Closing stock valuation as on 31.03.18

Please explain the treatment of GST for Closing Stock Valuation as on 31.03.18

Because as per Sec 145(2) and ICDS II Closing Stock shall be inclusive of taxes

whether there is any Taxability due to GST on Closing Stock

If we add GST on Closing Stock in Computation As per ICSD II, where the GST shall be deducted?

 

Replies (2)

As per the cost defination in ICDS II it does not specify to include taxes for which setoff can be claimed.

As per section 145A (i) it stated to follow ICDS 2 and in the second clause it specifies that it shall be adjusted with taxes (Same as the earlier clause)

While reporting in 3CD under clause 14 we have to show that the impact in profit and loss account if we follow inclusive method - That is nil (This is as per tax audit guidence note issued by ICAI)

Books of accounts should be maintained by exclusive method but while computing income tax one should show the adjustments on account of following inclusive method.

if we follow the exclusive method and while computing income tax, add the GST on Closing Stock which will increase profit then how we will deduct the same amount to nullify it??

.

 

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