When does reverse charge apply under Section 9(3)?

It follows the nature of the supply — legal services, GTA freight, director fees, sponsorship, security services and import of services under Notification 13/2017. A purchase from an unregistered or composition vendor does not automatically attract RCM.

Why is eligible ITC showing zero on an expense?

The expense category is blocked under Section 17(5). Where the Act allows an exception, an amber box appears so you can claim the credit for that specific bill with your reason recorded alongside the original classification.

How is a partly-eligible credit split?

Enter the eligible percentage — the share attributable to taxable use, starting at 50 — and Quillix reverses the remainder in GSTR-3B at 4(B)(1) automatically, per Rule 42/43.

New Other Expense

Where Sidebar › Purchases › New Other Expense

For overheads that are not stock purchases — rent, telephone, professional fees, software. Picking the right expense category is the job: it decides the ledger, the GST rate, the ITC treatment and where the amount lands in GSTR-3B.

Not for stock

Anything bought to resell or consume as inventory goes through New Purchase, which carries per-line ITC treatment. This form is deliberately short because most expense bills need a category and an amount, not a line-by-line breakdown.

SCREENSHOT · the expense form with the category-decision banner open beneath it, naming the ledger, default rate and GSTR-3B table

Book an expense

Start typing the vendor name and pick them from the list.
Start typing the expense category and pick it. Everything downstream follows from this choice.
Enter the supplier's bill or reference number and the bill date.
Enter the taxable amount — the value before GST.
Check the totals panel, then Save Expense.

As soon as you pick a category, a banner spells out exactly what Quillix has inferred — the Tally ledger it will post to, the default GST rate, and the GSTR-3B table the amount lands in. Where the category is driven by a specific provision, it also names the section reference.

Read the banner under the form fields before you save.
If any of it is wrong for this bill, change the category rather than working around it.

This banner is the reasoning trail

It exists so you can challenge the automation rather than take it on trust — which matters, because these choices are what make the Tally export and the return correct.

Override the GST rate

The rate pre-fills from the category. Pick a different one from the GST Rate % dropdown when the actual bill differs — it offers the five main slabs: 0, 5, 12, 18 and 28.
Once a vendor is selected, Quillix shows whether this is intra-state (CGST + SGST) or inter-state (IGST), worked out from the vendor's state.

Note

The intra/inter-state determination is not editable here. If it looks wrong, fix the vendor's state in the vendor master — the bill is reading it, not deciding it.

Claim a blocked credit — the Sec 17(5) exception

Some categories are blocked under Sec 17(5) by default. Where the Act allows an exception, Quillix offers a toggle so you can claim the credit for this specific bill, with your reason recorded.

The amber box only appears when the category you picked is blocked and an exception is legally available for it.
Read the reason given for the block, then tick Apply Sec 17(5) exception if it does not apply to this transaction.
Type a justification — for example that the client makes onward restaurant supplies, or runs a canteen mandated by the Factories Act.

Both versions are kept

The original classification and your override are saved on the record, along with your reason. The automation proposes, you decide, and Quillix remembers which it was.

Split a partly-eligible credit — Rule 42/43

The apportionment box appears on its own when the effective ITC class is partial — a category used for both taxable and exempt supply.
Enter the eligible percentage — the share attributable to taxable use. It starts at 50.
The remainder is reversed in GSTR-3B at 4(B)(1) automatically.

Read the totals before saving

Once there is a taxable amount, a panel shows the tax split, the bill total, and — separately — how much ITC is eligible and how much is ineligible or reversed.

Check Eligible ITC. This is what the client actually gets to claim.
Check Ineligible / Reversed, which appears only when some of the credit is not available.

If Eligible ITC reads zero

On a bill you expected to claim, that means the category is blocked — look for the amber exception box above rather than adjusting the numbers.

Common questions

When does reverse charge apply under Section 9(3)?: It follows the nature of the supply — legal services, GTA freight, director fees, sponsorship, security services and import of services under Notification 13/2017. A purchase from an unregistered or composition vendor does not automatically attract RCM.
Why is eligible ITC showing zero on an expense?: The expense category is blocked under Section 17(5). Where the Act allows an exception, an amber box appears so you can claim the credit for that specific bill with your reason recorded alongside the original classification.
How is a partly-eligible credit split?: Enter the eligible percentage — the share attributable to taxable use, starting at 50 — and Quillix reverses the remainder in GSTR-3B at 4(B)(1) automatically, per Rule 42/43.

Last updated 5 Aug 2026