GST 2.0: Claim ITC on Old Stock in Tally Prime – Practical Guide
With the rollout of GST 2.0 (effective from 22 September 2025), the Indian taxation system has witnessed several important changes, especially in how Input Tax Credit (ITC) is claimed and reconciled. One of the most critical areas that businesses must understand is how to claim ITC on old stock purchased before GST 2.0 but sold or used after its implementation.
In this article, we’ll break down how to claim ITC on old stock in Tally Prime, explain the eligibility criteria, and demonstrate it with step-by-step examples and practical case studies.
What Has Changed Under GST 2.0?
The GST 2.0 update simplifies return filing and introduces automated invoice matching through the new GSTR 1A, 2A, and 3B synchronization system.
One major focus of GST 2.0 is on accurate ITC reconciliation — ensuring that businesses only claim ITC for purchases that appear in the supplier’s GSTR-1 and are reflected in the buyer’s GSTR-2B.
For old stock (purchased before 22 September 2025), businesses can still claim ITC if the goods are sold or consumed after GST 2.0 and proper purchase documentation exists.
Eligibility to Claim ITC on Old Stock
You can claim ITC on old stock if:
The goods were purchased from a registered supplier under GST.
The purchase invoices are available and correctly reflect GST details.
The supplier has filed GSTR-1 for that period, and the invoice appears in your GSTR-2B.
The stock is still available in your inventory or has been used for taxable supplies after 22 September 2025.
Step-by-Step Process to Claim ITC on Old Stock in Tally Prime
Follow these simple steps in Tally Prime Release 5.0 or later:
Step 1: Enable GST in Tally Prime
Go to Gateway of Tally → F11 → Statutory Features
Enable Goods and Services Tax (GST): Yes
Set/Alter GST details → Enter your GSTIN, State, and applicable tax rates
Step 2: Create or Update Stock Items
Go to Inventory Info → Stock Items → Alter/Create
Set the GST Rate (as per latest GST 2.0 updates)
Example: If an item’s rate changed from 28% to 18%, update it accordingly.Save the stock item details.
Step 3: Record Purchase Entry (Old Stock)
Go to Accounting Vouchers → F9: Purchase
Select Supplier Ledger and Purchase Ledger (GST applicable)
Enter stock item details with quantity, rate, and old invoice date
In the Tax Analysis section, verify CGST/SGST or IGST amounts
(Tip: Use Narration – “Old stock purchase before GST 2.0, ITC to be claimed post-update.”)
Step 4: Claim ITC Through Journal Adjustment
Go to Accounting Vouchers → F7: Journal
Create an entry to transfer ITC from the Purchase Ledger to the Input Tax Credit Ledger
Example:
| Particulars | Dr (₹) | Cr (₹) |
|---|---|---|
| Input CGST A/c | 9,000 | |
| Input SGST A/c | 9,000 | |
| Purchase A/c | 18,000 |
This ensures your ITC gets adjusted correctly in GSTR 3B under Input Tax Credit.
Case Study 1: Rate Change from 28% to 18%
Scenario:
ABC Traders purchased electronic goods worth ₹1,00,000 (28% GST) before GST 2.0. After 22 September 2025, the rate is reduced to 18%.
Steps in Tally Prime:
Update the stock item GST rate to 18%
Create a journal entry to claim ITC @28% (as per the purchase invoice)
On sales, Tally auto-applies the new 18% rate.
Effect:
The buyer claims full ₹28,000 ITC based on old stock purchase while charging 18% on sale — no ITC loss since both entries are legally valid under transitional rules.
Case Study 2: Exempted Item Under GST 2.0
Scenario:
XYZ Booksellers had a stock of educational books (5% GST earlier) that became exempt under GST 2.0.
Steps in Tally Prime:
Update stock item GST rate to “Exempt”
ITC already claimed earlier must be reversed through a journal entry
Example Entry:
| Particulars | Dr (₹) | Cr (₹) |
|---|---|---|
| Output CGST Reversal A/c | 2,500 | |
| Output SGST Reversal A/c | 2,500 | |
| Input CGST A/c | 2,500 | |
| Input SGST A/c | 2,500 |
Effect:
ITC reversal ensures compliance with GST 2.0’s updated exemption rules.
Reporting in GSTR 3B and GSTR 2B
After recording all adjustments, go to Display → Statutory Reports → GST → GSTR 3B
Check ITC figures under Eligible ITC → Inputs
Ensure the same invoices reflect in GSTR 2B for reconciliation
(Tally Prime’s auto-matching feature now highlights mismatched or missing invoices.)
Best Practices for Smooth ITC Transition
- Maintain a reconciliation report for old vs new stock
- Ensure invoice-level matching between GSTR-2B and Tally
- Record all ITC reversals and adjustments on the same date as transition
- Keep a backup of old data before updating to GST 2.0
Conclusion
The GST 2.0 update brings clarity and automation, but a proper understanding of transitional ITC rules is vital for compliance. By following the above step-by-step guide in Tally Prime, businesses can accurately claim or reverse ITC on old stock without any penalty or mismatch.
Whether it’s a rate change or exemption update, Tally Prime’s latest version ensures you stay 100% GST-compliant under the new regime.
Suggested Readings-
Tally Prime Course
GST Composition Scheme Accounting
