Input VAT

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Querist : Anonymous

Querist : Anonymous (Querist)

06 January 2010 I have a question on calculation of Gross profit and effect of VAT Input, can you guide me please with an example given below.

E.g.: Cost of a product Rs.400
VAT Input @12.5% i.e. Rs.50

Selling Price Rs. 480
VAT Output @12.5% i.e. Rs.60

Please explain how VAT Input of Rs.50 reflect or effect in the Trading & profit & Loss A/C and what is my Gross Profit ?

Thank you for responding Advance.

Regards,
Shashi

Vishnu Saboo

Vishnu Saboo (Expert)

08 January 2010 as VAT input credit account would be your asset account as your Cenvat Credit account, if it's closing balance is Debit at the end of Month/Qtr/Year.
but if your payable amount is more than your input amount, then the excess payable would be your expense and shall be shown in Trading & P&L account.

Querist : Anonymous

Querist : Anonymous (Querist)

08 January 2010 Thank you very much sir

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