Income tax & accounting

This query is : Resolved

Rohit Rabadiya (Querist)
Follow

18 October 2013 Hello to everyone

one of my client is dealing in chemical business

he imports goods on CIF basis and enters into a high sea sales agreement.

My query is what should be the date of purchase?

at present he considers, purchases and sales on the date of entering into high sea sales agreement.

can he book the purchase on the date when goods were shipped/ commercial invoice date?

secondly, the ownership is transferred without taking delivery of the goods. does this amount to speculation as per IT Act??

Ganeshbabu K

Ganeshbabu K (Expert)
Follow

18 October 2013 CIF Imports can be recognizein our books on date of bill of entry,i mean you need to recognize when all risks and rewards of ownership transfer to you from your buyer
.
.
generally it will be on date of bill of entry
.
.
however from that date to till the date of inward to our factory gate it is treated as Goods -in-Transit

Ganeshbabu K

Ganeshbabu K (Expert)
Follow

18 October 2013 Exports also can be recognized when all significant risks and rewards of ownership transfer from you to buyer
.
.
So decide on date of recognition same as above

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now