rule 53 of mvat

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snadar (Querist)
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13 May 2009 I want to know how to calculate set off against rule 53 of mvat.

kindly also give me the formules for the same as soon as possible

C.A.Javid Patel

C.A.Javid Patel (Expert)
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13 May 2009 in rule 53 certain reduction to be made for setoff. There is no specific rule for reduction. You have to deduct 3 %. so your journal entry will be

if you have made purchase of Rs. 100 and vat is Rs. 12.5 which are eligible for reduction of 3% then your entry will be

1. purchase a/c 103 (100+ reduction of 3)
vat setoff 9.50
to creditor 112.5