fiscal incentive
This query is : Resolved
15 November 2014
Hi
As per Punjab state's new fiscal incentive scheme, there will be a rebate on capital investment abobe 100 crs by way of:
1. CST exemption for 12years
2. Vat exemption for 12 years
3. Electricity Duty exemption for 12 years.
Question : 1. Will these exemptions be treated as capital subsidy as they are based on capital investment but dependent on revenue operations like sales, electricity consumption?
2. What will be the accounting treatment- These benefits should be reduced from asset value as per AS on fixed assets or treated as other income ?
As per Punjab state's new fiscal incentive scheme, there will be a rebate on capital investment abobe 100 crs by way of:
1. CST exemption for 12years
2. Vat exemption for 12 years
3. Electricity Duty exemption for 12 years.
Question : 1. Will these exemptions be treated as capital subsidy as they are based on capital investment but dependent on revenue operations like sales, electricity consumption?
2. What will be the accounting treatment- These benefits should be reduced from asset value as per AS on fixed assets or treated as other income ?
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