01 May 2013
Good Morning everyone. I have a Query Regarding Live tax paid on purchase of vehicle. What is the Accounting treatment for the same , should it be capitalise or charged to revenue ?
Tax paid on purchase of vehicle should be capitalised.
In fact, any type of tax paid on purchase of fixed assets should be capitalised provided such tax is non refundable.
Para 9.1 of Accounting Standar 10, Accounting for Fixed Assets issued by the ICAI prescribed - The cost of an item of fixed asset comprises its purchase price, including import duties and other non-refundable taxes or levies and any directly attributable cost of bringing the asset to its working condition for its intended use; any trade discounts and rebates are deducted in arriving at the purchase.
CAclubindia
