VAT Payable

VAT Payable is the liability ledger, number 2261 under Duties and Taxes, where every Sales Invoice credits the VAT it collected. The balance is money held on behalf of the IRD, not income, and it rises with each sale and falls when you remit or when input VAT is set off against it. Credit notes debit it back. In the demo books the account shows Rs 4,160 outstanding after collecting Rs 8,320 and remitting Rs 4,160. Reading its ledger for one Nepali month gives the output VAT figure of the VAT Return, and the two must agree before filing. The Finance Act 2083 fee templates also point at this account, so split them out when reading it.

VAT Payable balance = Output VAT collected - Input VAT set off - VAT remitted to the IRD.

1. 01Go to Accounts Setup > Chart of Accounts, expand Liabilities > Current Liabilities > Duties and Taxes and open VAT Payable.
2. 02Click View Ledger; each Sales Invoice shows as a credit, each remittance as a debit.
3. 03Filter the ledger to the Nepali month and compare the credit total with Nepal IRD > VAT Return.
4. 04To record the remittance, go to Invoicing > Journal Entry > New, debit VAT Payable and credit the bank.
5. 05Submit. The entry above posts and the balance falls by the amount paid.

Sales Invoices credit it; the monthly remittance Journal Entry debits it against Bank.

Balance Rs 4,160 after collecting Rs 8,320 and remitting Rs 4,160.