If you sell goods or services in India, every invoice you raise has to be GST-compliant — and getting even one field wrong (a missing HSN code, the wrong tax type, an incorrect GSTIN) can cause problems when you file your returns. The good news: Tally Prime automates almost all of this once it’s set up correctly.
In this guide, you’ll learn exactly how to create a GST invoice in Tally Prime — from enabling GST and setting up ledgers, to recording intrastate and interstate sales, printing the invoice, and avoiding the mistakes that trip up most beginners.
What You Need Before You Start
Before you create your first GST invoice in Tally Prime, make sure you have:
- Tally Prime installed (the latest release, for accurate GST rate updates)
- Company created in Tally Prime with basic business details filled in
- GSTIN handy — your business’s GST registration number
- Customer and product details — names, addresses, GSTIN of regular customers, and HSN/SAC codes for your products or services
If you haven’t backed up your company data recently, this is also a good time to do it — see our guide on how to backup and restore data in Tally Prime before making configuration changes.
Step 1: Enable GST in Tally Prime
GST has to be switched on at the company level before it will appear on any invoice.
- Open Tally Prime and go to Gateway of Tally
- Press F11 (Features) then F3 (Statutory & Taxation)
- Set Enable Goods and Services Tax (GST) to Yes
- Enter your GSTIN/UIN, State, and Registration Type (Regular or Composition)
- Press Ctrl+A to save
Once this is done, GST fields will automatically appear on your sales, purchase, and ledger creation screens.
Step 2: Create GST Ledgers
Next, create the ledgers Tally Prime will use to calculate and post tax on every invoice.
Sales ledger (one per GST rate you use):
- Go to Gateway of Tally, then Accounts Info, then Ledgers, then Create
- Name it clearly, for example “Sales @18%”
- Under: Sales Accounts
- Set GST Applicable to Yes, enter the rate (for example 18%)
Tax ledgers:
- Create separate ledgers for CGST, SGST, and IGST
- Under: Duties & Taxes
- Type of Duty/Tax: GST
Party (customer) ledger:
- Under: Sundry Debtors
- Enter the customer’s GSTIN, State, and Registration Type — this is what tells Tally Prime whether to apply CGST+SGST or IGST
Step 3: Set Up Stock Items with HSN/SAC and GST Rates
If you sell physical goods, your stock items also need GST details attached:
- Go to Gateway of Tally, then Inventory Info, then Stock Items, then Create (or Alter for existing items)
- Set GST Applicable to Yes
- Enter the HSN/SAC code and the GST rate for that item
- Save with Ctrl+A
If you sell services rather than goods, you can skip stock items and use an Accounting Invoice instead of an Item Invoice (more on this below).
Step 4: Create the GST Invoice (Sales Voucher)
With the setup out of the way, raising the actual invoice takes less than a minute.
- Go to Gateway of Tally, then Vouchers, then F8 (Sales)
- Press Ctrl+V to switch to Invoice Mode if it isn’t already selected
- Choose Item Invoice (for goods) or Accounting Invoice (for services)
- Party A/c Name: select the customer ledger you created in Step 2
- Sales Ledger: select the relevant GST sales ledger (for example Sales @18%)
- Add the item or service, quantity, and rate — Tally Prime calculates the taxable value automatically
- Tally Prime will auto-apply CGST + SGST (same state) or IGST (different state) based on the customer’s registered state
- Press Alt+A to view the full tax breakup before saving
- Press Ctrl+A to save the invoice
That’s it — your GST-compliant invoice is now recorded and ready to print.
Intrastate vs Interstate GST Invoices
This is where most beginners get confused, so here’s the simple rule:
Intrastate (buyer and seller in the same state): CGST + SGST, split equally. Example: a sale within Punjab is taxed at 9% CGST + 9% SGST = 18% total.
Interstate (buyer and seller in different states): IGST, a single tax. Example: a sale from Punjab to Maharashtra is taxed at 18% IGST.
Tally Prime determines this automatically using the “Place of Supply” — which comes from the state entered in the party ledger — so double-check this field is correct for every new customer you create.
Step 5: Print and Customize Your Invoice
Once your invoice is saved, you can print or export it:
- From the saved voucher screen, press Alt+P for print options, or go to Gateway of Tally, then Display, then Day Book and select the invoice
- Press F12 (Configure) to customize what appears — company logo, GSTIN, HSN/SAC summary, bank details, terms, etc.
- Choose your output: Printer or PDF (useful for emailing invoices directly to customers)
You can also upload a logo under F12, then General, so every invoice is print-ready with your branding.
Common Mistakes to Avoid
- Wrong or missing GSTIN/state on the party ledger — this causes CGST/SGST to be charged instead of IGST (or vice versa), which is a common reason GSTR-1 entries get rejected
- Missing HSN/SAC codes — required on most B2B invoices above the prescribed turnover threshold
- Using one sales ledger for all GST rates — create a separate ledger per rate slab so your GST reports stay accurate
- Skipping the tax breakup check (Alt+A) before saving — always verify the split before finalizing
- Not reconciling sales data regularly — pair your invoicing with a routine check using our guide on how to generate financial reports in Tally Prime
FAQs
Can Tally Prime handle multiple GST rates on one invoice? Yes. Each item or service can carry its own GST rate, and Tally Prime calculates and splits the tax for each line separately.
Do I need a separate ledger for every GST rate? It’s strongly recommended. Using rate-specific sales ledgers (Sales @5%, Sales @18%, etc.) keeps your GSTR-1 and other GST reports accurate and easy to reconcile.
How do I edit a GST invoice after saving it? Go to Vouchers, locate the invoice in the Day Book, press Enter to open it, make your correction, and save again with Ctrl+A.
Is e-invoicing different from a regular GST invoice in Tally Prime? Yes. e-Invoicing is mandatory for businesses above a government-notified turnover threshold. Once enabled, Tally Prime sends invoice details directly to the GST Invoice Registration Portal (IRP) and fetches the IRN and QR code automatically — no manual upload required.
Can I generate a GST invoice for a service business without stock items? Yes — use Accounting Invoice mode instead of Item Invoice mode. You’ll bill against service ledgers directly, without needing stock/inventory setup.
Found this guide helpful? Check out our related guides on Tally Prime keyboard shortcuts and bank reconciliation in Tally Prime to speed up your daily accounting workflow.
