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Vat journal entry

SAMBIT KUMAR PANI (Student CA Final ) (42 Points)

05 September 2013

Dear Sir,

Can any one tell me that ,what is the journal entry of following transactions?

1) when taking an inputtax credit?

2)When liabilty of output tax arises?

3)when we set-off output tax against ITC?

4)When we adjust the ITC against CST ?

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5 Replies

Rajesh Kumar Loya (student) (177 Points)
Replied 06 September 2013

Dear Sambit,

1) VAT Input A/c............Dr

To Creditor A/c

2) Debtor A/c...........Dr

To VAT Output A/c

3) VAT Output A/c....Dr

To VAT Input A/c

4) CST A/c.........Dr (other than 2%)

To VAT Input A/c

B.SEKAR (manager-accts.) (61 Points)
Replied 06 September 2013

Dear sir, Mr. Rajesh kumar entry is perfect. do it accoardingly>>.......sekar

Subramanya (Tax Consultant) (523 Points)
Replied 10 September 2013

Originally posted by : SAMBIT KUMAR PANI
	Dear Sir, Can any one tell me that ,what is the journal entry of following transactions? 1) when taking an inputtax credit? 2)When liabilty of output tax arises? 3)when we set-off output tax against ITC? 4)When we adjust the ITC against CST ?

1. While recording local purchase you can pass

Dr Purchases A/c

Dr Input VAT A/c

Cr Creditor A/c

2. While recording local sales you can pass

Dr Debtor A/c

Cr Sales A/c

Cr Output VAT A/c

3. While adjusting Output vat against Input vat (incase of VAT payable)

Dr Output VAT A/c

Cr Input VAT A/c

Cr VAT payable A/c

4. While adjusting ITC against CST (incase of excess input tax credit available)

Dr CST A/c

Cr Input VAT A/c

Hope this will help you..

With regards,

Subramanya

jitu (ACCOUNT ASSISTANT ) (109 Points)
Replied 11 February 2015

Dear Subramanya sir,

what entry wil be passed (for vat adjustment) in case when INPUT is higher than OUT PUT VAT

FOR EXAMPLE:-

INPUT VAT 16500

OUTPUT VAT 14620

Subramanya (Tax Consultant) (523 Points)
Replied 19 February 2015

Hi Jitu,

Incase of excess Input credit available during a return period, you need to pass an adjustement entry to the extent of Output VAT available.

In your case, Pass a normal journal adjustement entry as given below :

Dr Output VAT 14620
Cr Input VAT 14620

Once above entry is passed, the difference amount (16500 - 14620) will remain available in Input vat ledger and will show as Carried forward to next period.

Please check and revert incase of any clarification.

With regards,
Subramanya