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https://help.tallysolutions.com/docs/te9rel51/Tax_International/Botswana/Tax_Credit_Pur_2nd_hand_Goods.htm

Tax Credit for Purchase of Second-Hand Goods

On purchase of second-hand goods, tax credit can be claimed only to the extent of the input tax fraction = 12/112*Gross amount. The entry for claiming tax credit on purchase of second-hand goods must be recorded in a credit note.

Credit Note

Go to Gateway of Tally > Accounting Vouchers > Ctrl + F8: Credit Note

  1. Select Tax Credit for Purchase of Second–hand Goods in the Used for field.

  2. Credit the party ledger and provide the bill reference.

  3. Debit Purchase Ledger with VAT/tax class - Purchases @ 12%. On purchase of stock item, select the stock item, enter the quantity and rate.

  4. Debit the Input VAT ledger with the VAT/Tax class - Input VAT @ 12%.

  5. The VAT/Tax Class appears as Input VAT @ 12%. In case the VAT/Tax Class is not defined in the master, the appropriate classification can be selected from the VAT/Tax Class list.

  6. In the VAT Details screen enter the Assessable value of purchase.

  1. Enter the amount as 535.72 (i.e. 5,000*12/112) tax amount in Debit field.

  2. Enter the details in the Narration field, if required.

  1. Press Y or Enter to accept and save.

Note: The Debit value entered for Input VAT ledger predefined with VAT/Tax class - Purchases @ 12% in credit note by selecting Tax Credit for Purchase of Second-Hand Goods in the Used for field is captured in box 14.

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