Dear friends,
My client is a licensed MTO, CHA and Freight Forwarding agent and is registered with DGFT for sea freight and with IATA and FIATA for air freight. It has a well connected worldwide network and an excellent relationship with major international airlines and shipping lines which enables them to provide a host of services to their clients.
For exporters:
Export consolidation air and sea
Pre-shipping documentation
Inland transportation
Custom clearance
Post-shipping documentation
Port/Airport to door delivery
For importers:
Pre-import consultancy to new projects and approvals
Inland transportation
Custom clearance
Consolidation air/sea
Port/Airport to door delivery
In this case the query is whether the turnover must be gross of the value of freight, local airport/port charge, local transport charges that it charges to its customers? In which case the costs incurred against these heads must be reflected separately to arrive at operating profit.
Or will it be acceptable to record only its service charges and the profit which it makes from the recovereies (by maintaining a separate control a/c ) from its clients/agents as it turnover? Kindly advise which will be the correct method of accounting as per the Indian Accounting standards alongwith referance to cluase. Would appreciate feedback from persons having clients in similar line of business.
Thanks and regards,
CAclubindia
