Create/Alter GST Classification Based on HSN/SAC in TallyPrime

TallyPrime allows users to create and modify GST classifications based on HSN (Harmonized System of Nomenclature) for goods and SAC (Service Accounting Code) for services.

By setting up GST classifications, businesses can apply the correct tax rates, reduce manual errors, and simplify GST return filing.

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1. Why Use GST Classifications in TallyPrime?

• Automates tax calculation for different goods and services.
• Ensures correct HSN/SAC details are applied in invoices.
• Helps in filing accurate GST returns (GSTR-1, GSTR-3B, and Annual Returns).
• Reduces manual entry errors.

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2. How to Create GST Classification Based on HSN/SAC in TallyPrime?

Step 1: Enable GST in TallyPrime

Before creating GST classifications, ensure that GST is enabled in your company.

1. Go to Gateway of Tally > F11 (Features) > GST.
2. Set ‘Enable Goods and Services Tax (GST)’ to Yes.
3. Enter the GST details such as Registration Type and GSTIN.

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Step 2: Create a GST Classification

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., “Electronics GST 18%”).
4. Under HSN/SAC Details, enter:
   • HSN Code (for Goods) or SAC Code (for Services).
   • GST Rate (e.g., 18% for Electronics).
   • Tax Type (Integrated, Central, and State Tax).
5. Press Enter and save.

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Example: Creating GST Classification for Laptops (HSN 8471)

1. Go to Gateway of Tally > Create > GST Classification.
2. Name it Laptops GST 18%.
3. Enter:
   • HSN Code: 8471 (for Laptops).
   • GST Rate: 18%.
   • Tax Type: IGST 18% or CGST 9% + SGST 9% (for intra-state transactions).
4. Press Enter and Save.

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3. How to Alter an Existing GST Classification in TallyPrime?

If GST rates change or HSN/SAC needs updating, follow these steps:

1. Go to Gateway of Tally > Alter > GST Classification.
2. Select the classification you want to update.
3. Modify HSN/SAC, GST Rate, or Tax Type.
4. Press Enter to save the changes.

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Example: Altering GST Rate for Laptops from 18% to 12%

If the government reduces GST on laptops (HSN 8471) from 18% to 12%:

1. Go to Gateway of Tally > Alter > GST Classification.
2. Select Laptops GST 18%.
3. Change GST Rate from 18% to 12%.
4. Press Enter and Save.

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4. Applying GST Classification to Stock Items and Ledgers in TallyPrime

Once you create a GST classification, you can apply it to:

1. Stock Items (for Goods)
2. Service Ledgers (for Services)
3. Sales/Purchase Ledgers (for Automatic Tax Calculation)

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Step 1: Apply GST Classification to Stock Items

1. Go to Gateway of Tally > Inventory Info > Stock Items > Alter/Create.
2. Select a stock item (e.g., Laptop).
3. In the GST Details section:
   • Enable GST for the item.
   • Select GST Classification (e.g., Laptops GST 12%).
4. Press Enter and Save.

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Step 2: Apply GST Classification to Service Ledgers

1. Go to Gateway of Tally > Accounts Info > Ledgers > Create/Alter.
2. Select a service ledger (e.g., Digital Marketing Services).
3. In the GST Details section:
   • Select GST Classification (e.g., Services GST 18%).
   • Enter SAC Code (e.g., 998365 for Digital Marketing Services).
4. Press Enter and Save.

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Step 3: Apply GST Classification to Sales/Purchase Ledgers

1. Go to Gateway of Tally > Accounts Info > Ledgers > Create/Alter.
2. Select Sales Ledger (e.g., Sales – Laptops).
3. In the GST Details section:
   • Select GST Classification (e.g., Laptops GST 12%).
4. Press Enter and Save.

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5. Impact of GST Classification in Invoices & Reports in TallyPrime

1. Invoice Generation

When you create a Sales or Purchase Invoice, TallyPrime will automatically fetch GST details from the selected GST Classification, ensuring accurate tax calculation.

2. GST Reports

• GSTR-1: HSN-wise sales details are auto-filled.
• GSTR-3B: Tax amounts based on GST classification are correctly captured.
• Annual GST Return: Proper classification helps in filing GSTR-9 without discrepancies.

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6. Example: Sales Entry Using GST Classification in TallyPrime

Scenario:
A trader sells Laptops (HSN 8471) with 12% GST to a customer.

Steps in TallyPrime:

1. Go to Accounting Vouchers > Sales Voucher (F8).
2. Select Party Ledger (Customer Name).
3. Select Stock Item: Laptop (linked to “Laptops GST 12%”).
4. GST is auto-calculated based on the classification.
5. Save and Print the invoice.

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7. Conclusion

By using GST classifications based on HSN/SAC in TallyPrime, businesses can automate tax calculations, reduce errors, and simplify GST return filing.

Setting up accurate GST classifications ensures smooth compliance and efficient tax management.