Treatment of Duty paid on Capital goods at Debonding
This query is : Open
17 June 2010
If we have capitalised some assets in F.Y.2008-09 which are purchased duty free.
Now in F.Y.2009-10, debonding took place and we have to pay customs as well as excise duty on all Capital goods which we had purchased duty free.
What will be the accounting effect of such duty paid at the time of Debonding?
Whether it should be capitalised or to be treated as Revenue Expenditure?
Now in F.Y.2009-10, debonding took place and we have to pay customs as well as excise duty on all Capital goods which we had purchased duty free.
What will be the accounting effect of such duty paid at the time of Debonding?
Whether it should be capitalised or to be treated as Revenue Expenditure?
17 June 2010
The duty paid at the time of debonding shall be capitalized. However, a note to the effect has to be given in the accounts to state that the additions during the year includes amount of duty capitalised due to debonding.
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17 June 2010
Thanks.
17 June 2010
Is there any documentary evidence to support this? If any, please give me the reference.
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