GST Purchase Entry in Tally Prime: 3 Types Explained (2026)

Filing GST returns and claiming Input Tax Credit (ITC) requires error-free data entry in your purchase book. In Tally Prime, passing a GST purchase entry correctly is vital for matching the purchase register with the GSTR-2B statement. Even minor discrepancies in GSTIN, HSN codes, or tax splits can lead to tax department notices or loss of ITC.

1. Basic Rules of GST Purchase in Tally

Before entering any voucher, you must ensure that your company's GST details are enabled. Go to F11 Features > Enable Goods and Services Tax (GST) and verify your GSTIN/UIN, registration type (Regular), and applicable dates.

To ensure calculations happen automatically in your purchase voucher:

• Stock Items: Set the correct HSN code, tax rate (e.g., 5%, 12%, 18%, 28%), and taxability (Taxable) inside the Stock Item creation menu.
• Tax Ledgers: Create distinct ledgers for CGST, SGST, and IGST under the Duties & Taxes group, selecting GST as the duty type.
• Party Ledgers: Ensure the supplier ledger is created under Sundry Creditors, with their correct state, country, and active GSTIN.

2. Local/Intrastate Purchase Entry (CGST + SGST)

A local purchase occurs when a supplier is registered in the same state as your business. Taxes are split equally into Central Tax (CGST) and State Tax (SGST).

Step-by-Step Entry:

1. Open the Vouchers screen (Gateway of Tally > Vouchers) and press F9.
2. Enter the supplier's invoice number and date.
3. In Party A/c Name, select the local supplier.
4. Select your main Purchase Ledger.
5. Select the stock item, input quantity, and rate.
6. After the items, select the **Input CGST** ledger and the **Input SGST** ledger. Tally will automatically calculate the tax amounts based on the item's GST configuration.
7. Press **Ctrl+A** to save.

3. Interstate Purchase Entry (IGST)

Interstate purchases apply when the supplier's state differs from your state of registration. The tax levied is Integrated GST (IGST), representing the full combined tax rate.

Key Setup Check:

Ensure that the state specified in the Party Ledger matches the supplier's physical location (e.g., Maharashtra for a Mumbai supplier if your business is in Karnataka). If the state code does not align with the GSTIN prefix, Tally will trigger a validation error.

1. In the **F9 Purchase** voucher, select the out-of-state vendor.
2. Verify the State in the party console.
3. Add the items to the grid.
4. Under the item list, select the **Input IGST** ledger. Tally will automatically apply the combined tax percentage.

4. Reverse Charge Mechanism (RCM) Purchase Entry

Under RCM (Reverse Charge Mechanism), the liability to pay tax shifts from the supplier to the buyer. This commonly applies to legal services, GTA (Goods Transport Agency) services, or purchases from unregistered dealers in specific cases.

How to Pass RCM Purchase Voucher:

1. In the **F9 Purchase** voucher, press **Ctrl+H** and select **Accounting Invoice**.
2. Select the service provider's ledger.
3. Select the expense ledger (e.g., *Legal Fees*). Ensure the ledger has 'Is Reverse Charge Applicable' set to *Yes* in its tax settings.
4. Save the purchase entry. Note that GST ledgers will **not** automatically compute tax values at this stage, as you do not pay tax to the supplier.
5. To book the tax liability: Go to **Vouchers > F7 Journal > Stat Adjustment**.
6. Set Type of Duty as *GST*, Nature of Adjustment as *Increase of Tax Liability & Input Tax Credit*.
7. Debit the tax expense / ITC ledgers and Credit the RCM tax liability ledgers.

5. Handling Composition, Exempt, and Unregistered Dealers

Not all suppliers will provide standard GST tax invoices. It's important to configure Tally to handle these situations correctly:

6. Automating GST Purchase Entry and GSTIN Verification

Processing large numbers of purchase bills manually leads to mistakes:

• Mismatches in GSTIN characters that invalidate ITC claims.
• Typographical errors in HSN codes causing compliance audit issues.
• Applying local taxes CGST+SGST to an interstate bill by mistake.

With **TrulyInvoice**, you eliminate manual entries entirely. By simply dropping your PDF purchase bills or scanned receipts onto the platform, our AI extracts the data, validates the supplier's GSTIN format and checksum structure, checks the tax splits, maps ledger designations, and automatically posts the complete transaction into Tally Prime.

Frequently Asked Questions