Our client is in business of freight forwarding and is registered with IATA/FIATA for air freight and with DGFT for sea frieght. They have 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 clients:
Export consolidation air and sea Pre-shipping documentation Inland transportation Custom clearance Post-shipping documentation Port/Airport to door delivery Pre-import consultancy to new projects and approvals Inland transportation Custom clearance Consolidation air/sea Port/Airport to door delivery
Our query was re: accounting of revenue by freight forwarders. Should the P/L a/c reflect the turnover gross of freight, local airport/port charges, transport charges charged by the company to its clients? Or should we only reflect only their service charges and profit made on recoveries of freight/local transport etc.
Kindly advise w.r.t AS-9 and the usual practice followed in India.
In my opinion, in case the Client is a Corporate Entity, then the Gross Revenues have to be shown. In any case, a Schedule should be annexed aloingwith the Annual Accounts rawn up for the purposes of showing the gross revenues and the expenses component in the same. This is more so since the TDS is going to be deducted on the Gross Amounts by the Clients and then the Figures as per the Profit & Loss Account and As Per the TDS Certificates would not tally inviting sure selection for Income Tax Scrutiny.
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