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How to Configure VAT advisor with Tally ERP

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VAT, or Value Added Tax, has been implemented since 2018 in the GCC member states, and is a general consumption tax levied on the supply of goods and services. It is charged on every step of the consumer cycle, right from manufacturing to the sale to an end customer. Tally ERP gives you a consolidated solution for all your VAT and other accounting needs so that you can be fully compliant in your business with a complete peace of mind and no fear of regulatory repercussions.

Configure VAT advisor with Tally ERP

Businesses have to maintain their books of records for a minimum of five years as mandate. If you are new to the industry, or are setting up a company in the UAE or other GCC states, it is important to understand VAT, its applications and implications.

VAT Accounting with a Software

It is important to ensure that your company’s book of accounts are updated with the accurate and VAT compliant way as the account records are taken as evidence for the minimum threshold limit for VAT registration. If a business is registered under VAT, they can charge VAT on their sales, goods and services. Once the VAT is paid, the businesses can then claim input tax credit. VAT can be filed online and a VAT software can help you generate VAT returns in the right systematic manner and help to understand how VAT is calculate better. For businesses in the UAE, it is also beneficial to have a feature that allows the generation of an Audit File.

It is imperative that the workforce is knowledgeable about VAT and its impact on the business processes. The VAT consulting software needs to be adapted to the specific requirements of the business. All the practices, procedures and processes change with respect to pricing, procurement of materials, logistics and invoicing have to be aligned to VAT and so it is important to understand the impact of VAT on your business.

Using Tally ERP for VAT

Tally ERP is a software that is equipped all the features required to be fully functional for the computation of VAT. Its capabilities can help a business manage VAT by creating various types of VAT compliant invoices. Transactions can be recorded according to a range of business scenarios and scopes such as transportation and fright charges, discounts, advance and input tax credit receipts, and more. Tally ERP also has the ability to detect errors and lets the user correct the errors through the feature of alerts. You can thus make sure that your business is VAT compliant and up to date with the audits all the time.

Tally ERP records and categorizes all transactions in the VAT Returns report. This report allows the user to verify, resolve, and finalize the return for filing. Before the VAT returns is filed, the user can see a detailed analysis of all the VAT calculations based on their transactions. In the UAE, VAT returns can be generated in a XML or a MS Excel format by breaking down the taxable sales transactions Emirate-wise. The mandated Audit File in the ASCII format is prescribed by the FTA is also available for access.