Accounting of purchases under Vat Input Credit
This query is : Resolved
03 March 2010
In case of capital goods, only the amount of fixed asset purchased has to be capitalised and not the vat amount if the vat portion is taken for input credit purposes.
Similarly in case of purchase of raw material, vat paid will be taken as input credit and whether purchases has to be accounted excluding vat portion?
Since two benefits are availed: one is vat input credit and other one is, vat on purchases is also claimed as expense.
Similarly in case of purchase of raw material, vat paid will be taken as input credit and whether purchases has to be accounted excluding vat portion?
Since two benefits are availed: one is vat input credit and other one is, vat on purchases is also claimed as expense.
Shyam Lal Naik
(Expert)
03 March 2010
Dual benefit is not possible. Claim of Input Tax Credit(ITC) and claiming expenditure are mutually exclusive.
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