accounting VAT refund
This query is : Resolved
25 May 2009
Dear sirs,
we are declaring VAT paid on local purchases as advances & Deposits - Assets since the sale is zero rated ( only exports & no local sales ) and will get back the VAT from Dept as refund under TNVAT Act.Now the doubt is when we get the refund by cheque, the accounting entry reducing the advance and Deposits account will be enough or the receipt should be separately recognised as income under Income Tax Act in P&L.If so, how to pass entry?
we are declaring VAT paid on local purchases as advances & Deposits - Assets since the sale is zero rated ( only exports & no local sales ) and will get back the VAT from Dept as refund under TNVAT Act.Now the doubt is when we get the refund by cheque, the accounting entry reducing the advance and Deposits account will be enough or the receipt should be separately recognised as income under Income Tax Act in P&L.If so, how to pass entry?
chetan soni
(Expert)
25 May 2009
See earlier you have not claim that amount as expenses, so you don't need to give the effect as income in P&L.
Just pass the entry & deduce the amount of deposit assets. In case if refund received is less than the claim amount. Then treat the balance amount as expenses, if the same is non refundable as per VAT provisions.
Just pass the entry & deduce the amount of deposit assets. In case if refund received is less than the claim amount. Then treat the balance amount as expenses, if the same is non refundable as per VAT provisions.
25 May 2009
thanx chetan ji
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