Hellooo Caclubindia,
pls let me know in detail the entire process to book an import purchase in the books with respect exchange rate, duties payable & foreign exchange loss/profit .
Best regards
navin.
3 Replies
Ganeshbabu K
(Audit and Tax Advisory)
(48564 Points)
Replied 20 March 2013
Import purchases
exchage rate = bill of entry custom exchange rate
date of booking may be bill of entry date / MRN date/inv date as the case may be
it all depends on your purchase terms(Wheher it is ex-works, or FOB, CIF)
what ever it is
transaction of import should be recognised when all risks and rewards of ownership transfered to company
Ganeshbabu K
(Audit and Tax Advisory)
(48564 Points)
Replied 20 March 2013
and the difference between the exchange rate as at the date of the transaction and as at the date of settlement thereof should be recognised as income or expense, depending on the nature of the item to which the exchange difference(s) pertain, as per the requirements of AS 11,
Note:
if purchases is asset it should be adjusted to cost of asset as per AS11 and should not treat fluctuation as income or expence
Ganeshbabu K
(Audit and Tax Advisory)
(48564 Points)
Replied 21 March 2013
In general RBI exchange rates will be used for forex fluctuation entries
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