Sir/Madam
We purchased a vehicle and claimed ITC on this hence while calculating depreciation GST portion is excluded for income tax purpose
As per companies Act while calculating depreciation
Can I include gst portion to vehicle or exclude
Please advise
When you are Capitalising an Asset in the books of accounts, you are not including GST in the Cost of an asset , for example when purchase Asset you will pass following entry.
Vehicle A/c Dr
Input CGST A/c Dr
Input SGST A/c Dr
To Trade Creditors A/c Cr
( purchase of an Asset)
So Asset will be under Non Current Asset , and Input GST will be under Current Asset , So in this case you are going to Calculate Depreciation only on Cost of an asset excluding GST .
( As per IND16 we include only taxes that are non refundable in the Cost of an asset while Capitalising it)
Take more Opinion on this.
CAclubindia
