Payment of Import Purchase


This query is : Resolved 

Quick Summary
This discussion addresses how to handle a discrepancy between the amount paid for an import purchase and the value stated on the Bill of Entry (BOE). The user paid £9,75,000 (converted to INR) for a purchase valued at £10,00,000 on the BOE. The core issue is adjusting the £25,000 difference. The consensus is to account for the difference as a foreign exchange gain or loss in the Profit & Loss account, which is permissible under income tax regulations and taxable.

12 August 2021 My client has Import Purchases from England and the purchase bill is in Pound currency. I have entered Purchase in INR as per Bill of Entry from Customs.
We have paid Rs. 9,75,000 (lumpsum pounds) to England supplier and the Purchase is Rs.10,00,000 as BOE. Therefore how to adjust this diference of 25,000(10lakhs - 975,000) ?
pl guide.

13 August 2021 No need for any adjustments, account what is paid for supply.
BOE value is for customs duty purpose only.

13 August 2021 Dear Seetaramji,
When i make payment to supplier I Debit d England party Rs.9,75,000.
In Purchase entry .... I Credit the England party for Rs.10,00,000. so there is difference of 25000 Dr balance in ledger of England supplier. We have paid in full and the balance should be Nil, how to adjust Rs.25k.

13 August 2021 Adjest in foreign exchange gain/loss A/c. in Profit & Loss A/c. It is allowed as per Income tax Act as well.

13 August 2021 Credit purchase account for 25000 and debit England party.

19 August 2021 Seetaji if I Cr Puurchase then Purchases will get reduced, right?

19 August 2021 Sonalji I have foreign gain, will it be Taxable? Dhanyavaad.

19 August 2021 Yes, you are right.
Yes, forex gain is taxable.

20 August 2021 Yes. Forex gain is taxable. You can claim forex loss if any.


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