Accounting Software

Company GST Rate set up in Tally Prime 7

Posted by Asok K Nadhani on

Last Updated on: 6th August 2026, 02:30 pm

Company GST Rate set up in Tally Prime 7

Company GST Set Up – GST Rate and Other Details

After essential Company GST set up as explained, for GST details (Tax rates and other details applicable for all products of the Company), may be set up, where applicable.

Click F11:feaures, set Yes at Enable Goods and Services Tax (GST), as explained in earlier chapter.

Next, at F11:Features screen, set Yes at ‘Set Alter Company GST rates an other details’ to get GST Rate & Other details screen.

Company GST Rates & Other details set up

Company GST Rates & Other details set up

Now set up the options under the following sections

1. HSN/SAC Related Details

  • Source of Details: Select the correct option.  Select ‘Specify Details’ to enter code manually or Use GST Classification (if already created).
  • HSN/SAC: Next enter the 4, 6, or 8-digit code assigned to primary product or service. Enter A brief text description of the goods or services, to provide a default classification to generate the HSN/SAC Summary in GSTR-1, and for e-invoicing validation.
  • If is defined an HSN here, this will be applied to every sales and purchase transaction for the company.

2. GST Rate and Related Details

This section establishes the default taxability and tax percentages for all products of the company.

  • Taxability: Select Taxable (if all goods / services are Taxable), Exempt (if all goods / services are Tax exempt), Nil Rated (all goods / services are 0% Tax), or Non-GST (all goods / services are Non -GST.
  • GST Rate (Integrated Tax): Enter the total single IGST rate(applicable for all products / services).  The Total Tax rate is auto spilt to Central Tax (CGST) and State Tax (SGST /UTGST), at Invoice computation stage, depending on the State of Delivery (Seller) and States of destination of Goods / Services (Buyer).

It is recommended to enter HSN/SAC Details at the company level, only where the business deals in one single category (HSN/SAC) goods or services. (rare case, not recommended). If the organisation deals in multiple categories (HSN/SAC), don’t choose the option ‘Specify Details Here’, or don’t specify anything here. It is highly recommended

HSN/SAC Related Details – Explanation

Select the correct option as explained :

1. Specify Details Here : This option is to set manual entry method, to type the HSN/SAC code, description, and tax rates directly into the configuration screen, to set Company wide fixed rate and classification for the entire company. These details act as primary default, applicable to all Stock Items, unless over ridden at specific Stok Item level. Use this if the organisation deals in ONLY ONE category of goods or services with SAME HSN/ SAC Code and SAME  GST rate

2. Specify Slab-Based Rates : This option allows to define price sensitive alternate tax rates based on the unit price of the goods, where rates depend on Sales Price (and not sale amount). Setting this, Tax would be calculated at a rate based on the Item price (Like Apparels, Footwear etc).

3. Use GST Classification : To set Tax details as per pre defined GST Classification Master. In Company level set up, the implication is same as Specify details here, but in lower level set up (like Item Level), this is useful feature, as the rates are to be specified in Classification master, and would be carried to all the Items belonging to the classification.

4. Specify in Voucher : Skips the HSN and Tax Rate blank during Compnay GST set setup, to enter the details at the time of recording a transaction.

  • It provides maximum flexibility for businesses that deal in varieties of goods/ services, or a few special ones
  • However, this needs more data entry effort to enter GST details for each Item in each transaction, and is prone to human error, as correct details must be corrcetly input for all Items in each transaction.
  • This option is used for specialized service providers or businesses with unique transactions where a standard rate cannot be pre-defined for Stock tems.

Summary of Usage

Where an organisation delas with multiple products, select the first option as Not Defined. Instead, use Specify Details Here (for special few Items) or Use GST Classification directly within the Stock Item or Stock Group masters for correct computation as per tax hierarchy and generates accurate HSN/SAC wise reports.

This is further explained at Stock Item/ Stock Group and Ledger Accounts GST set up in next chapters.

Company GST Set Up advanced configuration options

At ‘GST Rate and other details screen’, click F12: Configure to set up other numerous options to control various options and set advanced options.

Company GST Set Up advanced configuration options

Company GST Set Up advanced configuration options

To see all these options, set Yes at ‘Show more configurations’ at the top.

1. HSN/SAC & GST Rate Details : These settings define tax classification and calculation of transactions.

  • Provide HSN/SAC details & Provide HSN/SAC description: To enable fields for entering the HSN (Goods) or SAC (Services) codes and their text descriptions, to set primary classification of product/service for statutory reporting and printing on invoices.
  • Provide breakup of Tax Rate: To display individual fields for Central Tax, State Tax, and Integrated Tax rather than a single combined rate.Allows for precise manual entry or verification of tax split during master creation.
  • Provide Cess Rate details: To activate Cess field to enter Cess percentages or value-based Cess. Mandatory for businesses dealing with Goods / Services attracting Additional Cess
  • Enable Reverse Charge calculation:  To set Reverse Charge (RCM), as applicable (purchases where the recipient, rather than the supplier, is liable to pay tax to the government).
  • Enable GST calculation on MRP (Incl. Tax): To back-calculate the taxable value from a Maximum Retail Price(MRP) including GST (helpful for retail sectors where goods are invoiced at tax-inclusive price.
  • Eligible for Input Tax Credit: To set tax paid on purchases (ITC) is claimable as credit.

