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Vat input credit on capital goods

Natarajan (AM) (35 Points)

22 December 2011

Iam working in a service based company which purchases two computers (office use - capital goods) for 1,00,000/- with VAT 4000/- (4%). How can I treat this in accounts. Iam not able to claim this as input credit.

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27 Replies

Chethankumar T M (Chartered Accountant) (89 Points)
Replied 22 December 2011

Mr.Natarajan, you have to capitalise the full value including VAT in the books of accounts

2 Like

Bhanu Prakash Rao (Think Beyond Stay Ahead...!) (1064 Points)
Replied 22 December 2011

Hi Natarajan

Is your comapany registred under VAT?

if yes you can claim the vat paid on capital goods as input credit and adjust against the vat payable.

if no then you can capitalize it.

1 Like

Natarajan (AM) (35 Points)
Replied 22 December 2011

Bhanu, Thanks, yes we got registered with VAT and as we a service based company, no payable is here to set-off the Input credit. And is there any provision in accounts (as per accounting standered) to capitalise the VAT input?

PREETI SUMAN (ca final) (94 Points)
Replied 22 December 2011

you have to capitalised only cost of computers.no need to cpitalised the input credit..

1 Like

kavita rani (article assitant. doing MBA) (46 Points)
Replied 22 December 2011

U have to capitalise .

1 Like

(Guest)

100000 is to be capitalised.........

1 Like

Shaji Balan (Accounts in Charge) (25 Points)
Replied 22 December 2011

Capitize all amount inclding VAT

1 Like

RENGARAJ R.K (ADVOCATE) (7557 Points)
Replied 23 December 2011

Capitalise full value including VAT but VAT paid on such, though it is capital goods, computers cannot be set off against any VAT out put tax payable.

rengaraj r.k

1 Like

Neeraj Singh (Executive Account) (94 Points)
Replied 23 December 2011

you should capitalize full value of cmputers including vat . you can't claim for input credit.

1 Like

Praveen Kumar (Manager - Finance & Accounts) (189 Points)
Replied 23 December 2011

You can't claim for input credit of computers

1 Like

CA Kiran Sutrave (CA) (428 Points)
Replied 23 December 2011

Input Vat can be claimed on assets that can be used in the process of production. Since you are using the computer for office purpose, you cannot claim Input Vat on the purchase of computer. The Vat amount is to be added to the cost of asset.

1 Like