03-24-2006, 11:02 PM
Ali,
I was also in the same understanding as you are. But last year, I completed an audit from Sales Tax department and the same case was applied there.
Sales Tax Special Procedure (in respect of Electricity); it was clearly mentioned therein that the Sales Tax on Transformers & Generators are not allowed to be claimed [b]but if they will use in direct production of the taxable goods they can be claimed.
On monday, I will give you the section quote for the same.
As far accounting treatment is concerned, the value of assets (whether Plant & Machinery or Equipment) will be recorded as net of General Sales Tax claimed, if any. On the other hand, if the GST was not claimed (due to any other reason) will be recorded on Gross Value (Value + GST)
Regards
I was also in the same understanding as you are. But last year, I completed an audit from Sales Tax department and the same case was applied there.
Sales Tax Special Procedure (in respect of Electricity); it was clearly mentioned therein that the Sales Tax on Transformers & Generators are not allowed to be claimed [b]but if they will use in direct production of the taxable goods they can be claimed.
On monday, I will give you the section quote for the same.
As far accounting treatment is concerned, the value of assets (whether Plant & Machinery or Equipment) will be recorded as net of General Sales Tax claimed, if any. On the other hand, if the GST was not claimed (due to any other reason) will be recorded on Gross Value (Value + GST)
Regards
