Hey everyone! If you have ever walked into a shop in Mumbai, bought a laptop, or even ordered food online, you have probably seen those three letters on your bill: GST.

For many students and small business owners, GST sounds like something very complicated. Honestly, it really isn’t. Once you understand the logic behind it, especially from purchase to sale, it becomes very practical and simple.

Today, let’s understand how Goods and Services Tax (GST) works in accounting and how businesses manage everything smoothly using Tally Prime with GST.

What is GST? Let’s Understand it Simply

Before jumping into accounting, we need to clear one basic question: what is GST?

GST (Goods and Services Tax) is a single indirect tax introduced in India in 2017. Before GST, businesses had to deal with multiple taxes like VAT, service tax, excise duty, etc. It was confusing and complicated.

Now, everything is simplified into one system.

GST in simple words:

• It is a tax on goods and services

  

• The end consumer pays for it
• Businesses collect and pass it to the government

So basically, businesses act like middlemen between customers and the government.

CGST, SGST and IGST Meaning (Very Important)

When you look at any GST bill, you will see three main components:

1. CGST and SGST (Intra-State Transactions)

If a transaction happens within the same state (for example, Mumbai to Pune), GST is split into:

• CGST (Central GST)
• SGST (State GST)

Both are shared between the central and state governments.

2. IGST (Inter-State Transactions)

If goods move from one state to another (Mumbai to Delhi), then:

• Only IGST (Integrated GST) is applied

This is collected by the central government and later distributed.

Understanding this is very important in TallyPrime with GST accounting.

GST in Accounting: Input Tax and Output Tax

Now, let’s come to the real accounting part.

GST in accounting is mainly based on two concepts:

1. Input Tax Credit (ITC)

When you purchase goods, you pay GST on them. This is called input tax.

Good news? You can claim it back later.

This is called Input Tax Credit (ITC).

2. Output Tax

When you sell goods, you collect GST from customers. This is called output tax.

But this money does NOT belong to you. You have to pass it to the government.

Final GST Calculation:

Output GST – Input GST = Final Tax Payable

Example:

• Output GST = ₹10,000
• Input GST = ₹7,000
• Final GST payable = ₹3,000

This is the basic GST accounting treatment used everywhere.

How GST Works in India (Practical View)

In real business life, GST works like a cycle:

1. You buy goods → pay GST
2. You sell goods → collect GST
3. You adjust both using ITC
4. You pay the remaining tax

This entire flow is what we manage in TallyPrime with GST.

GST Setup in TallyPrime (Step-by-Step)

Before entering transactions, GST must be enabled.

How to enable GST in TallyPrime:

1. Open a company in Tally Prime
2. Press F11 (Features)
3. Go to Taxation settings
4. Enable GST option
5. Enter GSTIN and state details
6. Save using Ctrl + A

This is the basic TallyPrime GST setup process.

Creating GST Ledgers in TallyPrime

To record entries, you need proper ledgers:

• Purchase Ledger
• Sales Ledger
• CGST Ledger
• SGST Ledger
• IGST Ledger

Without this, GST entries will not work properly in TallyPrime with GST.

GST Entry in Tally Prime (Purchase Example)

Let’s understand with a simple example.

You buy goods worth ₹20,000 with 18% GST.

Steps:

1. Go to F9 Purchase Voucher
2. Select supplier
3. Enter item details
4. Add CGST and SGST ledgers
5. Save voucher

Tally automatically calculates tax and updates the input GST.

This is a standard GST purchase entry in Tally Prime.

GST Sales Entry in TallyPrime (Output Tax Example)

Now, let’s say you sell goods worth ₹30,000 + GST.

Steps:

1. Press F8 Sales Voucher
2. Select customer
3. Enter item details
4. Apply CGST/SGST or IGST
5. Save voucher

Tally updates the output tax automatically.

This is a GST sales entry in Tally Prime.

GST Journal Entry in Accounting

Before software, GST was recorded manually using journal entries:

• Purchase: Input GST Dr. / Credit Supplier
• Sales: Customer Dr. / Output GST Credit

This is called gst journal entry in accounting.

Now TallyPrime with GST automates everything.

GST Invoice Format (Basic Idea)

A GST invoice usually includes:

• Seller details
• Buyer details
• GSTIN numbers
• Item description
• Tax breakup (CGST, SGST, IGST)
• Total amount

This helps in gst return filing basics later.

GST Return Filing Basics

Every business must file GST returns monthly or quarterly.

Main returns include:

• GSTR-1 (Sales data)
• GSTR-3B (Tax summary)

In Tally Prime with GST, these reports are generated automatically based on entries.

Why Tally Prime with GST is Important

In real business, manual calculation is not practical.

That’s why TallyPrime with GST is widely used.

It helps in:

• Automatic tax calculation
• Accurate ledger updates
• Easy return preparation
• Reducing human errors

Learning GST with Proper Training

If you are serious about accounting, just reading is not enough. You need practice.

Many students search for:

• TallyPrime GST Course
• GST accounting course near me
• TallyPrime course with GST
• TallyPrime classes in South Mumbai

In Mumbai, especially around Charni Road and Opera House, many learners join structured programs like TallyPrime with GST course in Charni Road to get hands-on training.

Institutes like CompCraft also provide practical exposure using real business examples.

Final Thoughts

GST is not difficult once you understand the flow.

It is simply:

• Collect tax on sales
• Pay tax on purchases
• Adjust difference

And with Tally Prime with GST, everything becomes systematic and automated.

If you practice regularly and understand the logic behind entries, accounting becomes much easier than it looks at first.