28 November 2011
In case in consumption variant depreciation on capital asset can be claimed on balance amount of asset after claiming VAT Input on it. The misuse of this method is only that we claim depreciation on full amount and also taken VAT Input while paying VAT. e.g.: Say Machinery purchase net Rs.15,00,000 VAT @ 4% Rs. 60,000 Total Rs.15,60,000 If we used consumption variant than we can claim depreciation on Rs.15 lacs and balance amount of Rs.60,000 can claimed as Input Credit.
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