Interstate Purchase of Services in TallyPrime: 5 Steps + Example

If your business purchases services from a supplier located in another state, it is treated as an interstate purchase of services.

In such cases, IGST (Integrated GST) is applicable.

TallyPrime simplifies the process of recording these types of transactions with proper tax treatment.

Let’s understand how to record an interstate service purchase step by step in simple language.

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1. What is an Interstate Purchase of Services in TallyPrime?

An interstate purchase of services occurs when:

• Your business and the service provider are in different states
• The supplier charges IGST on the invoice
• Examples include: online marketing services, legal services, consultancy, etc.

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2. Example Scenario: Interstate Purchase of Services in TallyPrime

Let’s assume:

• Your business is in Karnataka
• You hire a digital marketing agency from Delhi
• Invoice amount for services is ₹50,000
• GST rate is 18% (IGST)
• IGST = ₹9,000
• Total invoice = ₹59,000

Now let’s record this in TallyPrime.

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

Step 1: Enable GST in TallyPrime

1. Press F11 (Features) > Statutory & Taxation
2. Enable GST (Goods and Services Tax): Yes
3. Enter your State and GSTIN
4. Save using Ctrl + A

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Step 2: Create the Party Ledger

1. Go to Gateway of Tally > Accounts Info > Ledgers > Create
2. Name: ABC Digital Marketing
3. Under: Sundry Creditors
4. Set GST Registration Type → Regular
5. State: Delhi (different from your business)
6. Enter their GSTIN
7. Save the ledger

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Step 3: Create the Service Ledger

1. Go to Accounts Info > Ledgers > Create
2. Name: Digital Marketing Services
3. Under: Indirect Expenses
4. Set GST Applicable: Yes
5. Type of Supply: Services
6. Enter SAC Code if known (e.g., 998365)
7. GST Rate: 18%
8. Save the ledger

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Step 4: Create the IGST Ledger (if not already created)

1. Go to Accounts Info > Ledgers > Create
2. Name: IGST
3. Under: Duties & Taxes
4. Type of Duty/Tax: GST
5. GST Type: Integrated Tax
6. Rate: 18%
7. Save the ledger

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Step 5: Record the Purchase Voucher

1. Go to Gateway of Tally > Vouchers > F9: Purchase
2. Select ABC Digital Marketing as the party
3. Enter invoice date and number
4. Select Digital Marketing Services ledger
5. Amount: ₹50,000
6. Apply IGST ledger → ₹9,000
7. Total = ₹59,000
8. Save the voucher

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4. Impact on GST Returns: Interstate Purchase of Services in TallyPrime

• IGST of ₹9,000 will appear in GSTR-3B under Input Services
• Appears in GSTR-2B for Input Tax Credit
• Helps in claiming full ITC on interstate service purchases

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5. Final Summary: Interstate Purchase of Services in TallyPrime

Particulars	Amount (₹)
Digital Marketing Services	50,000
IGST @ 18%	9,000
Total	59,000

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6. Conclusion

Recording interstate service purchases in TallyPrime is quick and easy.

Just make sure to:

• Set the correct party state and GSTIN
• Use a services ledger with IGST
• Record the tax properly

This ensures accurate GST returns and enables you to claim full input tax credit without any hassle.

TallyPrime takes care of the rest.