Freight Charges in Tally Prime for GST Sales & Purchases

Struggling to figure out how to record additional charges like freight, packing, handling, and insurance in your GST sales and purchase transactions using Tally Prime? Don’t worry! We’re here to guide you step-by-step to ensure your accounting is accurate and GST-compliant.

Why Accounting for Additional Charges is Important in GST

In the world of accounting, extra charges like freight, packing, and insurance need to be correctly recorded as they affect your taxable value. Properly managing these entries is critical for GST returns and maintaining error-free books in Tally Prime.

Common Additional Charges You Might Encounter:

• Freight Charges: The cost of transporting goods.
• Packing Charges: Expenses for packing products securely.
• Handling Charges: Fees for loading and unloading items.
• Insurance: The cost of insuring goods during transit.

Let’s dive into how to handle these charges for both sales and purchase transactions.

Step-by-Step Guide to Record Additional Charges in Tally Prime

A. Recording Additional Charges in GST Sales Transactions

1. Create Ledgers for Each Additional Charge
   • Path: Gateway of Tally > Accounts Info > Ledgers > Create.
   • Example:
     • Freight Charges (Sales): Categorize under “Indirect Income” and specify GST details.
     • Packing Charges (Sales): Similar configuration under “Indirect Income.”
2. Create a Sales Invoice in Tally Prime
   • Navigate to: Gateway of Tally > Accounting Vouchers > F8: Sales.
   • Input customer information and list items being sold.
   • Add any extra charges (freight, packing, etc.) as separate entries.
   • Make sure GST is calculated on the total value (goods + charges).
   • Double-check and save the invoice.

Example for Clarity:

• Item Sold: Computer Accessories ₹50,000
• Freight Charges: ₹2,000
• Total Before GST: ₹52,000
• GST @ 18% on ₹52,000 = ₹9,360
• Final Invoice Amount: ₹61,360

Tip: Remember, GST should always be applied to the total taxable amount, including all additional charges.

B. Recording Additional Charges in GST Purchase Transactions

1. Set Up Ledgers for Purchase Charges
   • Go to: Gateway of Tally > Accounts Info > Ledgers > Create.
   • Create ledgers for costs like “Freight Charges (Purchase)” under “Indirect Expenses” and link GST as needed.
2. Create a Purchase Invoice in Tally Prime
   • Go to: Gateway of Tally > Accounting Vouchers > F9: Purchase.
   • Enter supplier details and list items purchased.
   • Include charges like freight, ensuring they are linked correctly to “Indirect Expenses” or “Direct Expenses.”
   • Calculate and apply GST on the combined taxable value.
   • Review and save your invoice.

Example for Easy Understanding:

• Item Purchased: Office Supplies ₹30,000
• Packing Charges: ₹500
• Freight Charges: ₹1,000
• Total Before GST: ₹31,500
• GST @ 12% on ₹31,500 = ₹3,780
• Total Invoice Amount: ₹35,280

Key Tips for Smooth GST Accounting in Tally Prime

• Consistent Ledger Setup: Always maintain dedicated ledgers for each type of additional charge.
• Apply GST Accurately: Calculate GST on the entire amount, including all additional costs.
• Review Chart of Accounts: Regularly check your ledger settings to ensure everything is correctly categorized.

Final Thoughts

Recording additional charges like freight, packing, handling, and insurance in Tally Prime may seem challenging at first, but with these steps, you can keep your accounts organized and GST-compliant. This not only simplifies your GST filing process but also keeps your financial records accurate.

Have more questions or tips to share? Drop your comments below and check out our other resources for mastering Tally Prime!