One of my client is a Menufacturer of Garments. He takes Vat credit of every bill raised to its name, for Eg. If he eats in a restaurant for the sake of Bussiness Promotion, and suppose the bill is for Rs. 1000 and the vat Element is Rs 120.. Then in his book he books the expense as ... Sales Promotion A/C ... Dr. 1000 Vat input Tax A/C ......Dr. 120 To Cash / Bank 1120
Sir is this correct? Can he book like this... Please reffer to some notification and Sections if possible.. thank You
16 February 2010
No. He is claiming wrong input,because the restaurant exps. are not the input for manufacturing of garments. Moreover, it is normally under negative list under Vat Laws.
CAclubindia
