Deducting output VAT of Sales Returns

Chandra Sekhar Munikoti (Accountant) (36 Points)

12 October 2007  

We have been deducting Out put VAT on Sales Retunrs.


By passing following entries

When Sale is made

Party a/c Dr

To Sales a/c

To Out put VAT a/c


When Sales returns

Output VAT a/c Dr

Sales Returns a/c Dr

To Party a/c

Now department people are telling that VAT should not be deducted on sales return

Pls advice me