Hi all,
XYZ company is following the practice of showing sales net of VAT till date.
but now it wants to show this item on gross basis and thereafter reduce VAT amount and show accordingly.
My question is 1. Can the company make such cangeover and if yes under what rule/section/legislation.
2. what are the disclosure requirements
3. also many companies show the sales on a gross basis and reduce excise duty. this is required under which legislation.
Kindly reply on urgent basis
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Vat disclosure
Replies (4)
Hi all kaise ho
you tell me first, whether you seeking advice from Income tax or Compaines Act point of view.
bye
Company can change the method of accounting during the year, Such change in accounting will not affect the net profit of the company. further company should make necessary disclosure in Notes to Accounts. Tax Paid for the month will be treated as Selling and Distribution Expenses.
U can refer any Ltd companys' b/S and refer the notes to account eg. Cana Glass Ltd.
VAT is an indirect Tax which u charge from the vustomer & pay to concerned deptt. So, its not ur income.
Therefore, u can n't include the amt of VAT in turnover.It should be shown as liability till the time u deposit it.
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