Capitalisation of Stamp Duty paid towards Loan obtained
This query is : Resolved
05 March 2009
A Machinery was purchased which is not a qualifying asset as per AS 16. A loan was obtained to purchase the machinery. While the loan was obtained, Stamp Duty Charges were incurred.
Pls clarify whether the Stamp Duty Paid for obtaining loan can be capitalised?
or
stamp duty charges can be treated as borrowing costs and accordingly charged to P&L Account as the machinery is not a qualifying asset?
Pls clarify whether the Stamp Duty Paid for obtaining loan can be capitalised?
or
stamp duty charges can be treated as borrowing costs and accordingly charged to P&L Account as the machinery is not a qualifying asset?
05 March 2009
You can capitalize
05 March 2009
yes u can capitalize
05 March 2009
As per AS 10, any costs directly attributable to bringing the asset to its working condition for its intented use, can only be capitalised.
And finance and borrowing costs (Ancillary costs such as Stamp Duty, Processing Charges, etc. are also included in the finance & borrowing cost )can be capitalised and included as an element of cost of Fixed Asset, provided the asset is qualifying asset under AS 16.
In my case, the asset is not a qualifying asset. How can i capitalise?
plz support your answer with proper supportings
As per AS 10, any costs directly attributable to bringing the asset to its working condition for its intented use, can only be capitalised.
And finance and borrowing costs (Ancillary costs such as Stamp Duty, Processing Charges, etc. are also included in the finance & borrowing cost )can be capitalised and included as an element of cost of Fixed Asset, provided the asset is qualifying asset under AS 16.
In my case, the asset is not a qualifying asset. How can i capitalise?
plz support your answer with proper supportings
09 March 2009
AS-16 covers any charges incurred to obtain loan.
AS-10 covers any charges incurred for owning the fixed asset.
both covers the stamp duty. now the question is whether the stamp duty is paid for owning the machinery or to obtaining the loan amount.
so if its for machinery than u can capitalize as per AS-10 and if its for obtaining the loan amount than it falls under AS -16 and debited to P&L A/C.
AS-10 covers any charges incurred for owning the fixed asset.
both covers the stamp duty. now the question is whether the stamp duty is paid for owning the machinery or to obtaining the loan amount.
so if its for machinery than u can capitalize as per AS-10 and if its for obtaining the loan amount than it falls under AS -16 and debited to P&L A/C.
Message likes :
2 times
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Multiple payment of self assessment tax for A Y 2025-2026
- CAPITAL GAIN REDEVELOPED FLAT
- Requirement under FEMA &RBI
- Computation of Dividend
- REGARDING ITR FILING QUESTION
- Query regarding Item 61/62/63 vs Item 64 in ITR-3
- WHERE I SHOW GST 0% INVOICE IN GSTR1 (EITHER TABLE 7 OR TABLE 8)
- ITC BENEFIT ON BROKRAGE PAID
- Query regarding TDS on EPFO Higher Pension Arrears- under wrong section
- TDS NOT YET CREDIED
- Concept of Vendor and customner reconciliation
- Mistake in e-invoice identified after 24 hours
- EXPORT PAYMENT
- NRI ITR2 account in 2025-26.
- Query regarding reporting of exempt foreign remuneration in ITR (AY 2026-27)
- FEMA/RBI treatment — Amazon.ca arbitrage (US buy, Canada sell, goods never enter India)
- Goods return by customer
- INWARD REMITTANCE FOREIGN
- CPC and SAC
- Account freezed for Ineligible ITC Scrutiny for GST Annual Return
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
