Local Purchase of Services in TallyPrime: 5 Easy Steps + Example

Purchasing services from a local supplier means both you and the service provider are located in the same state.

In this case, CGST and SGST are applicable.

TallyPrime allows you to easily record such transactions and ensures that your GST reports are accurate.

Let’s break down how to record a local purchase of services step by step in simple language.

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1. What is a Local Service Purchase in TallyPrime?

A local purchase of services happens when:

• Your business and the service provider are in the same state
• You receive services like legal fees, consultancy, rent, etc.
• GST is charged as CGST + SGST

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2. Example Scenario: Local Purchase of Services in TallyPrime

Let’s say:

• You pay ₹10,000 as consultancy fees to a local GST-registered consultant
• GST rate is 18% (9% CGST + 9% SGST)
• Total invoice value is ₹11,800

Now we’ll see how to record this in TallyPrime.

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3. Step-by-Step: Record Local Service Purchase in TallyPrime

Step 1: Enable GST

1. Press F11 > Statutory & Taxation
2. Set Enable Goods and Services Tax (GST) to Yes
3. Select the correct state
4. Enable Set/alter GST details to enter your GSTIN
5. Press Ctrl + A to save

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Step 2: Create the Service Ledger

1. Go to Gateway of Tally > Accounts Info > Ledgers > Create
2. Name: Consultancy Charges
3. Under: Indirect Expenses
4. Set Is GST applicable? → Yes
5. Set Type of supply → Services
6. Enter HSN/SAC Code if applicable
7. GST Rate: 18%
8. Save the ledger

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Step 3: Create the Tax Ledgers

If not already created:

• CGST Ledger
  • Under: Duties & Taxes
  • Type of Duty: GST
  • GST Type: Central Tax
  • Rate: 9%
• SGST Ledger
  • Under: Duties & Taxes
  • Type of Duty: GST
  • GST Type: State Tax
  • Rate: 9%

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Step 4: Create the Party Ledger

1. Go to Accounts Info > Ledgers > Create
2. Name: ABC Consultants
3. Under: Sundry Creditors
4. GST Registration Type: Regular
5. Enter supplier’s GSTIN
6. Make sure their state is same as your business

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Step 5: Record the Purchase Voucher

1. Go to Gateway of Tally > Vouchers > F9: Purchase
2. Select ABC Consultants as the supplier
3. Choose the Consultancy Charges ledger
4. Enter the amount: ₹10,000
5. Add CGST @ 9% and SGST @ 9%
6. Tally will calculate ₹900 for each tax
7. Total: ₹11,800
8. Save the voucher

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4. GST Return Effect: Local Purchase of Services in TallyPrime

• This entry appears in GSTR-2B for Input Tax Credit
• GSTR-3B will show this as Input services under B2B inward supplies
• ITC of ₹1,800 is available on this purchase

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5. Final Summary of Local Purchase of Services in TallyPrime

Particulars	Amount (₹)
Consultancy Fee	10,000
CGST @ 9%	900
SGST @ 9%	900
Total	11,800

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6. Conclusion

Recording a local purchase of services in TallyPrime is quick and straightforward.

By entering the correct GST rate and selecting the proper ledgers, you can ensure:

• Your GST returns are accurate
• You can claim full input credit
• Your books stay well-organized

TallyPrime takes care of the calculations and reporting, helping you stay GST-compliant with ease.