Forex gain & loss

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Querist : Anonymous

Querist : Anonymous (Querist)

06 January 2014 How to calculate foreign gain / loss in case of import purchase? Difference between exchange rates on the date of payment and on the date of purchase invoice to be taken or Difference between exchange rates on the date of payment and on the date of material received in factory should be considered?? Plz Reply..

P V Ram

P V Ram (Expert)
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06 January 2014 FX gain / loss is the difference between the rate as per Bill of Entry and the rate at which payment is made on the payment day

Thanks!

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Querist : Anonymous

Querist : Anonymous (Querist)

06 January 2014 Dear sir,

Thanks for your reply. but rate mentioned on the bill of entry is generally same for whole month. can i take rate on the date on which i receive material in my factory or the date on which i make payment of customs duty for calculation purpose?? Kindly reply based on your experience... as an auditor how should i verify the calculation made by auditee.

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P V Ram

P V Ram (Expert)
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06 January 2014 My reply holds good. Custom duty is also paid on the basis of BOE rate only.
There is no way you can treat the rate prevailing on the date of receipt of goods in your factory.

Thanks!

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Querist : Anonymous

Querist : Anonymous (Querist)

07 January 2014 thank you so much sir... Ur reply has enhanced my knowledge and it is highly appreciated. thanks again....