Accounting of epcg benefit
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
27 February 2012
Dear Sir/Madam,
Under Export promotion capital goods scheme,scheme allows import of capital goods for pre production, production and post production at at 3.09% Customs duty as against the normal total of 27%, thus providing a duty saved value of more than 24% of the import value subject to an export obligation equivalent to 8 times of duty saved on capital goods imported under EPCG scheme to be fulfilled over a period of 8 years reckoned from the date of issuance.
Benefit is also available if asset is purchased from domestic supplier.
Though benefit is subject to recovery, it is not given by govt immediately.
What will be the treatment for benefit availed under it.
Whether benefit to be traeted separately or it will be considered as Govt grant.
If considered as Govt grant, it will be adjusted against cost of capital goods or booked as income under revenue grant?
Thanx & regds,
Megha
Under Export promotion capital goods scheme,scheme allows import of capital goods for pre production, production and post production at at 3.09% Customs duty as against the normal total of 27%, thus providing a duty saved value of more than 24% of the import value subject to an export obligation equivalent to 8 times of duty saved on capital goods imported under EPCG scheme to be fulfilled over a period of 8 years reckoned from the date of issuance.
Benefit is also available if asset is purchased from domestic supplier.
Though benefit is subject to recovery, it is not given by govt immediately.
What will be the treatment for benefit availed under it.
Whether benefit to be traeted separately or it will be considered as Govt grant.
If considered as Govt grant, it will be adjusted against cost of capital goods or booked as income under revenue grant?
Thanx & regds,
Megha
12 July 2023
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