Record Works Contract Purchases in TallyPrime: 7 Easy Steps

Feb 3, 2024

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by

Rishit Shah

in GST in Tally, Intermediate

Here’s a detailed guide on recording works contract purchases in TallyPrime:

Table of Contents

1. Choose the Transaction Type:

Identify the nature of the work contract:
- Purchase – Works Contract: Use this option for works contracts within your state (intra-state).
- Interstate Purchase – Works Contract: Choose this option for works contracts across states (inter-state).

2. Create Purchase Voucher:

Go to Gateway of Tally > Accounting Vouchers.
Select F9: Purchase for intra-state or F10: Other Vouchers > Interstate Purchase – Works Contract for inter-state contracts.

3. Enter Basic Information:

Provide the Date, Supplier Invoice No., and select the Party A/c Name (supplier’s ledger).

4. Set Taxability:

Press F12: Configure.
In the Additional Information window, access Set/Alter Tax Details.
Choose Purchase – Works Contract or Interstate Purchase – Works Contract as the Nature of Transaction.

5. Add Purchase Details:

Select the appropriate Purchase Ledger under Particulars.
Enter the Amount of the contract (excluding tax).
If applicable, break down the amount into specific categories like material, labor, etc.

6. Specify GST Details:

1. Intra-state Purchases:

Select the applicable CGST and SGST/UTGST rates.
TallyPrime will automatically calculate the tax amounts.

2. Inter-state Purchases:

Select the IGST rate.
Enter the IGST amount manually based on the purchase value and rate.

7. Finalize the Voucher:

Select the Payment Ledger if you’ve made a payment.
For credit purchases, choose the relevant Outstanding Liability Ledger.
Press Enter to save the voucher.

Additional Notes while Recording Works Contract Purchases in TallyPrime:

Ensure the chosen purchase ledger has the Nature of Transaction set correctly in its master configuration.
Verify that the applicable tax rates are set in TallyPrime’s statutory details.
Maintain proper documentation for works contracts, including invoices, agreements, and supporting bills.
Consult a qualified accountant for specific guidance on recording works contracts based on your business nature and applicable regulations.

Remember, it’s crucial to identify the correct transaction type (intra-state or inter-state) and choose the appropriate tax rates for accurate recording and compliance.