Day 20: Enable & Set Up GST in TallyPrime
✅ Today you will learn
- Enable GST and enter the company’s GST registration
- Create tax ledgers under Duties & Taxes
- Set HSN and GST rate on stock items
- Set registration type, GSTIN and state on party ledgers
- Check the setup before the first invoice
🏢 In the real world
Nine out of ten GST mistakes in TallyPrime come from setup, not from voucher entry: a wrong state on a party gives IGST instead of CGST+SGST, a missing HSN breaks the GSTR-1 summary, an item marked taxable instead of exempt overcharges the customer. Set it up right once and every invoice calculates itself.
Company GST details
- 1F11 → Enable Goods and Services Tax (GST) = Yes.
- 2In the GST details screen: State Uttar Pradesh, Registration type Regular, GSTIN/UIN, Applicable from 1-6-2026.
- 3Set GSTR-1 periodicity (monthly or quarterly), and whether e-way bill and e-invoicing apply (Day 23).
- 4Ctrl+A. Rates can be set at company, group, ledger or item level – item level is the most accurate.
Tax ledgers
| Ledger | Under | Type of duty/tax | Tax type |
|---|---|---|---|
| Output CGST | Duties & Taxes | GST | Central Tax |
| Output SGST | Duties & Taxes | GST | State Tax |
| Output IGST | Duties & Taxes | GST | Integrated Tax |
| Input CGST | Duties & Taxes | GST | Central Tax |
| Input SGST | Duties & Taxes | GST | State Tax |
| Input IGST | Duties & Taxes | GST | Integrated Tax |
TallyPrime can work with just three ledgers (CGST, SGST, IGST) for both input and output. Separate Input and Output ledgers make the trial balance easier to read and reconcile with GSTR-3B, so most offices prefer six.
GST on stock items
Alter each stock item → GST Rate & Other Details: HSN/SAC, taxability type and rate. Enter the integrated (IGST) rate – TallyPrime splits it into CGST and SGST for local sales.
| Item | HSN | Taxability | IGST rate | CGST = SGST |
|---|---|---|---|---|
| A4 Copier Paper 75 GSM | 4802 | Taxable | 18% | 9% |
| Ball Pen Blue | 9608 | Taxable | 18% | 9% |
| Notebook 200 Pages | 4820 | Exempt | – | – |
Exempt and nil-rated supplies carry no tax and no ITC on related inputs. Zero-rated (exports, SEZ) carry no tax but ITC is allowed. Pick the right taxability type – it decides where the sale appears in returns.
Party ledgers
| Party | Under | Registration type | GSTIN | State |
|---|---|---|---|---|
| Sai Traders | Sundry Creditors | Regular | 09XXXXX0001X1Z1 | Uttar Pradesh |
| Capital Office Supplies (Delhi) | Sundry Debtors | Regular | 07XXXXX0002X1Z2 | Delhi |
| Gupta School | Sundry Debtors | Unregistered/Consumer | – | Uttar Pradesh |
Sales and Purchase ledgers: keep GST applicability as applicable and type of supply as Goods; the rate comes from the item. For a service income ledger (e.g. Commission Received) set the SAC and rate on the ledger itself.
Solved examples
Example 1: Spot the setup error
| What you see on the invoice | Setup error | Fix |
|---|---|---|
| IGST charged to a customer in Agra | Party state set to another state (or GSTIN of another state) | Alter party: State = Uttar Pradesh, correct GSTIN |
| 18% GST on notebooks | Item taxability left as Taxable | Alter item: Taxability = Exempt |
| No tax at all on copier paper | GST rate not entered on the item (and none at group/company level) | Enter HSN 4802 and IGST rate 18 on the item |
| GSTR-1 shows “uncertain transactions” | Missing HSN, GSTIN or registration type | Open the report, drill into the exceptions and complete the masters |
Practice exercises (unsolved – answer hidden)
Try each exercise on paper or in TallyPrime first, then open the answer to check.
🏋️ Practice – do it yourself
Show solution
Item: HSN 4820, Taxable, IGST 18%. Party: Sundry Debtors, Registration type Unregistered/Consumer, State Uttar Pradesh. Mathura is in UP, so CGST ₹450 + SGST ₹450; invoice ₹5,900 (B2C).Show solution
Because CGST and SGST are always half of IGST. TallyPrime uses the full rate for inter-state supplies and splits it equally for intra-state supplies, based on the party’s state and place of supply.🏅 Job skills unlocked today
Quick quiz
🧠 Quick Quiz – test yourself
Interview corner
💼 Interview Corner
At which levels can GST rates be defined in TallyPrime, and which do you prefer?
Company, stock group, ledger (sales/purchase/service) and stock item. Item level (and ledger level for services) is the most precise because each HSN can have its own rate.
What is the difference between exempt and zero-rated supply?
Both carry no output tax, but ITC on inputs is not allowed for exempt supplies while it is allowed (or refundable) for zero-rated supplies like exports.
Summary
- F11 → Enable GST; enter state, registration type, GSTIN, applicable date.
- Tax ledgers under Duties & Taxes with type GST and tax type Central/State/Integrated.
- Items carry HSN, taxability and IGST rate; parties carry registration type, GSTIN and state.
- Most GST errors are setup errors – check masters first.
Day 21: GST sales and purchase invoices in TallyPrime – local, inter-state, B2B and B2C.
Frequently Asked Questions
Can one TallyPrime company have two GSTINs?
Do I need HSN codes on invoices?
Tally and TallyPrime are trademarks of Tally Solutions Pvt. Ltd. This is an independent course, not affiliated with or endorsed by Tally Solutions. All business names, GSTINs and figures in the examples are fictional samples.
