Vat paid on property purchased
This query is : Resolved
10 September 2013
if a proprietor purchases a property and subsequently pays vat on the same.Should that amount be capitalized to the cost of the property purchased?
CA Pallav Singhania
(Expert)
10 September 2013
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).
But one thing is that if we will adjust with out put tax then in that condition if we will sale that capital items with in three year we should reversed with input either we will capitalised then no revsersel entry of tax has been made.
But one thing is that if we will adjust with out put tax then in that condition if we will sale that capital items with in three year we should reversed with input either we will capitalised then no revsersel entry of tax has been made.
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