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Vat reverse

nitesh jha (Accountant) (25 Points)

22 July 2016

Dear sir plz tell me if input vat and out vat both are mentioned on duties & taxes (current liablilties) . So why we Dr to out vat & cr to input vat at the time of vat refundable entry plz help and tell me one thing more can we put input vat under current assests?

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CMA Poornima Madhava (CMA) (13097 Points)
Replied 22 July 2016

You must be referring to softwares like Tally wherein this method is adopted
If yes, input and output VAT are mentioned under duties & taxes for ease of accounting (i.e. software demands them to be so for ease of accounting and report generation)
However, the right group under which input vat can be classified for the purpose of balance sheet is under other current assets.
However, for the sake of accounting and report generation, you may opt for the method available in the software.

nitesh jha (Accountant) (25 Points)
Replied 22 July 2016

Thanks

chandra sekar (Manager-Accounts) (387 Points)
Replied 22 July 2016

Poornima, is t right to group the CST 2% (purchase) in duties and taxes, as the same is part and parcel of Purchases?

CMA Poornima Madhava (CMA) (13097 Points)
Replied 22 July 2016

I think it is better to group under Purchase account rather than duties & taxes. But software (like Tally) is quite confusing when it comes to such transactions I think.

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