I want to know that whwn we purchase machinery as fixed assets and paid vat on that purchase, what shall we do in accounting and vat return. should we show this in our purchase and receive ITC or not
28 September 2015
Mr Arora A :VAT paid on purchase of fixed assets can be claimed. In each state such goods /assets are notified as specific to each industry.It should be used for production of taxable goods and ITC on capital assets can be claimed only after commencing commercial production.Each State has some different conditions on this matter.In some states it should be claimed in instalments spread over few years. In other states in one return itself.It should be shown along with purchases itself,but accounted seperattely.See relevant notifications and rules......mjk
29 September 2015
Sir we have purchased machine for production. Our all sale are exempt. Should we include that amount of machine purchase in our purchase a/c or show in fixed assets.
29 September 2015
Mr A Arora, In all States the policy is ITC on purchase of fixed assets is allowed only when such assets are used for producing taxable goods.If your machine is used for manufacturing tax exempted goods then no ITC is available.It should be accounted in separate property account,not with raw material purchase a/c......mjk
CAclubindia
