Vat & cst

Account as follows:

On purchases: Dr. Respective purchase a/c

                       Dr. Input Tax Credit a/c

                      Cr. Sundry Creditor a/c

On sales: Dr. Sundry Debtor a/c

                Cr.  Respective Sales a/c

               Cr. VAT Collected a/c.

On month end: [for the amount input credit (or) vat collection, whichever is lower]

                        Dr. VAT Collected a/c

                        Cr. Input tax credit a/c

[if input credit is higher, this is to be c/f, if vat collection is higher, this is to be remitted]

agreee with above

How should i incorporate them in the financial statements?

Regards

VAT Input credit to be grouped under current assets.

VAT collection account to be grouped under "Duties & Taxes" - Current Liabilities.

In the month end, only one account will have the balance and that will automatically fall in the balance sheet, once you pass the necessary entries.

yes, i also agree with miss. k chitra...comments...

Agree with K. Chitra

Are there any alternative methods?

Regards