Goods in transit query

This query is : Resolved

neetu sharma (Querist)
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25 July 2016 Dear Sir,

My query is for entry of goods in transit at the month end.It should be booked with total invoice amount or basic amount? Entry should be like this:
Goods in Transit Dr.
Bills Payable Cr.
Please correct me if I am wrong.

And also want to know what about Duties (Excise and Vat) credit.Can we take credit in that month or not.If not then we have to book the invoice with basic amount only.
There's a lot of confusion please reply urgently as I have to finalize my books for balance sheet.

Amol S Joglekar

Amol S Joglekar (Expert)
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25 July 2016 This basically depends upon the type of contract you have entered with your supplier....
If the transaction is complete at the door steps of your supplier then you can take the credit of taxes even though the goods are still in transit
On the other hand, if the transaction is complete at the receipt of goods at your door steps, then you can NOT take the credit of taxes...
(The credit of taxes can be taken for COMPLETED contracts...that is the key)