How anyone can prepare GST Returns in Tally ERP.9?

It is very much easy to prepare GST returns in Tally.ERP 9 (simply Tally) because you do not have to actually prepare the returns.

You just have to create Sales and Purchase bills and the returns will be created automatically. Yes, it is that easy and simple.

Simply create a sales bill and your GSTR-1 will be prepared or create a purchase bill and GSTR-2 will be prepared. GSTR-3B will be prepared automatically from the information imported from GSTR-1 and GSTR-2. (For more information on, what are GSTR 1, GSTR 2 & GSTR 3 Forms, you may kindly go through this article..)

We have to take care while creating the Sales and Purchase bills and everything else will be taken care of by Tally.

In this post, I am going to explain you, how you can create a Sales and Purchase bills in Tally even though you may not have the required accounting knowledge.

Before you can create Sales and Purchase bills in Tally, you need to enter your own GST details in Tally if you have not yet configured Tally for GST.

Let’s start with configuring Tally for GST.

Configuring Tally for GST

It is small 3-step process to configure or enable GST details in Tally after you open Tally. Here you go.

  • From Gateway of Tally, press F11 for Features menu which is on the bottom right hand side of the screen.Features Menu on the bottom right hand side of the screen
  • Secondly, go to Statutory & Taxation from the Company Features menu.

Now, you will see two options for GST. One for enabling it and one for setting it up. Type Yes in both of them.

As soon as you set Yes in the second option, you will see a screen to setup GST details in Tally for your business.

You will see a simple screen to enter the required details as in the picture below.Setting up GST details in Tally GST Tax filing returns preparation online

  • This is the third step. Enter the required details and you have successfully setup your GST details in Tally.

In the option – Set/Alter GST rate details, you have to enter the rate of GST which your business generally attracts. If it is 18%, set it as 18%.

If your business attracts more than one rate, enter the rate which is most used by you. We’ll talk later about items with different rates.

After the third step, you have successfully configured Tally for GST. We will now move forward and enter a Sales bill and see how the GSTR-1 is automatically created in Tally. It’s magic.

Creating a GST Sales Bill in Tally

Creating a GST sales bill in Tally is as simple as creating a simple sales bill by hand, but this time in a digital format.

As Tally is primarily used for accounting, the sales bill is called Sales Voucher but it is simply the creation of a sales bill.

Let’s start and enter a sales bill in Tally.

  • From Gateway of Tally, go to Accounting Vouchers.
  • Press F8 which is the shortcut for Sales.

Now, before entering the sales bill, you need to alter one option so that you can enter items with different rates of GST in the same bill.

  • Press F12 which will open up the configuration menu. There is an option called use common ledger account for item allocationSet it to No and press CTRL+A to save it.Not using common ledger for item allocation Invoice Sales Bills Purchase bills preparation for GST

Now, the real fun begins. Let us take an example before we enter the sales bill. We are selling 10 pen-drives for Rs 1,000 each & 5 SD cards for Rs 500 each.

GST rate for pen-drives is 18% and SD cards is 10%. This is just an example and the actual rates may be different on the above products.

Let’s create a sales bill and in the process, I’ll show you when and how to enter the purchaser’s or debtor’s GST details as well as applying different rates for different products.

