Why is that RBI precibes different rate and CBEC a different rate for customs transaction and the difference of which if we accounted in RBI be taken to P&L?.... Why there cant be a singular rate?.. Why is that not possible
1 Replies
Ajit Hegde
(CA - Final)
(1367 Points)
Replied 27 December 2015
The purpose for which the rates are notified are different. RBI rates changes every day where as cbec notifies the rates twice in a month considering the avg of fluctuations. Accounting is done always on RBI rates at the time of remitence or payment. Cbec notification is purely for calculation of the invoice price and levy of customs duty there on. You account sales or purchase on basis of cbec rates which actually is the cost. While receiving or making payment party is debited or credited and the differential amount is taken to p and l. Hope it is clear
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