Short vat refund recd.

There is no point in Carry forwarding it further, seems asst for that year completed

Do, write off that balance, to do so here is the adjustment entry

VAT Paid A/c   or  VAT Credit Written off A/c (Revenue Nature)            Dr   3,111

 To    VAT Credit A/c ( The account in Balance sheet)                                              Cr 3,111

vat paid amount rs.3111 will allow under income tax act?

All Government taxes are allowed in IT Act, provided the same is not penalty/interest nature.

regards,

rengaraj r.k

The Vat refund in question is always shown as asset.The refund received should be added to income by virtue of section 41 in the year of receipt by deducting such short receipt.Thus if the recipt is taxed  then the write off is allowed.