Hey.... We run a small provision store.... and like any other store.... we have a lot of old stock dumped in the godown..!!
Now I wan to throw it all away.... So the entry in my books would be:
Debit - P&L
Credit - Respective Stock
But I'm confused regarding the VAT implication on the same....
So my Question is, Do we need to deposit VAT on the goods thrown away..??
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Vat on goods thrown away
Replies (7)
VAT can be Deposited only when it is collected ..
In the Instant case the obsolete stock is not sold and hence the VAT is not colllected and so cannot be deposited .
Your treatment of Debiting the Profit and Loss A/c for goods thrown away is Correct .
Ok..
But VAT is required to be deposited in case of self consumption.... Would'nt the case be same here..??
| Originally posted by : Harshal | ||
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VAT can be Deposited only when it is collected .. In the Instant case the obsolete stock is not sold and hence the VAT is not colllected and so cannot be deposited . Your treatment of Debiting the Profit and Loss A/c for goods thrown away is Correct . Ok.. |
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Dear Sanchit , you have not consumed the goods .
You have thrown the goods away
So , no VAT to be colected and deposited .
Ok ...
VAT is applicable only there is any value addition at the time of sale. If you are not making any sale , VAT is not applicable.
hello everybody, i would like to add main point that no vat liability is there as there is no sales, but he has to revert the input tax credit taken for the goods which is not sold but disposed by way other than sales
I strongly agree with Mr. Harshal
Input Tax reversal is applicable only for exempted goods and goods send out side the state by way of stock transfer. Here nothing barring you to take the credit. No need for reversal of duty like Central Excise Law.
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