Entry for vat input is disallowed in vat return

You should create a ledger  Vat EXPENSES under P&L Account then  pass  the following entry for this

one for transfer of input which has been disallowed .

Vat Input A/c Dr

 To VAt Out put A/c

Payment for liabilty entry ( Cash or Credit)

Vat Out put a/c Dr

 To Cash/bank or Vat Input

Transfer of vat input to Vat Expenses

Vat Expenses  Dr

  To Vat Input A/c