Goods and Services Tax (GST) accounting is a core part of Indian business operations. Calculate CGST & SGST in Tally Prime For businesses, accountants, and Chartered Accountants (CAs), accurate GST calculation is critical to ensure compliance and avoid penalties.

Every day thousands of small businesses struggle with GST entries in Tally Prime, especially when CGST and SGST do not calculate automatically

Tally Prime is one of the most widely used accounting software in India. However, many users still face practical issues such as:

• GST not calculating automatically
• Incorrect CGST/SGST amounts in invoices
• Errors in GST returns
• Wrong ledger configuration
• Confusion between tax types

From my practical experience of handling Tally setups for small businesses and traders, I have noticed that more than 80% of GST calculation errors happen due to incorrect ledger configuration.

In this blog, we will cover complete practical setup of CGST & SGST auto-calculation in Tally Prime with real-life examples, formulas, and professional workflow based on 2026 updates.

What’s Updated in Tally Prime for GST in 2026?

As of 2026, there are no major GST law changes affecting basic CGST/SGST calculation. However, Tally Prime updates have improved:

• Improved GST return error detection in GSTR-1 and GSTR-3B
• Automatic e-invoice data synchronization
• Better HSN/SAC code validation while creating invoices
• Faster GST computation engine
• Enhanced GST reconciliation reports

The fundamental process of enabling and auto-calculating CGST & SGST remains the same, which we will now understand in detail.

Calculate CGST & SGST in Tally Prime

Understanding CGST & SGST – Concept Before Setup

Before configuring Tally Prime, it is important to understand the concept.

What is CGST and SGST?

For intra-state sales (sales within the same state):

• GST is divided into:
  • CGST – Central GST
  • SGST – State GST

Formula Used in GST Calculation:

If GST Rate = 18%

Then:

• CGST = 9%
• SGST = 9%

Practical Formula:

GST Amount = Taxable Value × GST Rate

CGST = Taxable Value × (GST Rate / 2)
SGST = Taxable Value × (GST Rate / 2)

This formula is automatically applied by Tally Prime when GST configuration is correct.

Practical Example

Let us understand this with a simple real-life business example

Sale Value: ₹50,000
GST Rate: 18%

Calculation:

CGST = 50,000 × 9% = ₹4,500
SGST = 50,000 × 9% = ₹4,500

Total Invoice Value = ₹59,000

Tally Prime performs this calculation automatically when configured correctly.

Step 1 – Enable GST in Tally Prime (Basic Requirement)

Before entering your details in Tally, ensure that your GST registration is active. You can verify your GSTIN and check the latest filing status directly on the official [GST Portal (Government of India)] to avoid any compliance issues.

For Beginners & Accountants

Before creating any invoice, GST must be enabled.

Go to:

👉 Gateway of Tally → F11: Features → Statutory & Taxation

Set:

• Enable GST: YES
• Enter GSTIN
• Select State
• Set Registration Type (Regular / Composition)

Many beginners skip this step, and that is the main reason GST does not calculate in invoices.

To understand the fundamental rules of GST application, you may also reference our step-by-step guide on [How to Apply GST in Tally ERP 9] for a complete conceptual overview.

Step 2 – Creating Proper GST Ledgers (Most Important Part)

Even professional accountants make mistakes here.

Without correct ledger configuration, Tally Prime will never calculate GST automatically, even if all other settings are correct.

If you are still using the older version of Tally, you can check out our detailed guide on [How to Create GST Ledgers in Tally ERP 9] to make your setup even easier and error-free.

A. Create CGST Ledger

Navigate to:

👉 Gateway of Tally → Create → Ledger

Enter:

• Ledger Name: CGST
• Under: Duties & Taxes
• Type of Duty/Tax: GST
• Tax Type: Central Tax
• Percentage: 9%

Save the ledger.

B. Create SGST Ledger

Similarly:

• Ledger Name: SGST
• Under: Duties & Taxes
• Type of Duty/Tax: GST
• Tax Type: State Tax
• Percentage: 9%

Save.

Professional Tip for Accountants:

Always create separate ledgers for:

• CGST
• SGST
• IGST
• Input GST
• Output GST
• Reverse Charge GST (if applicable)

This ensures proper GST return filing and reconciliation.

