Input VAT

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

06 January 2010 I have a question on calculation of Gross profit and effect of VAT Input, can you guide me please with an example given below.

E.g.: Cost of a product Rs.400
VAT Input @12.5% i.e. Rs.50

Selling Price Rs. 480
VAT Output @12.5% i.e. Rs.60

Please explain how VAT Input of Rs.50 reflect or effect in the Trading & profit & Loss A/C and what is my Gross Profit ?

Thank you for responding Advance.

Regards,
Shashi

Vishnu Saboo

Vishnu Saboo (Expert)
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08 January 2010 as VAT input credit account would be your asset account as your Cenvat Credit account, if it's closing balance is Debit at the end of Month/Qtr/Year.
but if your payable amount is more than your input amount, then the excess payable would be your expense and shall be shown in Trading & P&L account.

Querist : Anonymous

Querist : Anonymous (Querist)

08 January 2010 Thank you very much sir

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