Calculation of depreciation

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Querist : Anonymous

Querist : Anonymous (Querist)

19 March 2013 While calculating depreciation on fixed assets, is VAT taken into consideration?

Sumit Grover

Sumit Grover (Expert)
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19 March 2013 If the Input tax Credit on the same is taken under the relevant VAT Act, then it shall be excluded(i.e. not forming the part of the cost)........otherwise, if no Input Credit is taken, then it shall be included.

CA Dileep Surya Kumar

CA Dileep Surya Kumar (Expert)
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19 March 2013 If the credit is taken then exclude , if no capitalize the same and calculate the depreciation on total including VAT.

Dear Sumit in case of no input credit, the input tax will form part of cost of asset and will not be considered as expense.

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Sumit Grover

Sumit Grover (Expert)
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19 March 2013 Yes Mr Dilip....I Corrected the same......Me too noticed it after I posted the reply.