Rate Difference in VAT

Sometimes it might happen that subsequent to a sale or purchase, the rate per unit of item is revised. In this case, rate difference allowed on purchase or sales are also entered through Debit Note and Credit Note, thus, reducing the purchase and sales value, respectively.

Debit note to supplier

For example your supplier reduces price due to competition and allowed a rate reduction of Rs. 100/each on 5 units of a good supplied to you and issued a credit note for Rs. 520(Rs.100 x 5 + 4% of Rs. 500). Then you pass an entry in Debit note by selecting the name of items and entering the rate difference (Rs.500 in this case) in the amount column and after entering item details, in the next row, press enter and select Input VAT @ 4%.

In the same way you can pass entry in Credit note in case you

VAT in Purchase Return and Sales Return(Debit Note/Credit Note

For passing Purchase return in Tally, Debit note is used and for Sales return, credit note is used. Rate difference allowed by vendor is entered in debit note and when granted to buyer is entered in credit note. Net sales or purchases are taken into consideration for VAT computation.

Sales Return
For example Mr. Rajiv Ghosh returned two monitors worth Rs. 10000/- due to some defects on which VAT @ 4% is charged. Therefore the total value comes to Rs 10400/-( Rs. 10000 + 4% of Rs. 10000)
In this case, select sales @ 4% ledger in the Sales Ledger field in the credit note voucher type. In the item field, give details of item returned worth Rs. 10000. After the items enter, press enter to move the additional aentry area, where you have to select Output VAT@4%, Press Ctrl + A to save the entry.

Purchase Return
For example some goods are returned to supplier due to defects, that are subject to 4% VAT.
In this case, at Debit note field , at purchase ledger field, select Purchase 4% ledger and at item field, enter the details of items, which is to be returned. In the next row press enter to move to the additional accounting entries where you have to select Input VAT @4% from the list of ledger to automatically compute the amount of VAT. Then Press Ctrl + A to save entry.