How to calculate vat when tax rate input and output varies

This query is : Resolved

mehul (Querist)
Follow

08 November 2011 how to calculate value added tax if vat rate is different?ie...,4% on input 12.5% sales then how do we claiim credit

mithun

mithun (Expert)
Follow

10 November 2011 suppose you have taken the input credit of Rs.100 and when you sold the goods you charged Rs.60 in invoice which you are going to collect from buyer,then you didnot have to pay to the govt any amount because you had input credit of Rs.100 and output tax of Rs.60. The balance Rs.60 can be carried forward to the next financial year.

Hitender Gaur

Hitender Gaur (Expert)
Follow

10 November 2011 Read The Case:

Input VAT 4% 100
Input Vat 12.5% 350
Total 450

Sale Invoice
Output VAT 4% 250
Output Vat 12.5% 50
Total 400

In the above case you have to file credit claim of input Vat as Rs450/- and Your liability for the same period is Rs.400/- so, you will carry forward Rs.50/- to next tax period. One important fact I would like to clear you that %age of VAT is not a matter, matter is value (either it is 5%,4% ,12.5% etc.) There is no rule in VAT which bound you that you can claim 12.5% input Vat against liability of 12.5% output vat only.

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