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My question is why we debit the input tax, and cradit the
output tax. wt is the logic and wt is the principal behind
it
adil khan( CA STUDENT)
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Answer / abhisek
because for input tax we have already paid and for which we
will be getting credit so it is our asset thats why we debit
it and vise versa....
| Is This Answer Correct ? | 5 Yes | 3 No |
Answer / nitin
when u r selling sumthing , u you are liable to pay tax to
the govt(vat,cenvat)...this tax being a liability , you
credit it...
but you also pay this tax when you purchase somthing as the
seller will add his own tax liability to the cost of the
product...tax is levied on you indirectly...since you have
now already paid the tax it becomes an asset...
asset-liability = tax payable/refund
| Is This Answer Correct ? | 2 Yes | 1 No |
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