PURCHASES WITH IN THE STATE

This query is : Resolved

rajesh (Querist)
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19 September 2009 DEAR SIR/ MADAM

AN ASSESSEE PURCHASES FORM VAT DEALER AND THIS PURCHASES SOLD OUT OF STATE AND HE WAS COLLECTING 2% CST AT THE TIME OF SALES

AT THIS SITUATION HE IS BROUGHT FOR WARD VAT INPUT IN BALANCE SHEET AND CST PAYABLE TO GOVT SHOWN IN B.S.
OR
VAT DEBITED TO P&L AND CST PAYABLE TO GOVT SHOWN IN B.S.
OR
CST IS DEDUCTED IN VAT INPUT A/C
WHAT IS THE CORRECT METHOD. PLEASE TELL ITS VERY URGENT

THANKS IN ADVANCE

CA. O.P. Agarwalla

CA. O.P. Agarwalla (Expert)
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22 September 2009 I THINK LIKE OTHER STATES, IN YOUR STATE TOO, THE CST LIABLE IS ADJUSTABLE AGAINST VAT INPUT TAX CREDITS. IF IT IS SO, YOU SHOULD DEBIT THE CST AMOUNT TO CST LIABILITY A/C BY CREDITING I.T.C. A/C. THUS IN YOUR BALANCE SHEET THE NET FIGURES WILL APPEAR AS VAT INPUT TAX CREDIT.