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Non-Deductible Input Tax (Kenya)

Where a registered person supplies both taxable and exempt supplies, he can deduct only the input tax attributable to the taxable supplies.

To record reversal of tax for non-deductible input

1.    Go to Gateway of Tally > Accounting Vouchers > F7: Journal.

2.    Click J: Stat Adjustment, to view the Stat Adjustment Details screen.

o     Select Reversal of Input Tax as Nature of adjustments.

o     Select the option Exempted Goods in the Additional Details field.

o      Press Enter to return to voucher screen.

3.    Debit expense ledger created for non-deductible tax expense and enter the amount in Debit column.

4.    Credit the VAT ledger (created under Duties & Taxes with the Type of duty/tax as VAT).

The journal voucher appears as shown below:

5.    Press Enter to accept and save.