Accounting of license for duty purchase import

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

13 September 2011 The company has received an license to purchase goods duty(Rs. 5,34,000) free .What entry is required to be pass initially. I need guidance for the following:-
1. Initial entry
2. Entry in case if license is sold.
3. Will sale tax be charged on sale of license?, If yes, will the same be disclosed under sale tax return?
4. Entries in the books of purchaser of such license.

Please advise.

CA Ankit Gulgulia (Jain)

CA Ankit Gulgulia (Jain) (Expert)

14 September 2011 Refer Link Below , it is Self Explanatory

www.icai.org/resource_file/96501588-1594.pdf

Querist : Anonymous

Querist : Anonymous (Querist)

14 September 2011 Dear Mr. Ankit

the link talks about target plus scheme. I need clarification about accounting of license which is transferable.

CA Ankit Gulgulia (Jain)

CA Ankit Gulgulia (Jain) (Expert)

15 September 2011 Read from Para 5 of this EAC opinion.

Querist : Anonymous

Querist : Anonymous (Querist)

15 September 2011 Dear Mr. Ankit

Please tell entries for licence alloted under Krishi Vikas Upaj Yojna

CA. Vikash Dwivedi

CA. Vikash Dwivedi (Expert)

28 September 2011 if your are expecting to use licence for certain period then you can capitalise and amortise it on proportionate basis based on the amount usage.

in the year of purchase:
Mandi Licence A/c Dr
To Bank

end of Every Year:
Amoritsation of Mandi Licence Dr
To Mandi Licence

P&L A/c Dr
To Amortisation of Mandi licence

CA. Vikash Dwivedi

CA. Vikash Dwivedi (Expert)

28 September 2011 confirm with some practicing Chartered Accountant before resorting on advice.

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