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Respect

Rethink

Reduce

Reuse

Recycle

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Q: What are the six rs called?
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Input Tax paid on purchases 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 of Tamil Nadu and VAT shown separately.Tax 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.EXAMPLE 1. (If goods are sold fully)Purchase T.O. Rs.10,000.00 + VAT@ 14.5% Rs.1450.00 = Rs.11,450.00Rs.10,000.00 + VAT@ 5% Rs. 500.00 = Rs.10,500.00Rs.10,000.00 + Exempt Rs. NIL = Rs.10,000.00Total Rs.30,000.00 Input Tax Credit Rs.1950.00 = Rs.31950.00Sales T.O. Rs.15,000.00 VAT @ 14.5% Rs.2175.00 = Rs.17,175.00Rs.11,000.00 VAT @ 5% Rs. 550.00 = Rs.11,550.00Rs.10,500.00 VAT @ 0% Rs. NIL = Rs.10,500.00Total Rs.36,500.00 Output Tax due Rs.2725.00 = Rs.39,225.00VAT Payable/Due to the Government Rs.2725 -- Rs.1950 = Rs. 775.00EXAMPLE 2. (If goods sold are partly)Purchase T.O. Rs.10,000.00 + VAT@ 14.5% Rs.1450.00 = Rs.11,450.00Rs.10,000.00 + VAT@ 5% Rs. 500.00 = Rs.10,500.00Rs.10,000.00 + Exempt Rs. NIL = Rs. NILTotal Rs.30,000.00 Input Tax Credit Rs.1950.00 = Rs.31950.00Sales T.O. Rs. 8,000.00 VAT @ 14.5% Rs.1160.00 = Rs. 9,160.00Rs. 4,000.00 VAT @ 5% Rs. 200.00 = Rs. 4,200.00Rs.10,500.00 VAT @ 0% Rs. NIL = Rs.10,500.55Total RS.22,500.00 Output Tax due Rs.1,360.00 = Rs.23,860.00Input Tax Credit carried forward to next month 1950 -- 1360 = Rs.590.00Reply From:ABHIVIRTHI Tax and Industrial ConsultancyR.R.JAGADEESANVAT PRACTITIONER AND INDUSTRIAL CONSULTANTH-63, Palaami Enclave, New Natham Road,Madurai-625014.Cell: 9994990599


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