Hi All,
How to account for income from sale of scrap? Whether to show it as an adjustment against operating expenses or to treat it as an income. If income, Operating income or Other Income?
13 Replies
CA ADITYA SHARMA
(CA IN PRACTICE )
(16719 Points)
Replied 06 July 2011
IF SALE IS OF RAW MATERIAL THAN WILL BE DEDUCTED FROM COST OTHERVISE TO BE SHOWN AS INCOME IN P AND L AC.
DAYANANDA K N
(ACCOUNTS EXCECUTIVE)
(575 Points)
Replied 06 July 2011
It should be shown under other incomes
Regards
Dayananda
praveen
(Chartered Accountant)
(6971 Points)
Replied 06 July 2011
Depends on the materiality concept as well.
If it is more than 5% of the operating income you have to disclose it seperately in the schedules other wise merge with misc income.
valji
(Accounts manager-MBA)
(2150 Points)
Replied 06 July 2011
AGREE WITH MR PRAVIN DEPEND UPON MATERILITY IF AMT SHOWN HIGH THEN IT SHOWN AS SALE OF SCRAP OTHERWISE SHOWN AS MISC INCOME
Bhavana
(Chartered Accountant)
(74 Points)
Replied 02 April 2019
Sir,
Could you please give me an Accounting Standard reference for the same ?
CA Naveen Chand
(Chartered Accountant)
(12729 Points)
Replied 02 April 2019
other income >> sale of scrap
Ashutosh Jha
(Accountant)
(30 Points)
Replied 22 July 2021
WILL YOU PLEASE TELL ME THAT WHAT IS THE TREATMENT OF SALE OF FINISHED GOODS SCRAP IN ACCOUNT AND IN GST / INCOME TAX IN A TRADING COMPANY,
PLEASE
Rama chary Rachakonda
(Master in Accounts & Lawyer email ID:ramachary64@gmail.com voice no:9989324294)
(5138 Points)
Replied 22 July 2021
The term “Scrap” has not been defined in GST Laws. In GST regime, in order to be taxable, the waste and scrap does not have to pass the test of manufacture or mechanical process or marketability. It is admittedly as ‘supply’ in course of business.
While taxability of waste and scrap is no longer contentious, finding proper HSN (Harmonized System of Nomenclature) code is definitely a tedious task. The highest rate for scraps material is 18%. HSN code is a 6-digit code that categorizes 5000+ products. It is a uniform code which is accepted worldwide.
yasaswi gomes
(My grammar is 💯 good I)
(7290 Points)
Replied 23 July 2021
Scrap/Waste are goods whether manufactured or obtained otherwise. In our opinion, no service tax would be applicable on sale of such scrap. However, if there is any involvement of services, say payment of commission for selling of scrap, then, there would be an implication of service tax, accordingly.
yasaswi gomes
(My grammar is 💯 good I)
(7290 Points)
Replied 23 July 2021
The lower level dealers are not formalised and exempt from GST and the customers/ waste generators too don’t have a GST number so the large dealer has to not just pay higher tax rates on his own margin but also for the value he purchases the scrap at from all the links in the chain below.
Will India’s recycling sector collapse under the new GST regime? (downtoearth.org.in)
SOME ARE TAXABLE, SOME R NOT
Naman
(4 Points)
Replied 27 July 2023
Sir please explain why sales of scrap being added to revenue from operation while preparing statement of P/L?
Naman
(4 Points)
Replied 27 July 2023
Sir please explain why sales of scrap being added to revenue from operation while preparing statement of P/L?
Recent Topics
- Form 3CEAB
- Form 3CEAA and Form 3CEAB
- DIR 3 Web KYC
- Can i declare LTCG income as business income if I
- Stock entry in new software
- I have an EMI collection shop, what is its SAC cod
- Making payment once in quarter possible under QRMP
- Master File Documentation related
- Applicability of 44AD needs clarification
- ITC reversal in GST 3B
Related Threads
CAclubindia
