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How to how to Reverse the Service Amount and Tax in Tally.ERP 9 ?


Is it possible to record the cancellation of purchase of services. If Yes how to reverse the service amount and tax in Tally.ERP 9?


In case of Cancellation of transaction (s), the service amount and service tax accounted needs to be reversed. In Tally.ERP 9, such reversal of services with service tax is possible only when the cancellation of transaction is made before the payment/ receipt of payment towards the service purchased or sold.

In Tally.ERP 9, reversal of services and tax are accounted using Debit /Credit Note.

Example: ABC Company cancelled the Advertising Services purchased on 12-4-2010 for Rs. 1,65,450 (inclusive of tax) as Sumukh Agency failed to provide the services as per the terms & conditions

Step 1: Record a Purchase Voucher (to account purchase of service)

First record a Purchase Voucher to account the purchase of services

Reverse the Service Amount and Tax in Tally.ERP 9

Step 2: Record a Debit Note (to reverse the service amount with Tax)

Set Up:

In F11: Features (Accounting Features)

  • Set Use Debit/Credit Notes to Yes

  • Set Use Invoice Mode for Debit Notes to Yes

In Debit Note voucher

  • In Party A/c Name field select Sumukh Agency
  • Under Particulars select Service Purchase Ledger and press enter to view Service Tax Details screen
  • In Service Tax Details screen, select Agst Ref in Type of Ref field and in Name field select Purc/1-1 from the Pending Tax Bills to reverse the service amount & tax.
Reverse the Service Amount and Tax in Tally.ERP 9
on seelction of Bill, Type of Service, Category, Amount (Incl. of Tax) and Service Amount with Tax bifurcation will be defaulted automatically.
Reverse the Service Amount and Tax in Tally.ERP 9
  • Under Particulars select Service Tax ledger to account the tax amount
  • In Bill-wise Details screen, select Agst Ref as Type of Ref and in Name field select the bill dated 11-4-2010 to reverse the bill outstandings.

The completed Debit Note is displayed as shown

Reverse the Service Amount and Tax in Tally.ERP 9
  • Press Enter to Save.

After reversal check the Input Credit Sumamry (for UnRealised Bills), the details of service amount will not be dispalyed. Press Alt + F1 to view the the report in detailed mode

Input Credit Summary : Reverse the Service Amount and Tax in Tally.ERP 9
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