Vat input credit on capital goods

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Iam working in a service based company which purchases two computers (office use - capital goods) for 1,00,000/- with VAT 4000/- (4%). How can I treat this in accounts. Iam not able to claim this as input credit.

Replies (27)

Mr.Natarajan, you have to capitalise the full value including VAT in the books of accounts

Hi Natarajan

  Is your comapany registred under VAT?

if yes you can claim the vat paid on capital goods as input credit and adjust against the vat payable.

if no then you can capitalize it.

Bhanu, Thanks, yes we got registered with VAT and as we a service based company, no payable is here to set-off the Input credit. And is there any provision in accounts (as per accounting standered) to capitalise the VAT input?

you have to capitalised only cost of computers.no need to cpitalised the input credit..

U have to capitalise .

 

100000 is to be capitalised.........

Capitize  all amount inclding VAT

Capitalise full value including VAT but VAT paid on such, though it is capital goods, computers cannot be set off against any VAT out put tax payable.

 

rengaraj r.k

you should capitalize full value of cmputers including vat . you can't claim for input credit.

 You can't claim for input credit of computers

 

Input Vat can be claimed on assets that can be used in the process of production. Since you are using the computer for office purpose, you cannot claim Input Vat on the purchase of computer. The Vat amount is to be added to the cost of asset.

the defination of Input credit for Capital Goods only Plant and Machiery can take input creidt. computers not eligible for ITC.

 

Capitalize whole value including VAT and claim Depreciation at the end....

Capitalised full value including vat, only manufacturer has claim the input vat on capital goods  No input credit taken in service based company.


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