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Vat input and output (VAT)

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This query is : Open

( Querist )
08 August 2011

Dear All,

We are dealing as a dealer between Manufacturers and end users. It is a Pvt. Ltd. company.

We are purchasing and selling UPS, Batteries and Inverters. For that we are getting Input VAT as well as Out VAT.

1.Apart from that we purchase some times scrap batteries from our customers and resale those scrap batteries to our suppliers. When we are purchasing scrap batteries they are not giving any invoice and VAT Input.

How do we have to pass entry for that when we are selling those scrap batteries?
Should we consider VAT for this transactions.

2. When we are getting Employee ID cards and Business card, our suppliers charging VAT on those transactions.

How do we have to pass entry for that? Can we get VAT input for that by showing as purchase or do we have to show all that amount as indirect expenses. can we show as an asset?

Please clarify my doubts.

Thanking you all.

MJ Krishnamurthy

( Expert )
09 August 2011

Mr Rajashekar,
While buying scrap batteries from your customers you have to raise a purchase bill u/s 3(b) of KVAT Act or such Act,charge VAT at applicable rates(i.e.14% in Karnataka)and pay it to the department.
When you sell these scrap to your suppliers you have to chrge output tax in the sale invoice.The purchase tax paid already to the department can be deducted from the output now payable. This can not be taken as an asset or expenses.

Rajashekar Tadem

( Querist )
10 August 2011

Dear Mr.MJ Krishnamurthy thanks for your valuable information sharing with me.

Please also confirm, how should we pass the accounting entries when we are purchasing Employees ID, Business cards. Our suppliers are charging VAT for this. Can we claim that VAT as INPUT VAT or should we treat as indirect expenses.

I am very glade if you share your valuable information.

Thanking you,

MJ Krishnamurthy

( Expert )
10 August 2011

Mr Rajashekar,
Tax paid on purchase of Employees,ID cards, business cards can not be claimed,because they wer not purchased for resale or as raw material.Such purchases are office expenses only.

Rajashekar Tadem

( Querist )
10 August 2011

Thank very much sir


( Expert )
23 January 2015

can we take cenvat credit of inverter ^& bettery purchase for factary use,,plz suggest



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