PLZ CAN ANY1 TELL ME WAT EXACTLY IS THE ADDITION METHOD OF VAT IAM NOT ABLE TO FIND OUT HOW IT OPERATES AND NO BOOK HAS DESCRIBED IT PROPERLY. PLZ SEND ME THE FULL DETAILS OF ADDITION METHOD OF VAT.
1 Replies
U S Sharma
(glidor@gmail.com)
(21063 Points)
Replied 05 January 2011
Purchase
purchase cost ........100
vat paid ......4%............4 ..................104
Sales
Sales Value ..........125
Vat charged @ 4%.....5 ...................130
Vat Liability now ...........5
credit taken ....................4
Cash paid VAT..............1
so the Vat paid in final value addition of 25/- (125-100) is 4% of 25/- i.e 1/-
Hope this will clear the doubt
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