Visual Catpro
   
Reversal of ITC

A VAT Class Reversal of ITC is available under Purchase & Capital Goods. if you want to reverse any ITC mark this VAT Category with the relevant Purchase / Capital Goods A/c.

Entry should be passed as under: -

  
A/c Head
V.Class
Debit
Credit
Electrical Repairs A/c
Purchase VAT 12.5%
2000.00
 
Electrical Repairs A/c
Reversal of ITC
250.00
 
Party A/c
 
 
2250.00

In Form VAT-24, Purchase amount will be treated as 2000.00 and Tax on it will be shown as 250.00.

In Form VAT-15, Input VAT will be equals to 250.00 which shall be reduced by 250.00 at Sr. no. 4 (m) as Reversal of ITC.

Note:
In Form VAT-16, although Purchase will be shown as 2000.00, ITC will be treated as NIL.