EOU gets CST refund benefit once in a quarter. Upto 31st March 2010, the unit has claimed the CST paid till Sep09 (refund should be claimed within 6 months from the end of the quarter).
Q: Should the unit recognize the refund receivable(provision) for the period Oct09-Mar10 in its accounts for the year ended 31st march 2010?
Q2: Also the unit revises its sale prices annually in April. Should the unit recognize the price increase (the customer may/may not accept) in Mar 10?
The dilemma is to what extant should the prudence concept be taken in these regards.
Thanks in advance
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Accounting for Refunds in the year end
Replies (3)
Generally !!!
Refund amount is shown as current Receivbles whether applied "for" or "not" as at year end date.
As per as Q.1 .The CST receivable up to the 31.3.2010 has to be recognised in the closing of the books as on 31.3.2010. you cannot avoid that
Q.2. Little bit confused. you are revising the Sales price on April only. why you need to recognise in the March?
Q1: My view is "CST refund becomes receivable only after the unit claims for it from the department". The refund for the period 1.10.09 to 31.12.09 will be claimed before 30.06.10 and quarter 4 CST by 30.09.10. Can we treat refunds (may or may not be accepted by the dept) like interest accrued as on year end date??
Q2: The revision in April 10 is for the sales made prior to April 10 i.e. 2009-10 sales.. Should we optimistically increase our sales (for the price increase as per unit's calculations) now itself
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