Whether refund of vat is treated as income in the income tax act
whether refund of vat taxable in IT Act
Aditya Gupta (Chartered Accountants) (37 Points)
21 March 2009
Aditya Gupta (Chartered Accountants) (37 Points)
21 March 2009Whether refund of vat is treated as income in the income tax act
Ankur Agrawal
(CS, CA Final)
(239 Points)
Replied 21 March 2009
sir i don't thinks so .....as VAT didn't allow as an expense....!
deepak K Gujrati
(CA-practice)
(966 Points)
Replied 22 March 2009
Whenever a purchase is made where VAT has been charged. Vat is debited to a seperate account i.e. Input tax credit a/c. If this amount is refunded it will just adjust the account.It has nothing to do with Expenses or income a/c.
Accounting Standard 2 issued by ICAI also requires that any tax if refundable should not be debited to purchase a/c.
Please suggest under what circumstances it will be debited in expense a/c
CA Sakshi
(CA Practice)
(309 Points)
Replied 22 March 2009
VAT refund will be taxable u/s 41(1) of IT Act, 1961. VAT composition tax is debited to P&L A/c. Otherwise VAT A/c separately maintained. VAT refund can be shown as Capital A/c adjustment like Income Tax refund.
shatrughan sinha
(professional)
(36 Points)
Replied 25 March 2009
| Originally posted by :deepak K Gujrati | ||
| " |
Dear Deepak Thats a good reply. We are also doing our accounts on the same basis.
thanks & regards
Shatrughan sinha |
" |
CAclubindia
