accounting standard 10

IPCC 187 views 4 replies
kindly explain the fact while valuating fixed assets why vat should be added if that manufacturer also engages himself in selling its finished product. If situation pertains to old tax policy
Replies (4)
As per my knowledge, irrespective of tax policy ultimate cost of any fixed asset should be the cost plus exp which incurred by manufacturer while acquiring an asset. also exp such as vat cannot be set off easily and many times fully for that matters vat is added in actual cost of asset considering vat as another exp to asset and then dep will charge on it.but question's information is incomplete on part of type of asset based on that answer will definitely changed.
Sorry the question must be in an incomplete mode as the asset is a plant & machinery useful directly/ Indirectly in support of manufacture of dutifiable product. then what is your suggestion in this case as per treatment in as-10
as asset in question is plant and machinery thats why we can take full set off of vat which is paid on fixed asset while purchasing it so it is advisable not to add vat in cost of fixed asset.

One query please if in such case suppose we are setting off the input tax from Vat/Excise/GST liability for that financial year what ever it comes out, then we must not be eligible to avail depriciation in that financial year.................?

That means the depreciation can be entitled on an annual basis from the next financial year as per it's existence in support of manufacture.......................is that so........................?


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