How should I adjust input sales tax, output sales tax & payment of sales tax in Accounts?
Regards
7 Replies
K. CHITRA
(CHARTERED ACCOUNTANT)
(66 Points)
Replied 29 November 2011
Account as follows:
On purchases: Dr. Respective purchase a/c
Dr. Input Tax Credit a/c
Cr. Sundry Creditor a/c
On sales: Dr. Sundry Debtor a/c
Cr. Respective Sales a/c
Cr. VAT Collected a/c.
On month end: [for the amount input credit (or) vat collection, whichever is lower]
Dr. VAT Collected a/c
Cr. Input tax credit a/c
[if input credit is higher, this is to be c/f, if vat collection is higher, this is to be remitted]
Souvik Kumar Ghosh
(CA Final)
(1368 Points)
Replied 29 November 2011
How should i incorporate them in the financial statements?
Regards
K. CHITRA
(CHARTERED ACCOUNTANT)
(66 Points)
Replied 29 November 2011
VAT Input credit to be grouped under current assets.
VAT collection account to be grouped under "Duties & Taxes" - Current Liabilities.
In the month end, only one account will have the balance and that will automatically fall in the balance sheet, once you pass the necessary entries.
jituparmar89@gmail.com
(jituparmar89@gmail.com)
(94 Points)
Replied 29 November 2011
yes, i also agree with miss. k chitra...comments...
Souvik Kumar Ghosh
(CA Final)
(1368 Points)
Replied 01 December 2011
Are there any alternative methods?
Regards
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