Vat on sales and purchases
This query is : Resolved
19 August 2013
with regard to the tax audit, whether vat on sales and purchases need to be shown in profit and loss account.
19 August 2013
Net effect of VAT payable (input is less than output vat) or VAT refundable (i.e. if you input vat is greater than out put vat)should be shown in b/s
as vat input and output are not items of purchase/sale it has to be routed through the b/s
As far as tax computation is concern, add the output vat to sales and deduct the total vat paid on or before the due date.
To sum, if the person has not paid the vat on or before the due date, add to the outstanding amount to profit for calculating the income from B/P and the amount has be to mentioned in audit report.
as vat input and output are not items of purchase/sale it has to be routed through the b/s
As far as tax computation is concern, add the output vat to sales and deduct the total vat paid on or before the due date.
To sum, if the person has not paid the vat on or before the due date, add to the outstanding amount to profit for calculating the income from B/P and the amount has be to mentioned in audit report.
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