Credit
simpleParty A/c Dr. (inclusive of vat)sale A/c Cr. (exclusive of vat)Vat output Cr.
According to IFRS IAS #16:"The cost of an item of property, plant and equipment comprises:(a) its purchase price, including import duties and non-refundable purchasetaxes, after deducting trade discounts and rebates."If you are using the VAT input paid on equipment as a credit against the future VAT output received on sales, you would book the equipment cost net of VAT.
Deferred output tax is recorded by the seller for the sale of things on credit, and the standard output tax is recorded for the sale of things that were paid for with cash.
Vat payable is the amount of vat collected on behalf of the tax authority and payable to them. In other words vat payable is an output vat levied on organisation's customers through the organisation's sales invoices for onward remittance to the tax authority subsequently.
Credit
simpleParty A/c Dr. (inclusive of vat)sale A/c Cr. (exclusive of vat)Vat output Cr.
normal balance of output VAT
According to IFRS IAS #16:"The cost of an item of property, plant and equipment comprises:(a) its purchase price, including import duties and non-refundable purchasetaxes, after deducting trade discounts and rebates."If you are using the VAT input paid on equipment as a credit against the future VAT output received on sales, you would book the equipment cost net of VAT.
Deferred output tax is recorded by the seller for the sale of things on credit, and the standard output tax is recorded for the sale of things that were paid for with cash.
Buyer a/c dr. To Sales a/c. The GAAP shows such an entry as: Account Receivable (debit) $$$ Sales (Revenue) (credit) $$$ This is based on Double-Entry Accounting as standardized by the GAAP. For.buyer's a/c Dr. amount to sales a/c amount.Accounts-receivable@ Sales(sales being in your Results and accounts-receivable in your balance sheet.simple Party A/c Dr. (inclusive of vat) sale A/c Cr. (exclusive of vat) Vat output Cr.
VAT will have only four rates instead of large number of rats of Sales Tax, with off setting of tax on inputs against that on output; VAT does away with tax on tax. Claiming input tax credit under VAT ensures proper invoicing. Overall, these features of VAT encourage disclosure of complete information on business turnover.
debit Accounts receivablecredit sales revenueCredit VAT payable
The types of VAT........ 1 ) INPUT VAT @ 4 % 2 ) INPUT VAT @ 1 % 3 ) INPUT VAT @ 12.5 % 4 ) OUTPUT VAT @ 1 % 5 ) OUTPUT VAT @ 4 % 6 ) OUTPUT VAT @ 12.5 %
VAT that is charged by a business and paid by its customers is known as "output VAT" (that is, VAT on its output supplies). VAT that is paid by a business to other businesses on the supplies that it receives is known as "input VAT
Vat payable is the amount of vat collected on behalf of the tax authority and payable to them. In other words vat payable is an output vat levied on organisation's customers through the organisation's sales invoices for onward remittance to the tax authority subsequently.
Input Tax paid on purchases (i.e. output tax collected in the purchase bills) is called Input Tax Credit. Input Tax Credit available on all purchase bills should be arrived (including the Input Tax Credit to be adjusted if any during the previous month). Input Tax Credit is eligible only on the taxable purchases made (from the registered dealers with TIN in force) within the State and VAT shown separately. VAT payable on the taxable sales or deemed taxable sales is called Output Tax payable. The input tax paid on the taxable purchases as above should be deducted from the output tax payable and if the output tax payable is greater than input tax credit, the balance amount to be paid to Government is called Output Tax due/payable. If the Output tax payable is lesser than the Input Tax Credit, the excess amount is called Input Tax Credit available and the same will be carried forward to the next month. The Input Tax Credit carried forward to the next months will be adjusted in the ensuing months. Thus the VAT liability will be calculated only after applying the above procedure at the end of the calendar month and VAT liability arises on the first day of the ensuing month in case of running concern. Reply From: ABHIVIRTHI Tax and Industrial Consultancy R.R.JAGADEESAN VAT PRACTITIONER AND INDUSTRIAL CONSULTANT H-63, Palaami Enclave, New Natham Road Madurai-625014. Cell: 9994990599