tax on capital goods

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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..........

AMAN Gupta

AMAN Gupta (Expert)

14 December 2010 no input of VAT is available if thr goods are not being used for trading or manufacturing purposes

CS ,CMA Shambhu Kr. jha

CS ,CMA Shambhu Kr. jha (Expert)

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

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