Home Tutorials Videos Q&A MCQ Shortcuts Exercises Appointment Login
Tutorial Exercises MCQ Test Interview Q&A
Lesson 35 of 48 – GST Configuration
70%

⚙️ GST Configuration in Tally Prime

Before recording GST transactions, you must configure GST correctly in Tally Prime. Proper GST configuration ensures that tax is calculated accurately and GST reports and returns are generated correctly.

Lesson Objective Learn how to enable GST, configure company GST details, create GST tax ledgers, configure stock items with HSN/SAC codes and verify GST settings.
1. What is GST Configuration?

GST Configuration is the process of enabling GST features in Tally Prime and entering all required GST information for the company, ledgers and stock items.

Configuration Area Purpose
Company GST Details Enable GST and enter GST registration information.
GST Ledgers Create CGST, SGST, IGST and other tax ledgers.
Stock Items Assign HSN Code and GST rate.
Party Ledgers Store GSTIN and registration type.
Invoices Print GST-compliant tax invoices.
2. Why is GST Configuration Important?
  • Calculates GST automatically.
  • Generates GST-compliant invoices.
  • Produces accurate GST reports.
  • Supports GST return preparation.
  • Reduces manual tax calculation.
  • Stores GSTIN and HSN/SAC details.
  • Improves accounting accuracy.
  • Ensures proper tax classification.
Incorrect GST configuration may lead to wrong tax calculations and inaccurate GST reports.
3. Enable GST in Tally Prime
Steps
  1. Open the required company.
  2. Press F11 (Features).
  3. Select Statutory & Taxation.
  4. Enable Goods and Services Tax (GST).
  5. Set Enable GST = Yes.
  6. Press Ctrl + A to Save.
After enabling GST, additional GST-related fields become available in company, ledger and stock item masters.
4. Company GST Details

Enter the company's GST registration details carefully.

Field Description
Registration Type Regular, Composition or other applicable type.
GSTIN/UIN 15-digit GST Identification Number.
State State in which the business is registered.
Applicable From Date from which GST applies.
Always verify the GSTIN, registration type and state before saving the company configuration.
5. GST Configuration Workflow
  1. Enable GST.
  2. Enter company GST details.
  3. Create GST tax ledgers.
  4. Create party ledgers with GST information.
  5. Create stock items with HSN/SAC codes.
  6. Assign GST rates.
  7. Create GST Purchase and Sales vouchers.
  8. Verify GST reports.
Correct GST configuration ensures smooth GST accounting, invoicing and reporting.
6. Creating GST Tax Ledgers (CGST, SGST & IGST)

GST Tax Ledgers are required to record GST collected and GST paid during purchase and sales transactions.

Steps to Create GST Ledger
  1. Go to Gateway of Tally → Create → Ledger.
  2. Enter the Ledger Name (Example: CGST 9%).
  3. Select Under : Duties & Taxes.
  4. Select Type of Duty/Tax : GST.
  5. Select the appropriate Tax Type (CGST/SGST/IGST).
  6. Enter the GST Percentage.
  7. Press Ctrl + A to Save.
Example GST Ledgers
Ledger Name Tax Type Rate
CGST 9% CGST 9%
SGST 9% SGST 9%
IGST 18% IGST 18%
Separate GST ledgers should be created for each applicable GST rate.
7. Configuring Party Ledgers with GST Details

Customer and Supplier ledgers should contain GST information to calculate GST correctly during transactions.

Steps
  1. Create or Alter a Party Ledger.
  2. Select the appropriate Group (Sundry Debtors or Sundry Creditors).
  3. Enable GST Details.
  4. Select the Registration Type.
  5. Enter the GSTIN.
  6. Select the State.
  7. Save using Ctrl + A.
Field Example
Registration Type Regular
GSTIN 10ABCDE1234F1Z5
State Bihar
Correct GST details ensure that Tally applies CGST, SGST or IGST automatically based on the transaction.
8. Configuring Stock Items (HSN Code & GST Rate)

Every taxable Stock Item should be configured with the correct HSN Code and GST Rate.

Steps
  1. Create or Alter a Stock Item.
  2. Enable GST Details.
  3. Enter the HSN Code.
  4. Select the applicable GST Rate.
  5. Save using Ctrl + A.
Stock Item HSN Code GST Rate
Dell Laptop 8471 18%
Printer 8443 18%
Notebook 4820 12%
LED Monitor 8528 18%
Always verify the correct HSN Code and GST Rate before saving the Stock Item.
9. GST Invoice Setup & Verification

After configuring GST, verify that invoices display GST details correctly.

