Entry of bill of entry in books

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SNEHASISH DEY (Querist)
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04 April 2018 SIR,
WE ARE IMPORTING GOODS FROM U.A.E . OUR BILL OF ENTRY HAS BEEN FILED ON ICEGATE ON 28.03.2018 BUT DUE TO SOME AMOUNT PROBLEMS IN DUTY WE ARE NOT ALE TO PAY THE DUTY. WE HAVE PAID THE DUTY ON 03.04.2018 . NOW QUESTION IS IN WHICH YEAR THE PURCHASE ENTRY WILL BE PASSED FOR THIS BILL OF ENTRY, FY 2017-18, FY 2018-19. PLZ HELP ME.

SNEHASISH DEY

SNEHASISH DEY (Querist)
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04 April 2018 please help on the problem

Asha Kanta Sharma

Asha Kanta Sharma (Expert)
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06 July 2024 In your case, the year in which you should pass the purchase entry for the imported goods from UAE would depend on the accounting standards you follow and when the liability for duty arises. Here’s a general guideline:

1. **Accrual Basis Accounting (Most Commonly Followed)**:
- According to accrual basis accounting principles, expenses (such as customs duty) should be recognized in the period in which the liability arises, not when the payment is made.
- The liability for customs duty typically arises when the goods are imported, which is when the Bill of Entry is filed.

2. **Specific Guidance**:
- Since your Bill of Entry was filed on 28.03.2018 but the duty was paid on 03.04.2018, the liability for duty would generally be considered to have arisen on 28.03.2018, the date when the goods were imported.
- Therefore, for accrual basis accounting, you should record the purchase entry and the related duty expense in the financial year 2017-18, which is the year when the liability (duty) arose.

3. **Impact on Financial Statements**:
- Recording the purchase entry and duty expense in FY 2017-18 aligns with matching principles, where expenses are recognized in the same period as the related revenue (or in this case, the imported goods).

4. **Accounting Entry**:
- You would record the entry in your books as per the date of liability (28.03.2018):
- Debit: Import Purchase Account (Cost of goods imported) - Amount
- Credit: Customs Duty Payable Account (Liability for customs duty) - Amount

By following these guidelines, you can accurately reflect the import transaction and duty payment in your financial records for the appropriate financial year.

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