Go Ad-Free on CAclubindia with Daily Mobile Updates. Subscribe Now!

Margin money from kvic whether capital or revenue receipt

Naresh Kotwani (Chartered Accountant) (40 Points)

25 January 2012

I would like to know whether margin money received from KVIC for availing of term loan from bank for purchase of plant and machinery and working capital before setting up a factory is capital or revenue receipt ??

Reply
Follow
Share

1 Replies

kanagaraj (CHARTERED ACCOUNTANT) (793 Points)
Replied 06 February 2012

I think you used the word margin money instead of Subsidy, if subsidy is received for P&M then the subsidy is capital nature and subsidy for WC is revenue nature. However, while working for depreciation the subsidy for P & M is to be reduced to that extent.