Discloser of vat in accounts

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

02 January 2013 hi i want to know that one of my client recorded their sales inclusive of vat means no separate accounting done for input vat receivable and output vat payable and vat paid directly to department through entry vat payable a/c dr. and bank a/c cr. therefor vat payable appear as dr. balance in the balance sheet. therefor i want to know that how dr. balance of vat payable be disclose in the books.

CA. Pankaj Mittal

CA. Pankaj Mittal (Expert)
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02 January 2013 You should credit seperately amt related to output vat payable when passing sales entry and while payment vat payable is debited and bank credited so no question arise of debit balance of vat payable.

or

If you book sales inclusive of vat then seperately create vat paid ledger under direct expenses instead of vat payable Ledger it automatically shown in p&l and no question of showing it in balancesheet.

This is my personal opinion.

Querist : Anonymous

Querist : Anonymous (Querist)

03 January 2013 Thanks. but i have shown it in trading account by Gross sales-Sales Tax. is this correct?

CA. Pankaj Mittal

CA. Pankaj Mittal (Expert)
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04 January 2013 yes if you had shown (gross sales-vat paid )= net sales in credit side of trading a/c it is also correct.

I was also saying same thing in my previous reply that to show gross sales on credit side and vat paid on debit side of trading a/c ultimately net sales is your revenue.

CA. Pankaj Mittal

CA. Pankaj Mittal (Expert)
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04 January 2013 My friend Now a Days trading a/c & p&l a/c are shown within p&la/c only and not seperatrely made if you are a trading concern.