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accounting of service tax refundable, Income Tax |
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accounting of service tax refundable |
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The company is an exporter and being an exporter Service tax, VAT etc are refundable to it. The company shows Service Tax / VAT refundable under current assets. The company has not received major portion of its refunds and huge amount has accumulated under the head service Tax / VAT refundable. Now the company wants to change the accounting ST / VAT. It will debit the expenses including service tax to its PL A/c. On receipt of refund the amount will be credited to income. Is it an allowable accounting policy? Can a company debit to PL A/c its refundable Service Tax / VAT to PL A/c and credit to PL A/c on receipt of refund. Pls. reply. Posts / Replies Showing Replies 1 to 2 of 2 Records Page: 1
No, it would violate the principles of accrual.
in opinion no because its current assets of the co. hence u can not charge it to P&L account if do so it will be disallowed by IT Refund from the dept is different issue. You must hv to show in current assets column Ramesh Kothari Page: 1 Old Query - New Comments are closed. |
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