iist gorakhpur

1. Introduction

The software TallyPrime (and its earlier version Tally ERP 9) is widely used in India for accounting, inventory and tax compliance. Integrating the Goods & Services Tax (GST) regime into Tally requires understanding how to record transactions like advances (payments received or made before the final supply) and how GST is applied on those. This guide will walk you step-by-step through how to handle “advance + GST” in Tally.

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2. Pre-setup: Enabling GST in Tally

Before you record advances under GST, you need to ensure that GST features are enabled in your company. For example:

• Go to Gateway of Tally → F11: Features → Statutory & Taxation (or “Set/Alter Company Features”) and enable “Goods & Services Tax (GST): Yes” and “Set/Alter GST details: Yes”. (SBS)
• Then in the stock item or ledger master, set GST details such as HSN/SAC codes, tax rate etc. (TallyHelp)

This ensures that all subsequent transactions (like advances, purchases, sales) can capture GST correctly.

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3. Recording Advances Received under GST

When you receive an advance payment from a customer for goods or services yet to be supplied, GST law requires you to recognise the “time of supply” and possibly account for tax on the advance.
Here’s how you do it in TallyPrime:

1. Go to Gateway of Tally → Alt+G → Create Voucher → F6 Receipt (receipt voucher) or use the appropriate voucher type.
2. Press Alt+J (Stat Adjustment) and select:
   • Type of duty/tax → GST
   • Nature of Adjustment → “Advance Receipt” or similar. (TallyHelp)
3. Under the particulars, select the customer party ledger, enter the advance amount, provide taxable value. The system will calculate CGST/SGST or IGST as applicable.
4. After the full supply is made and invoice is issued, you adjust the advance against the sales invoice. Tally provides mechanisms for “Adjust GST Advances Received” so that the advance is set-off. (TallyHelp)

Key point: The advance receipt is reportable in your GST returns (for example, under Table 11A/11B of GSTR-1 for advances received).

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4. Recording Advances Paid under GST (Reverse Charge / Purchases)

If you pay an advance to a supplier (especially if supply falls under reverse charge mechanism), again GST rules apply and Tally supports this.
Procedure:

1. Go to Gateway of Tally → Alt+G → Create Voucher → F5 Payment (payment voucher).
2. Press Alt+J (Stat Adjustment) and select:
   • Type of duty/tax → GST
   • Nature of Adjustment → “Advance Payment Under Reverse Charge”. (TallyHelp)
3. Select bank/cash ledger, then select the supplier party ledger, enter advance payment amount, taxable value as appropriate. Tally will compute GST.
4. Later when the purchase bill comes, you adjust the advance payment using the Bill-wise details or similar. (TallyHelp)

This ensures your books reflect correct liability/credit under GST, especially when dealing with advance payments and reversals.

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5. Adjustments & Linking Advance to Final Invoice

Once the supply (goods or services) is finally delivered/issued and an invoice is generated, you need to adjust the advance. Some steps:

• For advances received: In the sales invoice, link the advance receipt reference. This ensures GST on advance is set off or accounted for properly. (TallyHelp)
• For advances paid: In the purchase invoice, you should set Bill-wise details or choose the reference to adjust the advance payment. (TallyHelp)
• In case the advance is refunded (if supply doesn’t happen), you should reverse the GST liability accordingly. (TallyHelp)

Correct linking ensures your GST returns show the advance portion correctly (either in advances tables, or in outward/inward supplies) and your accounting records match.

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6. GST Reporting – What Happens to Advances

When handling advances under GST, reporting in statutory returns is important.

• Advances received show up in your outward supply tables such as Table 11A/11B of GSTR-1 (advances received). (Reddit)
• Advances paid (under reverse charge) reflect in inward supplies / GSTR-2 (if your system still uses it) or relevant sections in your GST returns. (TallyHelp)
• If turnover is less than a threshold (e.g., ₹1.5 crore) and supply of goods, there may be exemptions or different treatment of advances. (TallyHelp)

So you must ensure your Tally settings and voucher types align with how GST expects advance transactions to be captured and reported.

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7. Step-by-Step Summary Table

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8. Helpful Link for Official Guidance

For detailed official instructions from Tally Solutions:
Record Advances Received Under GST in TallyPrime – link: TallyHelp – Advance Receipts (TallyHelp)
Record Advance Payments Under GST in TallyPrime – link: TallyHelp – Advance Payments (TallyHelp)

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9. Tips & Best Practices

• Always keep the voucher date aligned with the time of supply rule in GST — for advances this often means accounting for tax earlier than the final invoice. (TallyHelp)
• In Tally, enable Bill-wise details for parties so that you can track advances separately and adjust them properly when invoice comes.
• Make sure Masters (customer, supplier) have correct Registration Type (Registered / Unregistered) and State details because place of supply & tax rate depend on these.
• Regularly check the GST reports in Tally to verify that advances are appearing under the correct GST tables (so you don’t miss tax liability or input credit).
• If you have multiple GST registrations (state wise branches), ensure the advance setting applies for each. (TallyHelp)

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10. Conclusion

Handling advances in accounting often seems like a small nuance, but under the GST regime it matters quite a lot because the tax liability may arise before the supply is completed. Using Tally properly ensures that you record advances (received or paid), link them to final invoices, and report them correctly in your GST returns. With the step-by-step approach above + the official help links, you should be well set to manage “Advance + GST” in Tally.