We purchased some goods from a registered dealer on which Vat is payable..
he raised the invoice:-
Value of goods 20000
Vat @ 4% 800
Total 20800
We take the ITC of Rs.800.
after 2 months we reverse the bill amount due to some rate difference let say Rs.2000
My question is do we also require to reverse the ITC??
Yes you need to reverse the credit.
Regards
Dayananda
Dear Shobhit
Pls make the following entry after two months.
Supplier A/c Dr. 2080/-(2000+80)
To Purchase 2000/-
To Input Tax 80/-
Please correct me if i am wrong.
Yes ITC needs to be Reversed.
CAclubindia
