A fixed asset is bought for 100000 & vat is 12%.
State law says 50% cenvat is available for CY and balance over the next two years.
Entry passed is:
Fixed asset 100000
vat 12000
To Bank/Vendor 112000
What accounting entries are to be passed for
1. recording vat in CY for cenvat credit and
2. C/f balance vat for following 2 years.
(Q. is not state specific - for general understanding only).
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Vat treatment on fa
Replies (1)
Hi,
Record it as "VAT credit" in d above entry and group it under asset...
at d end of 1st year wen u want to utilise 50 %, record it as,
VAT paid a/c (expense group) dr 50%
to VAT credit A/c(Asset group) 50%
so at the end of the year unused VAT credit stays as an asset which u can utilise passing the same entry...
Correct if dat view was incorrect...
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