Contingent Liability

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Querist : Anonymous

Querist : Anonymous (Querist)

07 February 2011 Dear All,

Please let me know custom duty saved against import of goods under EPCG license to be shown under contingent liability or not?

As per EPCG license company has to export within specified period 8 times of duty saved.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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07 February 2011 It is a contingent asset and need not be recognized in books.

Querist : Anonymous

Querist : Anonymous (Querist)

07 February 2011 How cum it is contingent assest? In case company is not able to export 8 times of duty saved in specified period then in that case company has to pay duty saved + 15% Interest

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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07 February 2011 I stand corrected. It is a contingent liability not to be provided for, but to be disclosed in notes on accounts.

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