Consumption variant

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Querist : Anonymous (Querist)

28 November 2011 how is it possible to misuse the consumption variant method of dep in case of vat

Amit J. Hemani

Amit J. Hemani (Expert)
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28 November 2011 In case in consumption variant depreciation on capital asset can be claimed on balance amount of asset after claiming VAT Input on it. The misuse of this method is only that we claim depreciation on full amount and also taken VAT Input while paying VAT.
e.g.:
Say Machinery purchase net Rs.15,00,000
VAT @ 4% Rs. 60,000
Total Rs.15,60,000
If we used consumption variant than we can claim depreciation on Rs.15 lacs and balance amount of Rs.60,000 can claimed as Input Credit.