c7831887

 Profile Answers by c7831887 

• May 21st, 2009

 

How to caluclate VAT?

Basic price of selling product (Landed cost of purchased goods + Manufacturing cost & other costs + Margin = Basic price)Add: Excise duty (if applicable & rate of duty will differ for each & every commodity))Add both these amounts and on this the VAT will be levied, will differ each & every commodity)Eg.: If 1kg of Plastic raw material's landed cost is Rs.50/- and convertion cost to plastic container is Rs20/- (Electricity, Wages, Administrative expenses & Margin is Rs.14/-)The Basic price of 1 Kg Plastic container is Rs.84/-Excise duty on Basic (Rs.84/-) @ 16% =  Rs.13.44VAT @ 8% on (Basic Rs.84+ Excise 13.44) Rs.97.44 = Rs.7.795 Say Rs.7.80/-  Accounting of VAT If 1 Kg of Plastic raw material purchased @ Rs.50/- which includes VAT @ 3% = Rs.1.50You can take credit of the VAT input (as in Excise duty): The accounting entry would be:  Purchase A/c (Raw materials) Dr 48.50     VAT payable A/c Dr. 1.50 (Contra-1)     To Supplier's A/c   50.00   (Being the raw materials purchased, acctd)               After sales, when we make payment to Govt, the entry would be           Party's A/c Dr. 105.24       To Basic sales of containers   84     To Excise duty payable A/c   13.44     To VAT payable A/c   7.8 (Contra-2)         VAT payable A/c Dr. 7.8   (Contra-2)   To VAT payable A/c Dr.   1.5 (Contra-1)   To Bank A/c   6.3   (Being the VAT payable adjusted and difference paid to Dept.)    Filing return of VAT As per Form  Credit availed on inputs VAT Payable Difference paid to Govt. (Purchases) (Sales)     (A) (B) ( C = (B - A) )         Rs.1.50 Rs.7.80 Rs.6.30    I don’t know the tentative date of filing VAT in other States of India.  But in Tamilnadu, before 20th of every month.