vat accounting

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

07 November 2010 we r manufacturer we purchase locally some electric & machinery parts & pay tax 4 % & acounted repair & maintence a/c (under direct expense) debit to party a/c credit .

also we have not incurred any output tax liability due to our product exemption in local sales however we r charge cst in interstate sales

please clear that our a/c is ok ??????

CA.Madhusudan B.P.

CA.Madhusudan B.P. (Expert)
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07 November 2010 Can I know to which state you are into as the local State VAT laws applicable to each state.
If you are in Karantaka, there is no 4% 12.5% effectively from 01.04.2010 onwards as it was increased to 5 % & 13.50%.
I think you have lots of query in your mind.
First of all, If you are manufacturer & the sale of the goods donot attract sales tax, no question of VAT arises. What ever you consume in the process of manufacturer shall form part of your direct expenses.
When there is a sale interstate, the output tax CST shall be payable by you.For this you will not be eligibale for any Input VAT credit. There shall be cash outflows to the extent of CST liability every month.

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