Evaporation loss in vat return

This query is : Resolved

Quick Summary

Evaporation loss at a petrol pump isn't directly shown in VAT returns as no sale occurred. However, it impacts your stock levels and potentially input VAT credit. In Gujarat, VAT is calculated on actual sales, and evaporation loss should be recorded as an inventory adjustment in Tally Prime, typically by debiting an evaporation loss account and crediting the fuel stock account.

Bhauti Soni

Bhauti Soni (Querist)
Follow

04 January 2025 where to show petrol pump eveporation loss in VAT form under gujarat vat act. How to make accounting entries in tally prime for evaporation loss?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
Follow

05 January 2025 The evaporation loss would typically not be included in the output VAT because the product was never sold.
However, you need to adjust the stock position to reflect the evaporation loss, which would indirectly impact your input VAT credit (on stock).
Any purchase of fuel will be recorded normally, but you must ensure the loss is deducted from the closing stock to adjust for the actual stock level.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
Follow

05 January 2025 In Gujarat VAT, you will generally show:
VAT Payable on the sale of petrol, diesel, etc., based on the amount sold.
Input VAT credit on the purchase of petrol, diesel, etc., will be claimed normally, subject to the availability of stock and proper documentation.
This is more of an inventory loss, so ensure it is accounted for in the stock registers. No specific VAT entry is needed for evaporation loss in the VAT return.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
Follow

05 January 2025 In Tally Prime, evaporation loss would typically be treated as an inventory loss, and it is handled under the stock item adjustments. Here’s how you can make the accounting entries:
Stock Adjustment Entry for Evaporation Loss:
You need to create an inventory adjustment entry for the evaporation loss, where the stock of the product is reduced.

Entry for Evaporation Loss:
Debit: Evaporation Loss (an expense account or a loss account)
Credit: Fuel Stock (the relevant stock account, such as Petrol, Diesel, etc.)

Message likes : 1 times

Bhauti Soni

Bhauti Soni (Querist)
Follow

05 January 2025 ok...Thank you for your . this is helpful

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
Follow

05 January 2025 You are welcome.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now