input credit

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

28 December 2009 hi
i hve a doubt in accounting , wat amt to be taken for VAT input credit?
one of my client has done the following error , how to recity it?
Example:
assessable value - Rs100
VAT 4 %- Rs 4 (instead of Rs.4 they have collected Rs.12 from thier customer)
the totalled billed amount(including VAT), which is accounted is Rs. 114

wat entry should we pass now & wat is the input credit to be taken?..

kindly reply soon

Arjuna Raina

Arjuna Raina (Expert)
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28 December 2009 You are saying the entry journalized is
Bank a/c.....dr 114
To vat a/c...dr 12
To cust 102

You should reverse the whole entry as:
cust......dr 102
vat a/c...dr 12
To Bank a/c.... 114

and then journalize the new one as
Actual entry:
Bank a/c.....dr 104
To vat payable 4
To Customer 100

As the case tells that u have recovered Rs 12 instead of Rs 4.then your liability will be Rs 12 as vat payable and you can take the input as usual. but the customer who has paid you the rs 12 vat will take the input credit of Rs 12 instead of rs 4

CA SURENDRA KUMAR RAKHECHA

CA SURENDRA KUMAR RAKHECHA (Expert)
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28 December 2009 We cannot reverse Bank a/c once we have deposited the amount into the bank.

I want to say is that -

"by passing journal entries we cannot change the bank account".

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