How do you account for GST Expense invoices for construction business of residential units

Hey Rakesh! Here's how you can account for GST expense invoices in Tally Prime 3.0 for a construction business dealing with residential units, especially focusing on maintaining the 80% purchases from GST-registered persons rule:

Accounting GST Expense Invoices in Tally Prime (Construction Business):

1. Create Ledgers for Purchases and GST:

• Purchase Ledger: Create separate purchase ledger(s) under Purchases Account for materials/services (e.g., Cement, Steel, Contractor Charges).

• GST Ledgers: Create Input CGST, Input SGST, and Input IGST ledgers under Duties & Taxes.

2. Entering Purchase Invoices with GST:

• While entering the purchase invoice, select the supplier ledger (must be GST registered).

• Enter Purchase Ledger for the materials or services.

• Enter GST rates applicable in the GST details screen (CGST, SGST, or IGST depending on transaction).

• Tally will automatically calculate GST amounts and post them to the respective GST ledgers.

3. Maintain 80% Purchase from Registered Persons:

• Make sure that at least 80% of your total purchases (value-wise) are from GST-registered suppliers.

• Track purchases from registered and unregistered suppliers separately.

• In Tally, you can generate purchase reports filtered by supplier GST status or ledger groups.

4. Recording GST Expense for Construction Services (if any):

• If you are availing services (like contract labor), ensure GST invoices with proper GSTIN of suppliers.

• Enter those invoices similarly with GST details.

5. GST Input Credit Accounting:

• Input GST paid on purchases can be claimed as ITC (subject to conditions).

• In Tally, the GST Input ledgers will help you track ITC eligible amounts.

6. Compliance:

• Use Tally’s GST return module to generate GSTR-2B, GSTR-3B, and annual returns.

• Ensure your purchase register reflects correct GST details for claiming ITC.

Practical Tips:

• Use "GST Purchase Register" reports in Tally to monitor purchase composition.

• Reconcile your purchase invoices with supplier GST returns to ensure correctness.

• Make sure the invoices are GST-compliant (mentioning GSTIN, HSN/SAC codes, GST rates).

• Maintain documentation to support the 80% rule during audits.