FBT oN new R.C of car

FBT will not be applicable on Regn.Fee

  Reg EXp sud be debited to Fixed asset a/c nd fbt sud br paid on dep.

Dear Sir,

I agree that REgn. exp should form part of cost of assets... but i think that is in the case when CO. buy a new asset but where asset is already in use in that case, will they not form part of maintenance? because here these exp dont add to productivity or efficiency of assets..... so i seek your expert opinion once again on this issue.....

Thanks & Rgds

hi,

    u r correct that it is not for enhancing the productivity othe asset, but at the same time you shoud remember this it is a capital expenditure. it will give you enduring nature of advantage. without RC charges u can not even put to use  your vehicle at a particular state.

thats why it shoud be debited to asset a/c.

Hi

Iam not convinced that the expenditure on Regn is t be debited to assets a/c.

But to the other question whether the Regn Exp attracts FBT. I believe it falls within the ambit of FBT. It is like any other expenditure which is required for running the vehicle. The insurance for the car is a must for it to be used on the roads. Similarly Regn charges is also required for the car to be operated in a particular state. So I believe it falls within the category of "Running and maintenance ....."

You may please correct me if Iam wrong.

i don't wt will convince u that it is a capital expenditur not revnur one.u r not going to incur it every year.