Inventory valuation related query

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Ajnas (Student) 20 December 2020

1.Which import value is considered for inventory valuation for inventory cost calculation ? Import cost include which amount? CIF amount or FOB amount? Please reply
2.GST Unclaimed is considered for inventory cost?
3.GST claimed is considered for inventory cost?

yasaswi gomes (My grammar is 💯 good I) 21 December 2020

As2 does not recognise tax in valuating inventory. All unallocated overheads are expensed and Tax is also expensed but not into cost of inventory. Costs of purchase include all import duties which are not recoverable by the company from tax authorities. Hence, try and find out if CIF & FOB are taxable and include them in the cost of inventories.

Ajnas (Student) 04 January 2021

That means basic custom duty, social welfare surcharge is considered for valuation of inventories?

yasaswi gomes (My grammar is 💯 good I) 04 January 2021

Sry i did not notice this, the cost of inventories include taxes (not recoverable) as well, so I went through a very good illustrative example which I have included the link to and yes CIF, FOB, BCD, SWS can be included into the cost of inventories after calculating the total applicable duty as per below

https://www.investindia.gov.in/team-india-blogs/calculation-import-duty-india-formula-online-tools-and-exemptions

my main point was, like before, are they recoverable taxes or not?

Ajnas (Student) 05 January 2021

Thanks for your reply, one more query clearing & forwarding charges is considered as cost of inventory for inventory valuation

yasaswi gomes (My grammar is 💯 good I) 06 January 2021

yes you can add them to the cost

Ajnas (Student) 17 January 2021

Bro, In presentation of companies financial statement disclosure for value of imported goods what amount should be considered? its should be only CIF value or CIF + Custom duty paid on it?
freght and unloading labour wages is considered as part of inventory cost?

yasaswi gomes (My grammar is 💯 good I) 17 January 2021

AS 2.27 Information about the carrying amounts held in different classifications of inventories and the extent of the changes in these assets is useful to financial statement users. Common classifications of inventories are raw materials and components, work in progress, finished goods, stores and spares, and loose tools.

Your doubt is correct, it should be included apart from common classifications