EXCESS OF ITC PAID SHOW BE TREATED LIKE EXPENSES WILL IT SHOW IN P&L STATEMENT?

ITC is balance sheet figure ... so it not shown in P&L statement.. is it correct..?

Replies (10)
Quick Summary
This discussion clarifies that excess Input Tax Credit (ITC) is a balance sheet figure and should be shown as a current asset, typically under 'Balance with Revenue Authority'. While the payment of tax itself can be reflected in the P&L statement, any remaining ITC balance after offsetting tax liabilities does not affect the P&L. Instead, it's carried forward as a current asset.

Yes , It is correct .
Excess amount paid after setoff itc can I can show in P&L STATEMENT?
No , Excess balance ( ITC ) remain after set off tax liability if any , You have to show in Current Asset , Balance sheet ,as '" Balance with Revenue Authority A/c "
Input. 1000
output 1200
tax paid 200
that 200can I show in p&l statement?
Yes , Payment of tax you can show in P&L .

But if
Out put 1000
input 1200
then balance 200 /- ITC you have to show as current asset ,
Payment of tax is P&L figure
Input tax credit is Balance sheet figure .
Balance tax amount will be paid through cash.. then P&L STATEMENT will not effect only balance will be paid effect.. in duties and taxes
Actually. ITC is always debit balance and should be shown under current assets , however for our convince , we are showing Input Tax credit under Duties and Taxes , because out put tax less ITC will get net tax payable in balance sheet only .

so I pass entry

Out put tax A/c Dr 1200
To Input tax A/c Cr. 1000
To Tax payable A/c Cr 200
now you tell under which head you are going show Tax payable ?. like
Out tax under Duties and Taxes
Input tax under Duties and Taxes .
Taxable payable under indirect expenses
Correct Dear , so tax payable in P&L and ITC in Balance sheet .

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