Set off on items appearin in P&L a/c

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This query is : Resolved

Mihir (Querist)

17 May 2008 Whether set off is available on following items
The items are debited to profit & loss a/c
1) Staff Welfare
2) Maintenacnce of Office Equipments
3) Office Maintenance
4) Printing & Stationery

The above items and similar expenses head may exists in p&l a/c which are not directly related to sale of products.

Whether set off will be available on these items?

Reetika Goel

Reetika Goel (Expert)

17 May 2008 The statement which depicts financial performance includes "Trading A/c" and "Profit & Loss A/c".
Trading account relates to the direct expenses and incomes attributable to the trade carried on by the person.
Profit and Loss account contains all other items which are not directly attributable rather indirectly attributable to the business of person.
Since,
-Staff welfare
-Maintenance of Office Equipments
-Office Maintenance
-Printing and Stationary
all are indirectly related to the business they will be debited to the p&l a/c.

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)

18 May 2008 Set-off against what, is contemplated?

Mihir

Mihir (Querist)

18 May 2008 whether vat set off on above items can be claimed against sales tax liability? The items are supported with tax invoices and are proper in other respects. The only issue is can the benefit of set off can be taken even when these items are directly not related to production and sale of goods? (Provisions as per Maharashtra Value Added tax)

KAUSTUBH M JOSHI

KAUSTUBH M JOSHI (Expert)

19 May 2008 The onus to decide the allowance of set off lies in the hands of the STO. However he may disagree with you since the expenses are not directly related to your trade.

Nilesh Damji Chheda

Nilesh Damji Chheda (Expert)

20 May 2008 Dear Mihir
in case of Maharashtra VAT u can claim the input tax set off in respect of expenses debited to profit & loss account.however the negative list (i.e items on which the set off is not available) & items on which set off is available after reduction in it are given under rule 53 & 54 of Maharashtra Value Added Tax Rules.