Where You are as a position of billing officer, regularly we have to prepare bill as per Govt. rules.
Let’s starts, how we are deducted VDS & TDS from party’s bill, we will try to better understanding you by following four practical examples…
Situation 01.
Say for example, MR –X rahman is your supplier submitted a bill about tk.5,50,000.00 as a procurement supply but he has no attached any VAT challan including the bill .Noted that ,there is no any approved agreement our company management with the party that indicates AIT will not be bear by us. But also it is clear mentioned that VAT & AIT will be bear by the respective party. In this situation how we prepare the party bill? What is the AIT & VDS deduction from the party & how the amount after deducting said bill we should pay the party ?
1st step:-VAT & AIT deduction:-
Bill amount =TK.5, 50,000.00
Less: VAT (if 10%) (5, 50,000.00/110)*100*.10 =TK.50, 000.00
Remaining balance (5, 50,000.00-50,000.00) = TK.5, 00,000.00
Less: AIT (if 10%) (5, 00,000.00*.10) =TK.50, 000.00
Party payment Remaining balance (5, 50,000.00-50,000.00-50,000.00) = TK.4, 50, 0000.00
Journal Entry has gone to …
Procurement supply expense debit= tk.5, 50,000.00
Parties VAT credit =tk.50, 000.00
Parties AIT credit= tk.50, 000.00
MR –X rahman (Party) credit = tk.4, 50,000.00
Situation 02.
Say for example, MR –X rahman your supplier submit a bill before you about tk.5,50,0000.00 as a procurement supply but he has attached VAT challan including the bill .Noted that ,there is an approve agreement our company management with the party that indicates, AIT will be deducted as per govt. rules. In this situation how we prepare the party bill? What is the AIT & VDS deduction from the party & how the amount after deducting said bill we should pay?
1st step:-VAT & AIT deduction:-
Bill amount =TK.5, 50,000.00
Less: AIT (if 10%) (5, 50, 0000.00/110)*100*.10) =TK.50, 000.00
Remaining balance (5, 50,000.00-50,000.00) = TK.5, 00,000.00
Party payment Remaining balance (5, 50,000.00-50,000.00) = TK.500, 000.00
Journal Entry has gone to
Procurement supply expense debit =Tk.5, 50,000.00
AIT credit= tk.50, 000.00
MR –X rahman (Party) credit = Tk.5, 00,000.00
Situation 03
Say for example, MR –X rahman your supplier submit a bill before you about tk.5,50,000.00 as a procurement supply but he has no attached VAT challan including the bill .Noted that ,there is an approve agreement our company management with the party that indicates AIT &VAT will be bear by us. But also it is clear that VAT & AIT will be deducted as per govt. rules. In this situation how we prepare the party bill? What is the AIT & VDS deduction from the party & how the amount after deducting said bill we should pay?
1st step:-VAT & AIT deduction:-
Bill amount =TK.5, 50,000.00
Add: VAT (if 10%) (5, 50, 0000*.10) =TK.55, 000.00
Total (5, 50,000.00+55,000.00) = TK.6, 05,000.00
Add: AIT (if 10%) (5, 50, 0000.00*.10) =TK.55, 000.00
Total (550000.00+55000.00+55000.00) = TK.6, 60,000.00
Party payment will be = TK.5, 50, 0000.00
Journal Entry has gone to ..
Procurement supply expense debit = Tk.6, 60,000.00
VAT credit = tk.55, 000.00
AIT credit = tk.55 000.00
MR, X rahman (Party) credit = tk.5, 50,000.00
Situation 04.
Say for example, MR –X rahman your supplier submit a bill before you about tk.5,50,000.00 as a procurement supply but he has no attached VAT challan including the bill .Noted that ,there is an approve agreement our company management with the party that indicates VAT will be bear by us. But also it is clear mention that AIT will be deducted as per govt. rules. In this situation how we prepare the party bill? What is the AIT & VDS deduction from the party & how the amount after deducting said bill we should pay?
1st step:-VAT & AIT deduction:-
Bill amount =TK.5, 50,000.00
Less: AIT (if 10%) (5, 50, 0000*.10) =TK.55, 000.00
Remaining balance (5, 50,000.00-55,000.00) = TK.4, 95,000.00
Add: VAT (if 10%) (5,50,0000*.10) =TK.55, 000.00
Party payment will be(5,50,000.00-55,000.00) = TK.4,95,0000.00
Journal Entry has gone to…
Procurement supply expense debit =tk.6,05,000.00
AIT credit = tk.55, 000.00
VAT credit = tk.55 000.00
MR, X rahman (Party) credit = tk.4, 95, 0000.00
“Rules for AIT VAT adjustment where is Slab wise bill applicable: - “
Say for example, MR –X rahman your supplier submitted a current bill,
In July 2019 = TK.5, 00,000.00
In Dec-2019= TK.5, 00,000.00
In June-2020 = TK.4, 00,000.00
In July-2020 = TK.3, 00,000.00
Total bill submit(5,00,000.00+5,00,000.00+4,00,000.00+3,00,000.00) =17,00,000.00
AIT & VAT calculation
|
From |
up to |
AIT% |
VAT% |
Bill Amount |
AIT |
VAT |
Total |
Remarks |
|
0 |
14,00,000 |
2% |
2% |
14,00,000 |
28,000 |
28,000 |
56,000 |
Previous Adjustment |
|
15,00,000 |
50,00,000 |
3% |
3% |
17,00,000 |
51,000 |
51,000 |
1,02,000 |
Current |
Now we adjusted the bill...
Current deduction amount=Tk.1, 02,000.00
Less previous adjusted= tk.56, 000.00
Remaining balance (1, 02,000.00-56,000.00) =Tk.46, 000.000
Now TK. 46,000.00 deducted from the bill in July-2020
Bill Amount was =tk.3, 00,000.00
Less: (AIT+VAT) (1, 02,000.00-56,000.00) (previous) Tk. =46000.00
Party payment will be Net balance (3, 00,000.00-46,000.000) =TK.2, 54,000.00
Journal Entry has gone to…
Procurement supply expense debit tk.17, 00,000.00
AIT credit = tk.79, 000.00
VAT credit = tk.79 000.00
MR, X rahman (Party) credit = Tk.15, 98,000.00