Journal ebtry for vat input tax credit

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

17 June 2014 rm purchase-1000(20 kgs)
vat-4
other expenses-5

total-1009

journal entry

purchases dr 1009
party cr 1009

purchase cr 4
vat receivable dr 4

while recording consumption the avg rate (1009/20) ie 50.45 is used.

please let me know if the aforesaid journal entries are correct.Also let me know if the issue price(50.45) for consumption is right or wrong

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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17 June 2014 Raw material price will be considered only Rs.1005, as per AS-2, while doing valuation, refundable taxes will be deducted, here VAT is refundable ( adjustable with your output ) so valuation will be based Rs.1005/20, (assuming other expenses relevant to purchase)