Interest paid on Custom duty

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Nishila (Querist)
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10 June 2010 whether interest paid on custom duty on violation under EPCG scheme is to be capitalised or its a revenue expenditure? Please reply asap

RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)
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28 June 2010 Dear Nishila,

What is Revenue expenditure?
Ans:- Actual payment of cash or cash-equivalent for goods or services, or a charge against available funds in settlement of an obligation as evidenced by an invoice, receipt, voucher, or other such document. A Revenue expenditure is cash used in payment for goods and services consumed in a short period. A capital expenditure is cash used in purchase of fixed assets that last one year or more.

What is Capital expenditure?

Ans: - Payment made, or to be made, for the acquisition of a long-term asset, such as land, a house or machinery. In accounting, this would be recorded in the long-term asset account.

EPCGAUTHORISATION:-
As per chapter-5, of Hand book of Procedure vol-1 (2009-2014) paragraph 2 an application for grant of EPCG authorization may be made to RA concerned in ANF-5A along with documents prescribed therein in .

As per Para 5.3.3(1) an applicant may also apply for import of spares, tools, spare refractories and catalysts are required for installation and maintenance of capital goods.

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