While vouching in a client company, I came across a voucher relating to printing and stationary. The expenditure was incurred for printing Visiting Cards of the executive officers of the company. The expense was Rs 1000 plus 4% VAT amounting to Rs 40. The concerned accountant has debitted the entire amount of Rs 1040 to Printing and Stationary A/c. The nature of business of the concerned client company is Car Dealership. My question is whether the client company is eligible to claim Input Vat Credit of Rs 40. or should charge the entire amount of Rs 1040 to P/L A/c as no Input Vat credit is admissable in this case.
Knowledgeable members please enlighten. Thank You.
CAclubindia
