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Asset Purchase Entry Approach

29 April 2020

In case if company has exempted GST Sale and Purchase,What should be the approach to enter the Asset Purchase having GST invoices, as the GST can not be claimed/refunded in this case:

1. Enter Asset Purchase in Purchase Voucher (F9) and enter GST applicable and consider Asset Value excluding GST Amount.

2. Enter Asset Purchase in Journal Voucher (F7) and do not enter GST applicable separately but consider Asset Value including GST Applicable (Total Invoice Value).

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5 Replies

RAJA P M ("Do the Right Thing...!!!") (127058 Points)
Replied 30 April 2020

If You are make exempted supplies then ITC not available.
So,
As per above You can't book asset with GST Tax amount...

Enter the Asset as per point no 1.

1 Like

kamal kumar (none) (36 Points)
Replied 30 April 2020

If you are unable to utilise GST input (i.e. in case of exempt Outward supplies ) you should consider the input along with asset value so that u can claim such amount as expense ( or as depreciation in case the asset is a capital asset)

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RAJA P M ("Do the Right Thing...!!!") (127058 Points)
Replied 30 April 2020

@ Mr Kamal Kumar.,

As per Your view not applicable for exempted supplies...

1 Like

kamal kumar (none) (36 Points)
Replied 30 April 2020

Kindly refer Para 17 of AS 10 Property, Plant and Equipment, regarding valuation of Asset in question. Para 17 covers Elements of cost of an item of PPE wherein Non refundable purchase taxes (in current case the GST input tax paid) are included in the cost of asset.

Also requesting you to not frame your opinion on limited reading of a particular statue while maintaining books of accounts which can lead to issues later at Audit stage.

Kindly support your disagreements with appropriate rules/standards/provisions wherever possible and not just mere personal opinion.

1 Like

RAJA P M ("Do the Right Thing...!!!") (127058 Points)
Replied 30 April 2020

@ Mr Kamal Kumar.,

Very Well... &
( Also requesting you to not frame your opinion on limited reading of a particular statue while maintaining books of accounts which can lead to issues later at Audit stage. )

very bad wordings.

I know You are (very) well versed in AS 10. Enjoy Your experience and expertise with AS 10.

But,

I read simply the query with GST and replied based on GST with all other Taxation & Standards...

Note : before typing check Your typings. and before click the send button check out Your typings again. Bcoz, The typings read by human beings. Not read by machines...