Difference between contingent liability& disputed dues

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Jogeshwar Rao (Querist)

01 August 2016 What is the difference between Contingent Liability(AS-29) reported as a note to financials and Disputed dues payable as per clause vii of CARO??

Service tax refund receiveble pending on account of Appeal Made - Is it a contingent liability. Want to know the reason if yes.

Amol S Joglekar

Amol S Joglekar (Expert)

01 August 2016 Contingent...as the word itself suggects....it may happen, may NOT happen......The thing is dependent on happening or non happening of some event...is contingent
Disputed is the one which is already disputed....so no any contingency in it...The disputed amount may turn out to be contingent in due course
Service tax refund : This is dependent on happening or non happening of event viz. Appeal finalisation..and hence termed as contingent

Anand

Anand (Expert)

02 August 2016 service tax refund receivable is nowhere liability.. it's contingent income.. which is never considered while accounting..

Amol S Joglekar

Amol S Joglekar (Expert)

02 August 2016 yes, absolutely right.....
(since the assessee has preferred an appeal indicates that although assessee is expecting refund...it is not so as per the assessment order...with that reference, the answer is given)

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