VAT on Fixed Assets

This query is : Resolved

Rajesh Dobriyal (Querist)
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12 July 2010 If we are capitalizing VAT on fixed assets then what is the treatment in VAT return for the same.
How can we account for the same.

CA Kamal Gangaramani

CA Kamal Gangaramani (Expert)
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12 July 2010 Capitalise only net amount of asset, donot capitalise VAT amount.

In Vat return include value of fixed asset as purchase. Include value in statement of purchase/register.

As you will capitalise only net amount pass journal entry debiting net amount to fixed asset account and crediting net amount to purchase account(respective coloum in purchase register)