Dear All,
I would like ask that if vendor get trade discount on rate difference from seller then what entry should be journlised for vat paid on this trade discount 5% suppose the difference was 100000+5%=105000 this 5000 amount paid to sale tax department how this will adjust with proper all necessory entries please help wainting for solution
Thanks in advance
Amit kumar
Hi Amit, whats meaning of vendor get trade discount on rate difference from seller.
You are saying vendor and seller. Vendor and seller are both same. what means of you.
I mean to say that suppose we purchase goods from party on rate @ 1500+5%=1575 and after some time they issue a credit note for rate difference we get 15+5%=18 total but in this CN they mention vat 3 ruppe which liable to pay sales tax deaprtment vat payment we paid it to concern department but one thing is which is main how will this transaction will adjust please give me complete solution if possible
Thanks in Advance
Amit Kumar
on purchase, you know below entry will be pased:-
| Purchase A/c | Dr | 1500 | |
| VAT input A/c | Dr | 75 | |
| To Trade Creditor | 1575 |
and on receiving the credit note, as you know you will pass the following entry:-
| Trade Creditor A/c | Dr | 18 | |
| To Purchase | 15 | ||
| To VAT input | 3 |
Then now you are saying that 3 has been deposited to concerned department. Then now what problem here.
As you have paid 3 to department, then now you are remain eligible to claim the VAT input for 75.
So now your purchase amount will be reduced by 15. and supplier balance will also reduced by 18.
I hope your query is sloved out.
CAclubindia
