1. A registered taxpayer has generated a sales invoice which has Rs. 500 as tax for the final product and collected the same from his final customer. Let us assume he has already paid a tax of Rs. 200 while purchasing the raw material. Now the supplier from whom he may have bought raw material will deposit Rs 200 to the government. Thus, this Rs 200 is the tax paid on the inputs which he can deduct from his liability on the final product. So, the taxpayer needs to pay tax only of Rs. 300 (i.e.Rs. 500 – 200).
2. XYZ company hired a subcontractor to construct a shed for 3,00,000₹. XYZ can claim itc on the work.
Can someone help me with final account journal entries for the above examples please?
Txs
CAclubindia
