This is a Case of Private Limited Company.
The Company is a construction company and has started the work on site last month. Since the Flats that shall be constructed shall be sold later, so their is no VAT liability on Output.
The company therefore shall pay Output Tax by taking 8-10 % margin over the Purchase made.
Now VAT Input a/c shall be opened in Current Assets (Duties & Taxes)
On Purchase
Purchase Dr
Vat input Dr
Cash/Bank/Creditor Cr
At the end of quarter Tax Payment shall be made
Transfer Input to VAT Payable
Vat Payable Dr
Vat Input Cr (with amount o/s in this a/c)
& the amount further paid being 8-9 % is also debited in Vat Payable which is also paid off
Vat Payable Dr
Bank/Cash Cr
My Question is where we will show this VAT Payable since logically its the part of my Purchase Cost
CAclubindia
