Hai,
Can I know what is the accounting treatment of VAT paid on inter state purchases?
Thanks in advance
4 Replies
Praveen Kachhawa
(Financial Accountant)
(225 Points)
Replied 18 May 2017
we can't claim vat/cst for input claim so vat paid on interstate purchase is a part of purchase.
(1)
Purchase a/c dr.
CST/VAT paid a/c dr.
To sundry Creditors
(2)
Purchase a/c dr.
To CST/VAT paid
You can also entered a single entry for that.
C.A Varsha Premachandran
(Practice)
(85 Points)
Replied 18 May 2017
so is the VAT paid is considered as cost of purchases?
Tejas N Vora
(Tax Consultant)
(296 Points)
Replied 18 May 2017
Hello Varsha,
First of all Please note that In Inter State Transactgions Tax Levy is known as CST and not VAT. Yes CST paid is considered as cost of purchase.
Praveen Kachhawa
(Financial Accountant)
(225 Points)
Replied 18 May 2017
Yes cst consider as part of purchase.
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