Vat
This query is : Resolved
19 May 2014
treatment of vat on purchase of fixed assets
20 May 2014
In the case of capital goods purchased for business, only the principal sum should be capitalized leaving the VAT element as a recoverable sum (Input Tax). For example, if machinery worth Rs 10 lakh was purchased and VAT amounting to Rs 1,25,000 paid on it, then only the original value of Rs 10 lakh is capitalized under 'machinery' account. The VAT amount of Rs 1,25,000 should be debited to the VAT account and ultimately reflected as Input Tax.
22 May 2014
yes answer by sandeep is correct and you can use the input VAT for pay you vat liability.
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