What is Vat?

Vat means Value Added Tax

Vat is a tax on Sale of Goods within State in India

 

 

What is Input Vat and Output Vat?

Vat on Purchase is called Input Vat

Vat on Sale is called Output Vat

 

What is Vat Payable?

Vat Payable=Output Vat-Input Vat

 

DOWNLOAD ASSIGNMENT

 


 

ANSWERS OF ASSIGNMENT 

 

Case 1

Suppose a dealer makes purchases and sales as follows

Purchase

                    A LTD
Purchase 40000
Vat 5% 2000
  42000

 

Sales

                  X LTD
Sale 60000
vat 5% 3000
  63000

What is

Input Vat

Output Vat

Vat payable?

View Answer

  

Case 2

  Suppose a dealer makes purchases and sales as follows

B LTD
Purchase 80000
Vat 12.5% 10000
  90000

 

Y LTD
Sale 60000
Vat 12.5% 7500
  67500

What is
Input Vat
Output Vat
Vat payable?

View Answer

 

What is Vat Credit 

If Input is more than Output,this is called Vat Credit

In case 2

Vat Credit=10000-7500=2500

 

This Vat credit is added to Input Vat of next period 

  

There can be either

Vat Payable

or

Vat Credit

 

In Case 1,there is Vat Payable

 but

in Case 2,there is Vat Credit

Case 3

Suppose there are 2 types of purchase and sales  

Purchases

A LTD   B LTD
Purchase 40000   Purchase 80000
Vat 5% 2000   Vat 12.5% 10000
  42000     90000

Sales

X LTD   Y LTD
Sale 60000   Sale 60000
vat 5% 3000   Vat 12.5% 7500
  63000     67500

What is

Input Vat
Output Vat
Vat payable?

View Answer
  1. Tax Practical
  2. Practical VAT CST
Ask Download

About the Author

CA Maninder Singh's photo - Expert in Practical Accounts, Taxation and Efiling
CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 8 years. He provides courses for Practical Accounts, Taxation and Efiling at teachoo.com .