Saturday, April 28, 2012

VAT classification


It is a list of vat rates, which describes the nature of the business activity and  type pf transaction. These are in-built in the system and will be updated if and when any statutory changes take place. Some of the classifications are :

Input vat @ 4%
Input vat @ 1%
Input vat @ 12.5%
Output vat@ 1%
Output vat @ 4%
Output vat @ 12.5%
Purchases – capital goods
Purchases – exempt
Purchase – unregistered dealers

Depending on the type of the business, type of transaction, and the statutory requirements of your state, you will need to select the appropriate classifications from the list during ledger creations, voucher entries, etc.

The sales and purchase transactions are segregated based upon the classification selected during voucher entry and shown in the vat computation. Thus you can see in the vat computation, the classification – wise vat and net values.

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