29 February 2016
we paid cash in the bank for E-payment of Mvat of sale tax assessment period 01.04.2012 to 31.03.2013. Tax - 1107/-, interest - 509/-, bank charges - 50/- how to record this entry in current year 2015-2016.
29 February 2016
The expenses pertains to previous periods and hence is an prior period expense. The MVAT though paid in the current year when the liability was quantified arose in 2012 - 13 and hence would be treated as a prior period expense. Interest on MVAT and Bank Charges can be charged directly to current year expenses and the tax paid should be shown as prior period expenses.
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