  • Firstly, enter the date of the bill in the top right corner of the screen.
  • Now in the Party A/c name, you have to enter the name of the person to whom you sold the products.
  • Press ALT+C to create a new account for entering the details of your debtor.
    • Let’s say the name is Rohit. It will be under Sundry Debtors. Select that option from the list.
    • Now, directly come to the option Inventory Value are affected and set it to Yes since we will have to enter the pen-drives and SD cards.
    • On the right-hand side, you will have to select the particular State of the person to whom you are selling.
    • Now, directly come to Set/Alter GST details Set the GST details as I’ve shown in the picture below and press CTRL+A exactly 2 times to save all the details.Setting up GST details for Debtor in Tally
  • Now you will be again in the sales bill. We will now create two different items for pen-drive and SD card. They are called Stock Items in Tally.Entering Sales bill in Tally
  • When you are at the place as shown in the picture above, press ALT+C again to create a Stock Item.
    • Enter the name i.e. Pen-Drive. Press Enter and select primary as the group.
    • Now comes the option units. Press ALT+C once again to create units. Enter unit which in our case is numbers. I’ll write no for short. See the picture below to have more clarity.Creation of stock item unit in Tally
  • Now on the right-hand side, we have to enter the GST rate details for our product which is 18% for pen-drives.
  • Press Yes for Set/Alter GST details and enter the rate 18% along with entering the HSN and Description.
  • For Calculation Type, select On Value.GST details for pen-drives in Tally
  • Look at the picture above and set the options exactly as I have done it and save the details by pressing Enter at the end.
  • For Type of Supply, set it to Goods since we are selling goods.
  • Now, in Opening Balance, enter the details of quantity, rate and value. I’ve put the rate at Rs 600 for pen-drives since that is our purchase price and we will be selling them for a profit at Rs 1,000. Look at the picture below for better understanding.Stock Item creation in Tally
  • Press CTRL+A and save the details.
  • Similarly, create the Stock Item for SD cards but with the rate of 10% instead of 18%. The process is exactly the same as above.
  • I have put the opening balance for SD cards as under.
    • Quantity – 5
    • Rate – Rs 250
  • Now, we will be entering the product Pen-drive first. Enter the quantity, rate and amount as per the example we have taken above.Entering Stock Item in Tally
  • Press Enter and a small window will open up in which you have to enter the sales ledger. It is nothing but a way to differentiate between different types of sales according to the rates of GST.
  • So, we have to create two sales ledgers since we have two different items attracting different GST rates.
  • The process is almost the same. Press ALT+C when you are in the small window to create a sales ledger. Creating sales ledger is almost same as creating Sundry Debtor.
    • Go ahead and enter the name as Sales-18% since this item attracts 18% GST.
    • In Set/Alter GST Details, enter the GST details. In Nature of Transaction, enter Sales Taxable as the sales are taxable.Sales Ledger of 18% GST in Tally
    • Press Enter and save all the details.
  • Similarly, create a Sales Ledger for SD Card but this time the rate will be 10% and the name will be Sales-10%.
  • 80% of the sales bill has been done. We now just have to take care of applying the taxation rates for both the items.
  • For that, we have to create a ledger for each of the GST types. So, for CGST and SGST, we have to create two different ledgers. Don’t worry it is simple and almost the same as we created a ledger for Rohit.
  • When you will enter both the Pen-drive and SD card and press Enter, you will have to enter the GST ledgers so that the tax is calculated accordingly.Entering GST ledgers in Tally
  • Let me show how you can do it in one single minute.
  • In the picture above, you can see the Input CGST and Input SGST in the list.
  • I’ve created them but I will show you how you can create them right now.
  • Press ALT+C and you will see a ledger creation screen. Enter the name Input CGST and select Duties & Taxes from the list in the Under option.
  • Select Central Tax in the option Type of Duty/tax as it is CGST. For SGST, you will have to select State Tax.
  • Set 0% in Percentage of calculation since we have already set the percentages while creating Stock Items Pen-drive and SD Card.
  • Select the Rounding method to Normal Rounding and Rounding Limit to 0.
  • Press CTRL+A and save the details.
  • Similarly create the ledger for Input SGST in exactly the same way and you are done.
  • When you will select the InputCGST and press Enter, you will automatically see the amount GST calculated according to the percentages we set while creating the Stock Items.
  • Similarly, when you will select Input SGST, the amount of SGST will be automatically calculated.
  • The sales bill is completed. Now you have to just press ALT+A to save the bill and that’s it. You have successfully created a GST Sales bill in Tally.
  • You can also press ALT+A to see the tax breakup. Here is what it looks like.Tax Analysis of GST in Tally GST Tax return filing online GST Returns
  •  You can clearly see the different breakups of CGST as well as SGST for both rates according to the product that has been calculated by Tally automatically.

GST Returns in Tally

Now you must be thinking, what about the GST returns that I was talking about in the beginning of this post and that is what the whole post is about.

Well, they are also automatically prepared in Tally. You do not have to do anything to prepare returns, except creating the sales bill in perfect way as I have shown you.

Let me show you where you can access the GST returns in Tally.

  • From Gateway of Tally, go to Display.
  • From the Display Menu, select Statutory Reports.
  • Select GST.
  • Select GSTR-1

As soon as you select GSTR-1, you will see the whole return in front of you already prepared. You can check the return and edit the details if something is wrong.

You can also export the file of the return in the Excel Format by pressing CTRL+E from the GSTR-1 report.

As soon as you press CTRL+E, it will ask for exporting options. Look at the location of the computer at which your file will be located. Then just press Enter and when you are asked to Accept, press Enter once again and you are done.

You have successfully exported the Excel file which you can upload to the Offline Utilitytool of GST and file eventually file the GSTR-1.

Similarly, you can also prepare GSTR-2. The only difference will be that instead of Sales, you need to enter the Purchases and instead of Sundry Debtors, you have to select Sundry Creditors while creating a ledger for the person from whom you are purchasing.

GSTR-3B can also be easily exported in the similar way and for that, you do not need to do anything as it is automatically prepared from the information of GSTR-1 and GSTR-2.


Actually, in Tally, you do not need to create a GST return. It is automatically created if you create the sales and purchase bills correctly in a proper way.

The best thing is you can start entering Purchase and Sales bills in Tally while your are in your shop, since the interface is similar to creating a sales bill and anyone can do it once you know how to do it.

There is a very low learning curve. It doesn’t feel that you are creating a GST return, but just feels that you are creating a sales bill. It feels easy and simple.

This is a Guest post by Rishit Shah of .

About the Author

In his own words….

Rishit Shah Founder Author TallySchool

I am Rishit Shah, a CA Final student and a big FAN of Tally. I explain Tally in a simple and easy way on

I am running TallySchool from the past three years and helped thousands of people to learn Tally in a simple manner.

TallySchool has also been featured on Tally Solutions (the company behind Tally), TaxGuru, CAClubIndia and Chartered Club to name a few.

If you have any kind of difficulty or suggestions, please comment below and I will be happy to help you out.

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Kindly note that is not associated with & Tally Solutions. This is a guest post and NOT a sponsored one. We have not received any monetary benefit for publishing this article. The content of this post is intended for general information / educational purposes only.

(Post published on : 05-September-2017)

  • Ramakrishna says:

    HI Risit Shah

    Dis Is Ramakrishna

    Can we Have u Contact no

  • surender kumar chhoda says:

    Res sir
    As I am an insurance adviser in LIC OF INDIA..I DO THIS JOB AS PART TIME..

    • Dev says:

      Mr. “chhoda”,

      This is not right place to ask such question , you may google it

      Dev Babu

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