Packing Charges

This query is : Resolved

Rajesh (Querist)
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17 August 2010 Dear Experts,
If packing charges has been received from the customers pls tell me which is the best method to account.
(1) showing it as indirect income in the profit & loss account. Can it be treated as Revenue?
or
(2) Netting it of with the packing charges incurred.
In the above two ways which one complies the AS-9?
With regards,
Rajesh.

Maninder Jain

Maninder Jain (Expert)
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17 August 2010 In certain states, the packing charges if shown on the invoice forms part of the sales price.

So sales tax has to be paid on it.

If this is the case for your company, then better you show it as a part of revenue.

Otherwise you credit it packing expenses also.

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