10 September 2008
A manufacturing company buys some input item which is subject to VAT. A part of this input is used by the company in manufacturing a product which is not subject to VAT but to earlier Sales Tax. The company makes other products which are subject to VAT.
Now please provide your professional views on the manner in which the company shall compute the VAT credits that should be reversed for the product that is not under VAT. The company cannot do this on the basis of input/output ratio because that is complex and unascertainable.
CAclubindia
