Vat entry & accounting treatment

1812 views 2 replies

Hi, Its Mahendra,

I want to know that :

Question 1 :

One of my client has made sale of Rs.10,000/- , Net 12.50% is Rs.8,888/- and Vat 12.50% is Rs.1,111/-.

Now the party has deducted vat amount and only paid Rs.8,888/-. so how to make an entry and what will be vat payable my party to government.

 

Question 2 :

Another is my client has purchase goods Rs.50000/- and when goods received there is a damaged in goods nearly amount to Rs.20,000/- goods are taxable @ 12.50% vat. , my client has paid only Rs.30,000/-. so what will be the entry and what will be vat adjustment.

 

Please reply.

 

 

Replies (2)

1. Party cannot deduct VAT and pay the balancve amount only. Either you account in the way you did, and let the remaining balance as debtor, if it is receivable. Otherwise, treat 8888 as cum-VAT price and account as. Net Sales - 7900, VAT 12.5% - 988.

 

2. The same way if Rs. 30000 is to be treated as cum-VAT. So 26667 will be Net Sales and 3333 will be VAT.

Hi

total sale value is 10000,  so you can not treat 7900 as sale value. because tax invoice has been raised for 10000. you will have to pay full vat amt. 1111

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