2. e-Way Bill / E-Invoice Details : To configure options relating for e-Way Bill / E-Invoice requirements.

  • Provide e-Way Bill Threshold Limit for interstate & intrastate: To set the threshold limits for Inter State and Intra State movement of goods, for compliance with state-specific and national rules;
  • Print e-Way Bill with Invoice: To automatically append the generated e-Way Bill to the invoice printout,  to saves time in one consolidated print job.
  • Send e-Way Bill details with e-Invoice in sales transactions: To integrates the request for an e-Invoice (IRN) and an e-Way Bill into a single step, to streamline operations where both eway bill and e-invoice are applicable.

3. Additional Configuration : To activate advanced settings.

  • Set source of GST Rate / HSN/SAC details in transactions: Set to Yes, to display where the tax rate or HSN code is being pulled from (e.g., Company, Stock Group, or Stock Item) during the transaction.
  • Select method of GST calculation in transactions:  To set how tax should be calculated (on item rate or total amount), to align with different rounding methods.
  • Ignore difference in tax values: Tolerance setting to overlook minor discrepancies (often caused by rounding) between calculated tax and entered tax, to prevent transactions from being flagged as “Incomplete/Mismatched” due to small difference.
  • Reset status of manually reconciled transactions: To clear the “Reconciled” flag from manually matched transactions, to enable correction if manual reconciliation was performed in error.
  • Provide Threshold Limit for B2CL Invoices: Enables a field to set the value (typically ₹2.5 Lakhs) for B2C large interstate sales to unregistered persons are correctly categorized in GSTR-1.

Taxability Type – Explanation

The option of Taxability Type is further explained here for proper understanding. In Tally, you must select Taxability type in Stock Item or Ledger master.

1. Taxable Goods : goods that attract specific GST rate as set by Government (e.g Cement, a taxable attracting a specific GST rate. A regular GST dealer (Seller) can charge GST in Tax Invoice. The registered Purchaser may claim Input Tax Credit (ITC) on purchases of taxable goods.

2. Exempt Goods : Goods that are specifically exempted (like certain essential commodities) from tax under the GST Act. The tax rate for these goods is effectively nil. So, no GST is charged on Sale of such goods. While no tax is collected on sales, businesses generally cannot claim ITC on the inputs used to supply exempt goods. These Items are separately shown in GST Reports as Exempted Goods

3. Nil Rated Goods : These are goods that attract a 0% (NIL) GST rate. Like exempted goods, the tax amount calculated is zero. While both Exempt and Nil Rated result in zero tax, they are classified differently in statutory returns like GSTR-1 and GSTR-3B. These Items are separately shown in GST Reports as NIL related Goods

4. Non-GST Goods : Goods that do not fall under the purview of the GST law (like petroleum products or alcohol for human consumption) and are outside scope of  GST net. No GST is applicable on transactions of such goods.  These items are excluded from GST calculations, but take part in General Accounting. Though these are beyond the scope of GST, these are disclosed separately in Non GST section for information, and make the report comprehensive to show the entire picture.

Applicability of GST Rates Hierarchy

Ideally, GST rates should be specified at Item level or at HSN/ SAC level only. Tally does not provide HSN/ SAC master. So, it should be set at Item Master only.

Tally allows to specify tax details like tax rates and details at various levels, like : At the top,

 at company level, set at Company GST Set Up, which, by default, becomes applicable for all the products, unless superseded at lower level like Accounts Ledger, Stock Group & Stock item. The objective is to reduce Tax details entry at all Stock Items.

However, don’t be falsely lured by entering Tax details at any higher level, than Stock Item Itself. Tally provides easy Tax Entry in a compact for, for multiple Stock Items at a time (explained later).

GST Details entry at higher level- Probable Risks

It is rare to find applicability of same HSN / SAC Code, Tax Type and Tax Rates to ALL ITEMS dealt  by the organisation. In curse of time, more items may come up with different Tax Rate / Tax Type/ HSN/SAC. In such case, unless the rates are carefully entered first at Item Level correctly, WITHOUT MISS, the Company level rate will be internally caried behind the scene, (resulting in Invoicing and all data going wrong). So consciously be careful, when setting Tax Details at Company level.

At next level, Tax details may be set up at Stock Group level. Stock Group level is multi level hierarchal organisation of Stok Item, with different  purpose depending upon organisation own view, customs, purpose. Stock groups may be reorganised any time, for convenience. Stock group is not related to GST classification. Tax Rates set at Stock Group, would silently become applicable to all products under the Stock Group, down the level, unless superseded at Stock Item Level.

At another level, Tax rates may be set at Accounts ledger (like Sales, Purchase, Customer Supplier). These are not related to Tax Rates. This would necessitate creation of multiple ledger accounts for each Tax Type. Further,  at Voucher entry, Tax type should be correctly and cautiously selected, additional burden without any apparent benefit. The Invoice entry becomes more complicated,

So, consider entry of Tax Details only at Stock Item level (explained later).