CA Krishna Chaitanya M (Chartered Accountant) (463 Points)
16 September 2011what is the accounting treatment for restricted input vat ( i.e inputs used in both exempt goods and taxable goods, what is the accounting treatment in the books of assesse, is those amount treated as expense or charged to partners capital accounts.
if it is treated as expense, is it allowable under income tax act?
C.A. Sandeep Wawhal
(CA, PGDFM, BCom)
(1825 Points)
Replied 16 September 2011
Input vat which is disallowable should be added to the expenses for which it is charged if input vat for which credit will be allwed should be treated to duties and taxes under current liabilities.
praveen
(Chartered Accountant)
(6971 Points)
Replied 16 September 2011
it should be treated as an expenditure.
CA Krishna Chaitanya M
(Chartered Accountant)
(463 Points)
Replied 16 September 2011
is it allowable under income tax act?
U S Sharma
(glidor@gmail.com)
(21056 Points)
Replied 17 September 2011
when the inputs are vat paid and final products are exempted then gross amount including vat is reflected as purchase i.e vat input credit is not availed on such inputs.
avail input credit of only those inputs which used in taxable outputs,
Better to divide the purchase and sales in two segments taxable and tax free, this will not generate any prob in accounting.
Live Course on Python for Financial Analysis: Unlocking Efficiency in Accounting and Finance
CAclubindia
