VAT

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CA. Mala Rohara (Querist)

03 November 2009 A soya Company purchases Soya Seeds from the supplier and supplier charge VAT @ 4% in MP. Company makes payment to supplier without VAT and issue TDS Certificate for the VAT Amount as per Section 26-A of M.P. VAT Act.
Summarize position is as follows:

Purchase Value 20 M.T. @ 17,000/- per M.T. = 3,40,000/-
Add: VAT @ 4% = 13,600/-
Total Purchase Value = 3,53,600/-

Company is making payment of Rs. 3,40,000/- to supplier and issuing TDS certificate of Rs. 13,600/- to supplier. Amount of TDS of Rs. 13,600/- is not required to be deposited to govt.

What will be the accounting Entry?

CA SANJAY MUKHERJEE

CA SANJAY MUKHERJEE (Expert)

03 November 2009 Purchase A/C dr. 340000
Input Vat Credit A/c dr 13600

To Supplier A/C 340000
To Input Vat Payable A/C 13600

(Assuming Input Vat to be deposited with MP Govt against TDS certificate issued.)

CA. Mala Rohara

CA. Mala Rohara (Querist)

03 November 2009

Kishanlal Paliwal

Kishanlal Paliwal (Expert)

04 November 2009 The entries in following manner will present more perfactly scnario. presented in sequential manner as under;

(1) Entry for purchase

Inventory A/c Dr. (With Inventory amt)
Exp.on purchase A/c Dr. (Exp.amt payable)
VAT Receivable - Input A/c Dr. (VAT included in vendorâ€™s Invoice for Issue of TDS certificate)

TDS under VAT A/c Cr. (VAT amt.to be deposited with deptt.)
Vendorâ€™s A/c Cr. (Amt.including exp.by vendor but excluding VAT)

(2) Deposit of VAT with Commercial Department
TDS under VAT A/c Dr.
Bank A/c Dr.

(3) Issue of TDS under VAT certificate
Vendorâ€™s A/c Dr.
VAT Receivable - Input A/c Cr.

Kindly, revert with valuable opinion please, if any.

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