3 Replies Latest reply: May 11, 2012 9:20 AM by Yaduveer Singh RSS

VAT Tax Entry in Accounting

Sridhar Madiraju
Currently Being Moderated

Dear Gurus,

 

Could you please let me know,

 

whether the Tax entries will appear during payments (Vendor/Customer)?

Tax is applicable only for invoice or for payments also?

 

 

My question is for  Vendor Invoice we have the entries like below

 

    Inventory A/c               Dr (900)

    VAT receivable A/C      Dr (100)

    Vendor  A/C                         Cr (1000)

 

 

Similarly  for  Customer Invoice

 

  Sales A/C                  Cr (900)

  VAT Payables A/C      Cr (100)

  Customer A/C                        Dr (1000)

 

So, during payment how the entries would be?

 

case-1: Vendor Payment

 

   Bank A/c      Cr (1000)

   Vendor A/c   Dr (1000)

 

Case-2:

  

   Bank A/c             Dr (1000)

   Customer A/C      Cr (1000)

 

 

Is this how the entries will come or some other?

 

Please let me know

 

Regards,

Sridhar.

  • Re: VAT Tax Entry in Accounting
    ManiKumar Yandrapu
    Currently Being Moderated

    Hi Sridhar,

     

    whether the Tax entries will appear during payments (Vendor/Customer)?

    Tax is applicable only for invoice or for payments also?

     

    There is no tax entry will applicable during the payment entry ( Applicable for AR & AP) for Indian Scenario. Country wise it may change. One of my previous Mexico project ,VAT applicable on down payments also for Both cases.

     

    For Indian standard entries are correct.

     

    Rgds

    Mani

  • Re: VAT Tax Entry in Accounting
    Ramakrishna Ailanani
    Currently Being Moderated

    Hello Sridhar,

     

    At the time of invoice you have already posted to Payable account, again at the time of payment why tax will be deducted, if we deduct, then you are deducting tax two time for single transactions.

     

    For indian scenario, for vendors below are the entries

    MIGO: Stock A/c     Dr   

              GR/IR A/c     Cr

    Posting Excise Invoice

              RG23A A/c               Dr

              Excise payable A/c   Cr

    Vendor Invoice

              Vendor A/c       Cr

              GR/IR A/c         Dr

              Excise Payable Dr

     

    Same in case of Sales, instead of excise payable, it will go to Excise Paid account at the time of customer Invoice.

     

    Thanks and Regards

    A.Rama Krishna

     

     

    Regards

    A.Rama Krishna

  • Re: VAT Tax Entry in Accounting
    Yaduveer Singh
    Currently Being Moderated

    In simple words...your entries are absolutely correct for VAT.

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