Liability of F.B.T. on Capital Expenditure

Dear All,

In case of newly established manufacturing domestic company, expenses incurred up to the date of commencement of production are capitalised. I would like to know in this case, company shall pay F.B.T. for the expenses capitalised or F.B.T. will be payable on expenses incurred after the commencement of production.

Thanks & Regards,

S. M. Desai

 

Replies (3)

Dear,

I thing if Catagory of Expenditure is attracted by FBT then FBT to be paid wheather it is Capital or Revenue in nature. 

According to my knowledge, FBT should be paid on this expenses also.

The FBT comes into picture if there is employee and employer relationship. Expenses incurred upto date of production need to be clasified into direct and indirect expenses. And the expenses should be revenue in nature. If it is correctly clasiffied as capital in nature then there will be no FBT as it is on revenue expenses.

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