tax on capital goods
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
14 December 2010
some one please tell me that if i purchase some fixed asset like furniture in cash and on that the vat is to be paid then wt is the accounting treat ment for that and can i take input creadit on such of these purchase plz tell me..........
14 December 2010
no input of VAT is available if thr goods are not being used for trading or manufacturing purposes
14 December 2010
you can pass the following journal entries in the book of account that is as follow Furniture a/c ---Dr
To cash A/C
you need not to debit the vat account separately coz , VAT and what ever other taxes paid on purchase of capital asset will be added to that particular asset and need not to treat separatly .
As far as credit are concerns you can 't take the credit for that ,coz it is consumable goods not directly related to the production or trading of the goods .
Thanks
you can pass the following journal entries in the book of account that is as follow Furniture a/c ---Dr
To cash A/C
you need not to debit the vat account separately coz , VAT and what ever other taxes paid on purchase of capital asset will be added to that particular asset and need not to treat separatly .
As far as credit are concerns you can 't take the credit for that ,coz it is consumable goods not directly related to the production or trading of the goods .
Thanks
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