Treatment of vat paid on purchase of any asset
This query is : Resolved
31 December 2009
Sir i want to know the accounting treatment of vat paid on purchase of an asset, shall it be bifurcated like we does in case of general purchase of goods or shall it be treated in any other way?
31 December 2009
Dear Singh
There are two ways
1) if you take credit of Vat paid on Capital Asset then you have to open separate account with the name of "Vat paid on Capital Asset" Note: Vat on Capital assets is not fully allowed but there are Reduction.
2)If you are not taking credit of Vat paid on Capital Asset then Capitalised the whole vat amount with Cost of Asset
There are two ways
1) if you take credit of Vat paid on Capital Asset then you have to open separate account with the name of "Vat paid on Capital Asset" Note: Vat on Capital assets is not fully allowed but there are Reduction.
2)If you are not taking credit of Vat paid on Capital Asset then Capitalised the whole vat amount with Cost of Asset
31 December 2009
if your concern is a manufacturing concern then you can avail input credit of such vat (in installment - statewise differ. Use of such asset is crucial cirteria. In other case it is to be added to the cost of the asset and depreciation is to be claimed on the same.
eg. your concern is a manufacturing concern then VAT input is to be taken.
if your concern is a service providing concern like beauty parlour then services provided are not subjected to VAT hence the equipments purchased for such concern is not eligible for input vat credit.
eg. your concern is a manufacturing concern then VAT input is to be taken.
if your concern is a service providing concern like beauty parlour then services provided are not subjected to VAT hence the equipments purchased for such concern is not eligible for input vat credit.
02 January 2010
Thank u Sirs for ur guidance
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- GSTR-1A How to update Invoice
- Excess salary payment.
- Capital gain from sale of house property
- Stamp Paper for partnership firm change new income tax 2025
- Current Account Opening for Sole Proprietorship with Udyam Certificate - Zero Turnover
- TDS on Purchase of Immovable Property by NRI from NRI
- FORM 26A APPLICABILITY
- SFT Cash Deposit in Current Account
- When TDS on GST applied
- Before GSTAT- APL-02 Vs APL-04
- Cash gift by grand mother to her grand daughter
- Tax amount diff in Gstr1 and 3B in tax compare reports
- Tds on GST in connection with sale to public company
- Restoration of certificate of practice
- Regarding change in correspondence address in SSP portal
- No Compliences after incorporation
- USEFUL LIFE OF USED/SECOND HAND COMMERCIAL VEHICLES
- Claiming TDS deducted by builder on Hardship compensation and Corpus
- Address Change to another state of a Registered Trust with 12AB approval
- Updated return in budget 2026
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
CAclubindia
