Clarification

VAT (Legacy) 152 views 2 replies
Vat is which type of expense?
Replies (2)

It depends on the nature of transaction:

  • If VAT paid is adjusted against VAT payable (i.e. if input credit availed), then it is not an expense. It is grouped under other current assets (VAT paid) and duties & taxes (VAT payable) respectively
  • If input credit is not availed, then it is depedent on the nature of expense on which VAT is levied. If VAT is paid on indirect exps (say stationery), then add the VAT component to the respective expense account (in this case, printing & stationery a/c) but if VAT is paid on direct exps (say purchase of materials), then add the same to the purchase a/c.

AGRRE WITH MADHAVA 

 

BUT IF YOU GENERATE A SEPRATE A/C OF VAT EXPENSES AND DEBIT TO ALL VAT AMOUNT , IT IS ALSO OK AND N O PROBELM

 


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