Treatment of custome duty

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GAURAV SATIZA

GAURAV SATIZA (Querist)
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29 November 2013 is custome duty part of cost or not?????
mean we will add duty in cost of purchase or not????

Hitendra Jain

Hitendra Jain (Expert)
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29 November 2013 Any expenditure which incurred for making the goods to be able for sale or for making the fixed assets to fit for put to use included in cost of good or assets subject to:

without incurring that expenditure the goods can not be sale / asset can not be put to use.

That expenditure shall not re-imburse in any form resulting prevent or reduction in any expense or generating cash flow to the entity.

Custom, Excise, VAT etc. are indirect taxes and relevant tax laws provides their credit for payment.

In case of Custom and Excise CENVAT / MODVAT is available and in case of VAT Input Tax Rebate is available.

Hence if the custom duty paid by you will be claimed as CENVAT Credit then It will not added in cost else the cost will include said duty.