Step 3 – Configure Sales & Purchase Ledgers

Create Sales Ledger with GST Enabled

Go to:

👉 Create → Ledger

• Name: Sales Account
• Under: Sales Accounts
• Is GST Applicable: YES
• Set/Alter GST Details: YES

This ensures GST will be calculated on every sales entry.

Step 4 – Configure Stock Items with GST Rate

Auto-calculation depends heavily on stock item configuration.

Example Setup:

Create Stock Item:

• Item Name: Mobile Charger
• GST Rate: 18%

Now Tally knows:

Professional accountants always configure GST rate at stock item level to avoid manual tax selection mistakes.

Whenever this item is sold → apply 18% GST (9% CGST + 9% SGST)

It is essential to use the correct HSN code and tax slab for your products. If you are unsure about the current rates, you can use the [CBIC GST Rate Finder Tool] to find the exact GST percentage and HSN classification for your stock items.

Step 5 – Practical Invoice Entry (Real Example)

Let’s see a professional practical example:

Scenario:

• Customer: ABC Traders
• Item: Laptop
• Quantity: 2
• Rate: ₹30,000 each
• GST Rate: 18%

Before recording a sales entry, it is crucial to understand the tax logic. You can refer to our professional tutorial on [How to Calculate GST in Tally ERP 9] to master the background workflow.

Invoice Entry in Tally Prime

👉 Gateway of Tally → Accounting Vouchers → F8 Sales

Select:

• Party Name
• Stock Item
• Quantity
• Rate

Then select:

• CGST Ledger
• SGST Ledger

Automatic Calculation by Tally:

Taxable Value = ₹60,000

CGST @9% = ₹5,400
SGST @9% = ₹5,400

Total Invoice Value = ₹70,800

This is the exact workflow used by accountants in real office environments.

Real-Life Business Scenarios

1. Retail Shop Example

A mobile accessories shop sells goods worth ₹10,000 within the same state at 18% GST.
Tally Prime will automatically calculate:

• CGST: ₹900
• SGST: ₹900
• Total Invoice: ₹11,800

This is the most common scenario for small traders.

2. Service Provider Example

A graphic designer raises a service invoice of ₹25,000 with 18% GST.
Auto-calculation in Tally Prime will be:

• CGST: ₹2,250
• SGST: ₹2,250
• Total Invoice: ₹29,500

This proves that the same setup works perfectly for services as well.

3. Wholesaler Example

A wholesaler sells goods worth ₹1,20,000 to a local dealer at 12% GST.
Tally Prime calculation:

• CGST @6% = ₹7,200
• SGST @6% = ₹7,200
• Final Invoice = ₹1,34,400

These practical scenarios show how auto-calculation works across different types of businesses.

For Accountants & CA Professionals – Advanced Points

GST Classification Best Practices

• Use proper HSN/SAC codes
• Configure GST rates product-wise
• Maintain separate ledgers for:
  • Input CGST
  • Input SGST
  • Output CGST
  • Output SGST

This helps in:

✔ Accurate GSTR-3B
✔ Easy reconciliation
✔ Clean audit trail ✔ Smooth GST audit process

Common Errors and Their Solutions

Problem	Reason	Solution
GST not calculating	GST not enabled	Enable GST in F11
Wrong GST amount	Wrong percentage in ledger	Correct ledger rate
CGST/SGST not appearing	Ledgers not created	Create proper ledgers
GST reports mismatch	Wrong tax type selected	Use correct GST classification

Who Benefits from This Setup?

Beginners:

• Easy billing
• No manual calculation
• Error-free invoices

Accountants:

• Faster accounting
• Accurate GST returns
• Professional reporting

CA Professionals:

• Proper compliance
• Easy audits
• Correct tax liability calculation

Conclusion

Enabling and auto-calculating CGST & SGST in Tally Prime is essential for accurate GST compliance.

By following:

• Correct GST configuration
• Proper ledger creation
• Stock item GST setup

You can fully automate GST calculations and maintain error-free accounts.

This guide follows the latest practical GST workflow used in Tally Prime in 2026 and is designed to help beginners, accountants, and CA professionals work more efficiently and accurately.

Frequently Asked Questions (FAQ)

Disclaimer

This blog is for informational and educational purposes only. The steps mentioned are based on standard Tally Prime features available in 2026. GST laws and software features may change over time. Users are advised to consult their CA or tax professional before final implementation.