ravi (senior accountant) (507 Points)
28 April 2011Pvt. Co.- Pls suggest me whether 'net VAT' (input credit-output liability) is a business expenditure and has to be debited to p&l or not? or is adujusted in any thing else. Some say that net VAT is the customer paid amount, that we collect on behalf of customer and no way a business expense that can be claimable in the p&l account. pls suggest me. thanks for all the members
Devendra
(Chartered Accountant)
(4775 Points)
Replied 28 April 2011
IT IS DEBITED TO THE PROFIT AND LOSS A/C.
Pavan Bharadwaj
(Practicing Chartered Accountant)
(353 Points)
Replied 28 April 2011
It cant be debited to p&l A/c as you are not incurring any expense. You are just collecting from the customers and paying the same to government.
Arun A P
(Learning thro experience)
(64 Points)
Replied 29 April 2011
| Originally posted by : ravi | ||
 |
Pvt. Co.- Pls suggest me whether 'net VAT' (input credit-output liability) is a business expenditure and has to be debited to p&l or not? or is adujusted in any thing else. Some say that net VAT is the customer paid amount, that we collect on behalf of customer and no way a business expense that can be claimable in the p&l account. pls suggest me. thanks for all the members |
 |
It should not be debited to P&L Account as it is not your money.
To add further evidence, see the following ICAI link:
https://www.bcasonline.org/knowledge/Referencer/may.pdf
See the bottom of the 6th page,you will understand.
Hope you understand
Thanks & Regards
U S Sharma
(glidor@gmail.com)
(21056 Points)
Replied 29 April 2011
| Originally posted by : ravi | ||
|
|
Pvt. Co.- Pls suggest me whether 'net VAT' (input credit-output liability) is a business expenditure and has to be debited to p&l or not? or is adujusted in any thing else. Some say that net VAT is the customer paid amount, that we collect on behalf of customer and no way a business expense that can be claimable in the p&l account. pls suggest me. thanks for all the members |
|
if your sales are booked inclusive of VAT, then its expenditure ( indirect) in P/L account,
usually VAT is current asset account which get credited with purchase and cash deposit, and debited with sales.
Live class on PF & ESI Enrollment & Returns Filing(with recording)
CAclubindia
