Pls can anyone specify about different methods of subtraction method calucaltion ?
My biggest doubt is about indirect subtraction and intermediate subtraction method.
Pls specify with examples.... thanks everyone in advance....
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Vat doubt very urgent
Replies (4)
Subtraction method: value added = sales -purchase
This mmethod is generally followed when tax is not charged separately in the invoice.
Vat liability =(rate of vat/100+ rate of vat )*taxable turnover
Kinds of subtraction methods:
1. Direct: value added = aggregate value of sales exclusive of tax - aggregate value of purchases excl. Of tax
2.Intermediate: value added: sales - aggregate value of purchases inclusive of tax
3. Indirect: value added= aggregate sales- aggregate purchases both inclusive of tax.
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