1. When Goods are bought and you have to pay both purchase value and VAT input or paid both, at that time, following journal entry will be passed.
Purchase Account Dr. (Value of Purchase)
VAT Input Account Dr. ( VAT on Purchase)
Cash or Bank or Name of Creditor Account Cr. (Value of Purchase + VAT input)
When Goods are Sold and you have to receive both Sale Value and VAT Output or received both, at that time, following journal entry will be passed
Cash or Bank or Name of Customer Account Dr. (Value of Purchase + VAT output)
Sale Account Cr. (Value of Sale)
VAT Output Account Cr. (VAT on Sale)
When We pay the *** VAT (Payable) to Government. At that time, following journal entry will be passed.
*** VAT Payable Account Dr. ( Excess of VAT Output over VAT Input)
Bank Account Cr.