GST Classification for Cess Based on Quantity or Value in TallyPrime

TallyPrime allows users to create and modify GST classifications for Cess, which can be calculated either based on quantity (per unit) or value (percentage of the item’s price).

This is particularly useful for industries where additional cess is applicable, such as tobacco, aerated drinks, and luxury cars.

---

1. What is Cess in GST?

GST Compensation Cess is a tax imposed over and above the standard GST rates on certain goods and services, such as:

• Luxury items (e.g., high-end cars)
• Tobacco products
• Aerated beverages
• Coal and other specific items

Cess can be applied in two ways:

1. Based on Quantity – Fixed amount per unit (e.g., ₹5 per liter of aerated drink).
2. Based on Value – Percentage of transaction value (e.g., 10% of the selling price).

---

2. How to Create GST Classification for Cess Based on Quantity/Value in TallyPrime?

Step 1: Enable GST & Cess in TallyPrime

1. Go to Gateway of Tally > F11 (Features) > GST.
2. Set “Enable Goods and Services Tax (GST)” to Yes.
3. In “Set/Alter GST Details”, set:
   • “Enable GST Cess?” → Yes.
   • Specify Calculation Type (Quantity or Value).

---

Step 2: Create a GST Classification with Cess

1. Go to Gateway of Tally > Create > Statutory Info > GST Classifications.
2. Click Create (Alt + C).
3. Enter a Name for the GST Classification (e.g., “Luxury Cars 20% Cess”).
4. Under HSN/SAC Details, enter:
   • HSN Code (for Goods) or SAC Code (for Services).
   • GST Rate (e.g., 28% for luxury cars).
   • Cess Type:
     • Based on Quantity – Enter fixed cess per unit.
     • Based on Value – Enter percentage-based cess.
5. Press Enter and save.

---

3. Example: Cess Based on Quantity in TallyPrime

1. Scenario

A company sells aerated drinks (HSN 2202), which attract 18% GST and Cess of ₹5 per liter.

2. Steps in TallyPrime

1. Go to Gateway of Tally > Create > GST Classification.
2. Name it “Aerated Drinks GST 18% + Cess ₹5 per Liter”.
3. Enter:
   • HSN Code: 2202.
   • GST Rate: 18%.
   • Cess Type: Based on Quantity.
   • Cess Rate: ₹5 per liter.
4. Press Enter and Save.

---

4. Example: Cess Based on Value in TallyPrime

1. Scenario

A dealer sells luxury cars (HSN 8703), which attract 28% GST and Cess of 20% on the transaction value.

2. Steps in TallyPrime

1. Go to Gateway of Tally > Create > GST Classification.
2. Name it “Luxury Cars GST 28% + Cess 20%”.
3. Enter:
   • HSN Code: 8703.
   • GST Rate: 28%.
   • Cess Type: Based on Value.
   • Cess Rate: 20%.
4. Press Enter and Save.

---

5. How to Alter GST Classification for Cess in TallyPrime?

If there are government rate changes or business-specific updates, follow these steps:

1. Go to Gateway of Tally > Alter > GST Classification.
2. Select the classification to modify.
3. Update GST rate, Cess type, or HSN/SAC code.
4. Press Enter to save the changes.

---

6. Applying GST Classification with Cess to Stock Items in TallyPrime

After creating a GST Classification, you can apply it to stock items to ensure correct tax calculations.

Steps

1. Go to Gateway of Tally > Inventory Info > Stock Items > Alter/Create.
2. Select a Stock Item (e.g., Luxury Car – BMW X7).
3. Enable GST for the item.
4. Select the GST Classification (e.g., “Luxury Cars GST 28% + Cess 20%”).
5. Press Enter and Save.

---

7. Effect of Cess in Sales Invoice in TallyPrime

When recording a sales transaction, TallyPrime will automatically apply cess as per the GST classification.

Example: Sales Entry with Cess

1. Scenario

A dealer sells a 500ml aerated drink (HSN 2202) at ₹50 per bottle, with:

• GST: 18%
• Cess: ₹5 per liter (₹2.50 per 500ml bottle)

2. Steps in TallyPrime

1. Go to Accounting Vouchers > Sales Voucher (F8).
2. Select Customer Ledger.
3. Select Stock Item: Aerated Drink (500ml).
4. GST and Cess are auto-applied.
5. Save and print the invoice.

Invoice Calculation:

Item	Price	GST (18%)	Cess (₹5/liter)	Total
Aerated Drink (500ml)	₹50	₹9	₹2.50	₹61.50

---

8. GST Reports with Cess Details in TallyPrime

Once cess is applied, it reflects in GST reports:

GSTR-1

Section: 12 (HSN Summary) → Shows HSN-wise GST and Cess details.

GSTR-3B

Section 3.1 (Outward Supplies) → Cess values are reported separately.

GST Annual Return (GSTR-9)

Part II, Table 4 & 5 → Captures taxable value, GST, and Cess.

---

9. Conclusion

• TallyPrime allows easy configuration of GST Cess based on Quantity and Value.
• Correct cess application ensures compliance with GST laws and accurate tax calculations.
• Automatically updates GST reports, reducing manual errors and streamlining tax filing.