Checklist Status
Company GST Enabled ✔
GSTIN Available ✔
Party GST Details Configured ✔
HSN Code Added ✔
GST Rate Applied ✔
CGST / SGST / IGST Calculated ✔
GST Invoice Printed ✔
Always verify a sample Purchase and Sales Invoice before starting regular GST transactions.
10. Common GST Configuration Mistakes
Common Mistake Correct Practice
GST not enabled in Company Features. Enable GST before creating ledgers.
Incorrect GSTIN. Verify the GSTIN carefully.
Wrong State selected. Select the correct registration state.
Incorrect HSN Code. Use the correct HSN Code for every item.
Wrong GST Rate. Apply the applicable GST percentage.
GST Details missing in Party Ledger. Complete all GST fields.
Missing GST Tax Ledgers. Create CGST, SGST and IGST ledgers properly.
Not verifying invoices. Test GST calculations before live billing.
Proper GST configuration ensures accurate tax calculation, correct GST invoices and reliable GST reports.
11. Real Business Case Studies

Let's understand how GST Configuration is used in different businesses.

Business GST Configuration Example
Computer Shop GST on Electronics Laptops, Printers and Accessories with HSN Codes.
Medical Store Medicine GST Medicines configured with applicable GST rates.
Manufacturing Company Purchase & Sales GST GST on Raw Materials and Finished Goods.
Service Company SAC Code Configuration Software Development and Consultancy Services.
Retail Shop GST Billing Automatic GST calculation on every invoice.
Wholesale Distributor Inter-State Sales Automatic IGST calculation for interstate supplies.
Proper GST configuration ensures correct tax calculation, GST invoices and GST return preparation.
12. Complete GST Configuration Checklist
Configuration Status
GST Enabled in Company ✔
GST Registration Type Selected ✔
Company GSTIN Entered ✔
State Selected Correctly ✔
GST Tax Ledgers Created ✔
Customer GST Details Added ✔
Supplier GST Details Added ✔
HSN / SAC Codes Configured ✔
GST Rates Configured ✔
GST Invoice Verified ✔
Purchase Voucher Tested ✔
Sales Voucher Tested ✔
GST Reports Verified ✔
Always complete the above checklist before recording actual GST transactions.
13. Professional GST Setup & Compliance Tips
  • Enable GST immediately after creating the company.
  • Verify the GSTIN before saving company details.
  • Create separate CGST, SGST and IGST ledgers.
  • Use correct HSN Codes for goods and SAC Codes for services.
  • Configure GST details for every customer and supplier ledger.
  • Apply the correct GST rate to every Stock Item.
  • Test Purchase and Sales vouchers before live billing.
  • Review GST reports regularly for accuracy.
  • Keep Tally Prime updated with the latest GST features.
  • Take regular backups before changing GST settings.
Professional accountants always verify GST calculations on sample invoices before beginning live business transactions.
14. Practical Exercise & Interview Questions
Practical Exercise
  1. Enable GST in a new company.
  2. Enter the company GST registration details.
  3. Create CGST, SGST and IGST ledgers.
  4. Create a customer ledger with GSTIN.
  5. Create a supplier ledger with GSTIN.
  6. Create a Stock Item with an HSN Code and GST rate.
  7. Create a Purchase Voucher and a Sales Voucher.
  8. Verify GST calculation in the invoice and GST reports.
Interview Questions
  1. What is GST Configuration?
  2. Why is GST Configuration required in Tally Prime?
  3. How do you enable GST?
  4. Where do you enter the company GSTIN?
  5. What is the purpose of GST tax ledgers?
  6. Which ledgers are required for GST?
  7. How do you configure a customer ledger for GST?
  8. How do you configure a supplier ledger?
  9. Why is the HSN Code important?
  10. What is the purpose of the SAC Code?
  11. How do you configure GST for Stock Items?
  12. What happens if the wrong GST rate is applied?
  13. How do you verify GST calculations?
  14. Which reports should be checked after configuration?
  15. What is the difference between CGST, SGST and IGST ledgers?
  16. How do GST invoices differ from normal invoices?
  17. Why should sample vouchers be tested?
  18. Can GST settings be modified later?
  19. What precautions should be taken before live billing?
  20. Why is GST Configuration important for accountants?
15. Lesson Summary
  • Learned the purpose of GST Configuration.
  • Enabled GST in Tally Prime.
  • Configured Company GST details.
  • Created GST tax ledgers.
  • Configured Customer and Supplier GST details.
  • Configured Stock Items with HSN Codes and GST rates.
  • Verified GST invoices and reports.
  • Studied practical business examples.
  • Prepared for GST interviews.
  • Built a strong foundation for GST accounting in Tally Prime.
Congratulations! You can now confidently configure GST in Tally Prime and prepare your company for accurate GST billing, accounting and statutory reporting.

🧠 Quick Quiz

Which GST ledger is generally used for an intra-state sale within the same state?



← Previous Next →