Stock valuation
This query is : Resolved
01 April 2015
sir
i have a query that i purchased my goods in 5% sales tax rate. Now the sales tax has been increased to 8%. I have also purchased goods in 8% sales tax rate also.I want to know while doing stock valuation the cost of stocks how to calculate. i should consider the sales tax rate 8 or 5. should i bifercate the stock in 8% and 5% or should i calculate stock value only considering 8%.
please reply...........
i have a query that i purchased my goods in 5% sales tax rate. Now the sales tax has been increased to 8%. I have also purchased goods in 8% sales tax rate also.I want to know while doing stock valuation the cost of stocks how to calculate. i should consider the sales tax rate 8 or 5. should i bifercate the stock in 8% and 5% or should i calculate stock value only considering 8%.
please reply...........
01 April 2015
you need to bifurcate the same as the rate was change subsequent to purchase.
01 April 2015
but sir at present total stock is on 8%....so why the bifercation is required....please reply
01 April 2015
because there may be some items u purchased of 5% that is why, in case if at present there is no stock of 5% in closing stock then do not bifurcate
01 April 2015
but sir
i purchased goods in 5% and will sell it on 8%. so for stock valuation purpose we took the cost at present so at present cost is on 8% ......so why should i consider 5%
i purchased goods in 5% and will sell it on 8%. so for stock valuation purpose we took the cost at present so at present cost is on 8% ......so why should i consider 5%
01 April 2015
in your question the first line u wrote that u had some purchases made at 5% and then it increase to 8%....so in closing stock there may be some purchase u made have left of 5% sales tax.
01 April 2015
so if i purchase on 5% i should take for stock valuation 5% only.....not the 8%
01 April 2015
i told you again im repeatinf suppose there are 100 items in your closing stock consisting of 50 items of 5% and 50 items of 8% then if you do not have exact data of which items are there in closing stock as there may combination of type of items in stock then you must classify the stocks into 5% and 8% respectively
01 April 2015
thanks sir............doubt cleared
01 April 2015
you are welcome poonam...............
01 April 2015
Please see section 145A(a)(ii) of the Income tax Act,1961 which says 'TAX ACTUALLY PAID' should be loaded while valuing closing stock.
01 April 2015
Warrier sir,
This querry i think was in relation to accounts so AS 2 on Valuation of inventories shall be applicable for general purpose Financial statements.
This querry i think was in relation to accounts so AS 2 on Valuation of inventories shall be applicable for general purpose Financial statements.
01 April 2015
Please note that clause 7 of AS-2 is also in line with section 145A(a)(ii) of the IT Act,1961.
01 April 2015
Thank you sir for same.........
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