Aditya Gupta (Chartered Accountants) (37 Points)
21 March 2009whether vat refund taxable in income tax act???????????
Kindly support with judgements if any.......
deepak K Gujrati
(CA-practice)
(1077 Points)
Replied 21 March 2009
This does not require in any case law to understand. 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
Rajesh Kumar
(Advocate- Tax)
(7806 Points)
Replied 21 March 2009
Vipul is right. If the refund is earlier charged on expenses, it will be taxable; if not charged on expenses, it will not be taxable.
paresh
(consultant)
(25 Points)
Replied 22 March 2009
If previous year 2007-08 vat payable liabiltiy paid in current year (2008-09)without provision in earlier year (2007-08)allowed as expenses in 2008-09 under Income tax act
Regards
paresh
CAclubindia
