VAT

INTRODUCTION OF VAT

VAT Stands for (Value Added Tax) and it is an example of indirect Tax, which applies to local (Domestic) Sales and purchases goods.
VAT rates are classified in the four categories (1%, 5%, 12.5%, 20%)

VAT RATES CATEGORIES

VAT Rates can be classified in the four categories (1%, 5%, 12.5%, 20%), which are described below.

Gold, Silver     1%

Bio-inputs like bio-fertilizers and micro-nutrients      5%

Kerosene stoves, lanterns (Oil lamp)  5%

Liquefied petroleum gas for domestic use (LPG) —Nil

Fertilisers, pesticides and other plant growth promoters—12.5%

Plastic and tin containers—12.5%

Household plastic items and other kitchen and bathroom items—12.5%

All kinds of metal items used in homes, offices, etc—12.5%

Paint brushes—12.5%

Wood, timber, ply, and laminates—12.5%

Tractor tires and tubes—12.5%

Wire mesh and metal mash—12.5%

Desi ghee—12.5%

Glucose D—12.5%

Locks—12.5%

Weights and measures—12.5%

Fiber and particle board made out of agricultural waste—12.5%

Cutlery (Crockery) items—12.5%

Mobile phones and accessories above rupees ten thousand—12.5%

Writing instruments above one thousand rupees per piece—12.5%

Ready-made garments above Rs 5000—12.5%

Kesar & dry fruits—12.5%

Diesel—20%

Soft drinks (Cold drinks)—20%

Watches over rupees five thousand—20%

VAT LEDGERS - TYPES

 Input VAT a/c: This VAT ledger applies only to “Purchase” transactions.

Output VAT a/c: This VAT ledger applies only to “Sales” transactions.

STEPS FOR VAT LEDGER

Ledger name: Sales 5% a/c

Group: Sales a/c

Used in VAT Return: Yes

VAT Ledger For Sales Voucher

Ledger name: Output VAT 5%

Group: Duties &Taxes

Types of Duty/Tax: VAT

VAT Sub Type: Output VAT

VAT/Text Class: Output VAT 5%

Purchase Ledger for VAT

Ledger name: Purchase 5% a/c

Group: Purchase a/c

Used in VAT Return: Yes

VAT Ledger For Purchase

Ledger name: Input VAT 5%

Group: Duties &Taxes

VAT/Text Class: Input VAT 5%

VOUCHER ENTRY

The VAT entries should be insert in "Account Invoice" mode in sales and purchase voucher and account invoice briefly mentioned as "Acct Invoice" in Sales and Purchase vouchers.  

SALES VOUCHER ENTRY FOR VAT

PURCHASE VOUCHER ENTRY FOR VAT

MULTIPLE VAT RATES

You can use multiple VAT ledgers with different types of stock items in single voucher entry, or choose VAT ledgers to select each rate at the time of voucher entry.

To perform this task, we have to follow these steps.

1.  Create a new company or open an already existing company.

2.  Click on “Accounting Vouchers”

3.  Press “F12” key and make ‘No” to the following statements.

Press F12: Configure and change the following settings:

    Use Common Ledger A/c for Item allocation – No.

    Allow selection of VAT/Tax class during entry – No

VAT COMPUTATION REPORT

1. Open an already existing company

2. Click on “Display”

3. Click on “Statutory Reports”

4. Click “VAT Classifications”

5. Click on “VAT Reports”

6. Click on “VAT Computation”