of TDS in Tally Activating TDS: 28

31 Tally.ERP 9 Release 5 Supplementary TDS on Expenses: At first we need to create required ledgers: Party Ledger: 29

32 Expense Ledger: TDS Ledger: Entry for interest charged: 30

33 Tally.ERP 9 Release 5 Supplementary Pass a payment entry for interest payment. TDS Report: Path: Gateway of Tally Display Statutory Reports TDS Reports Form 26Q Payment made for TDS: Press Alt+S from FORM 26Q to paid TDS to Government 31

34 Press Alt+P from TDS payment entry to print TDS Challan. Challan Reconciliation: TDS on Advance Payment: Advance Payment: As the PAN details of the party is not available 20% tax deducted. 32

35 Tally.ERP 9 Release 5 Supplementary Issued invoice to Party: Treatment of TDS and Service Tax: 33

36 FORM 26Q 34

37 Tally.ERP 9 Release 5 Supplementary Treatment of Central Excise in Tally Enabling Excise in Tally Excise Book Creation: Gateway of Tally Accounts Info Statutory Info Excise Book Create Creation of Purchase & Sales Ledger: 35

38 Creation of Customers: Creation of Suppliers / Vendors: 36

39 Tally.ERP 9 Release 5 Supplementary Creation of Excise Duty Ledger: 37

40 Creation of Manufacturing Journal: Gateway of Tally Accounts Info. Voucher Type Create Manufacturing Journal is used to account the issue of raw materials to production floor and for the receipt of finished goods. Creation of Stock Items: Similarly create other stock items. 38

41 Tally.ERP 9 Release 5 Supplementary Purchase of Raw Materials: 39

42 Purchase of Capital Goods: Transferring 50% credit: 40

43 Tally.ERP 9 Release 5 Supplementary Manufacture of Finished Goods: Sale of Finished Goods: 41

44 FORM ER 1: Gateway of Tally Display Statutory Reports Excise Reports Manufacturer Excise Forms Form ER 1 42

45 Tally.ERP 9 Release 5 Supplementary CENVAT Credit Adjustment: FORM ER 1 after CENVAT Adjustment: 43

46 Payment of Excise Duty: 44

47 Tally.ERP 9 Release 5 Supplementary NOTES 45

48 46 NOTES