FAQ-4 ( VAT / CST ):

How to book transaction in Tally.ERP 9 for service tax with VAT, wherein Service Tax is to be calculated at 33% (67% is claimed as abatement). The remaining amount being, the total of assessable value and VAT as the calculation is inclusive of tax


Consider the scenario where Excel Company bills service charges to Disha Traders, for Rs. 1,00,000. Service Tax is charged on Rs.33,000 (after claiming abatement of Rs. 67,000 on Erection, commission and installation charges). The balance amount (assessable value + VAT) of Rs. 67,000 is inclusive of VAT.


Step 1: Creating Ledgers

Go to Gateway of Tally > Accounts Info.> Ledger > Create


Sales Ledger

Name: Works Contract @ 12.5%.

Under: Sales Accounts.

Is Service Tax Applicable: Yes.

Default Service Category: Erection Commissioning and Installation.

Used in VAT Returns: Yes with VAT/Tax class - Works Contract @ 12.5%.

Use for Assessable Value Calculation: No.


Output VAT Ledger

Name: Output VAT WC @ 12.5%.

Under: Duties & Taxes.

Type of Duty/Tax: VAT.

VAT Sub Type: Output VAT.

VAT/Tax Class: Output VAT @ 12.5% on Works Contract


Service Tax Ledger

Name: Service Tax.

Under: Duties & Taxes.

Type of Duty/Tax: Service Tax.

Tax Head: Any.

Use for Assessable Value Calculation: No.


Step 2: Creating Voucher Class

Go to Gateway of Tally > Accounts Info. > Voucher Types > Alter > Select Sales

Name of Class: Service Tax + VAT


payroll in tally erp 9


In the Voucher Type Class screen go to the section - Default Accounting Allocations for each Item in Invoice.

Select Works Contract @ 12.5% ledger and enter the percentage as 56.50.

Select Output VAT WC @ 12.5% ledger and enter the percentage as 10.50.

Select Service Tax ledger and enter the percentage as 33.

NOTE: The percentage given under respective ledgers are to be entered only here for auto calculation of tax amount in the invoice.

Service Tax duty ledger has been defined as 33% as service Tax is applicable on 33% and balance is claimed as abatement.

The balance of 67% is considered as 100%. Hence Assessable value + VAT is 67% + 12.5% = 79.50%

Sale or Assessable value is 67/79.50*67 = 56.4649 rounded off to 56.50%

Output VAT is 12.5/79.50*67 = 10.50%

In Additional Accounting Entries, select Service Tax ledger to display the same separately in invoice.


tally erp 9 software download


Accept the voucher type class screen.


Accept the voucher type alteration screen.


Step 3:


Recording Sales Invoice using Voucher Class


Go to Gateway of Tally > Accounting Vouchers > F8: Sales > Select the Voucher Class  Service Tax + VAT



tally 9 erp free download


In the sales invoice select the party ledger enabled for service tax.

Select the stock item, enter the quantity and rate for the amount to get displayed. In Service Tax Details screen, enter or accept the service amount. All the values will get auto-calculated and displayed. Based on this calculation the Service tax amount appears in invoice.

tally erp 9 shortcut keys


The sales invoice appears as shown:



Accept the sales invoice, press page up key and click P: Print button (Alt+P) to print the invoice. Press F12: Configure and set Print VAT/CST Analysis of Items to Yes in Invoice Print Configuration.

tally 9 tutorial free download


Generate the print preview of sales invoice. The print-preview appears with complete breakup of VAT and service Tax as shown:



tally erp 9 book free download    [12-29]


Step 4: Generating Reports

VAT Computation

Go to Gateway of Tally > Display > Statutory Reports > VAT > VAT Computation

The tax amount appears as per the calculation defined in voucher class of sales voucher type.


service tax in tally erp 9


Service Tax Payable Report

Go to Gateway of Tally > Display > Statutory Reports > Service Tax Reports > Service Tax Payables > Bill Date wise

Press F12: Configure and set the following options to Yes:

  • Show Tax Break-up
  • Show Tax Break-up for Bill Amount
  • Show Tax Break-up for Realised Amount

The Service Tax Payable (Bill Date-wise) report appears as shown:


pirated tally erp 9


Company Information @ Tally.ERP9
Group & Ledger
Advanced Inventory / Stock
Order Processing
Re-Order Levels
Tracking Numbers
Batch-wise Details
Additional Cost Details
Bill of Materials (BOM)
Price Lists and Price Levels
Stock Valuation
Zero Valued Entries
Inventory Ageing Report
Actual and Billed Quantities
Advanced Usage of Vouchers
Maintain Bill-wise Details
Cost Center and Cost Category
Interest Calculation
Reversing Journals
Post-Dated Voucher
Memo (Memorandum) Voucher
Optional Voucher
Using Tracking Number
Knowledge Base @ Tally.ERP9
Stock Items
Stock Groups
Inventory Masters
Inventory Vouchers
Inventory Report Statements
Balance Sheet
Accounting Reports
Accounting Vouchers
Interest Calculation
VAT-Value Added Tax
Service Tax
TDS (Tax Deducted at Source)
Disclaimer :

The names of Companies and persons used in this Website have been used for illustrative purposes only.
The visitors may visit www.tallysolutions.com , the web site of Tally Solutions Pvt. Ltd. for resolving their doubts or for clarifications

Trademark :

Tally,Tally GST,TallyERP9 GST, Tally9, Tally.ERP, Tally.ERP –9, Tally.Server 9, Tally.NET & Power of Simplicity are either registered trademarks or trademarks of Tally Solutions Pvt. Ltd. in India and/or other countries. All other trademarks are properties of their respective owners. This Website is not associated with any product or vendor mentioned in this Website.

Mandal Bagicha, Hemkapada,
Sunhat, Balasore-756002 ( Odisha )-India
eMail ID : tallyerp9bookorder@gmail.com
Web : www.tallyerp9book.com
Mob : 09437264738
Get Updated ...