Scrap Sales

IF SALE IS OF RAW MATERIAL THAN WILL BE DEDUCTED FROM COST OTHERVISE TO BE SHOWN AS INCOME IN P AND L AC.

It should be shown under other incomes

Regards

Dayananda

Depends on the materiality concept as well.

If it is more than 5% of the operating income you have to disclose it seperately in the schedules other wise merge with misc income.

AGREE WITH MR PRAVIN DEPEND UPON MATERILITY IF AMT SHOWN HIGH THEN IT SHOWN AS SALE OF SCRAP OTHERWISE SHOWN AS MISC INCOME

If it is a scrap from sale of Raw Material Then show it under Trading A/c as Sale of Scrap

In other scraps better to show it under P/L a/c as Misc.income..

Sir,

Could you please give me an Accounting Standard reference for the same ?

other income >> sale of scrap 

WILL YOU PLEASE TELL ME THAT WHAT IS THE TREATMENT OF SALE OF FINISHED GOODS SCRAP IN ACCOUNT AND IN GST / INCOME TAX  IN A TRADING COMPANY, 

PLEASE

The term “Scrap” has not been defined in GST Laws. In GST regime, in order to be taxable, the waste and scrap does not have to pass the test of manufacture or mechanical process or marketability. It is admittedly as ‘supply’ in course of business.

While taxability of waste and scrap is no longer contentious, finding proper HSN (Harmonized System of Nomenclature) code is definitely a tedious task. The highest rate for scraps material is 18%. HSN code is a 6-digit code that categorizes 5000+ products. It is a uniform code which is accepted worldwide.

Scrap/Waste are goods whether manufactured or obtained otherwise. In our opinion, no service tax would be applicable on sale of such scrap. However, if there is any involvement of services, say payment of commission for selling of scrap, then, there would be an implication of service tax, accordingly.

The lower level dealers are not formalised and exempt from GST and the customers/ waste generators too don’t have a GST number so the large dealer has to not just pay higher tax rates on his own margin but also for the value he purchases the scrap at from all the links in the chain below.

Will India’s recycling sector collapse under the new GST regime? (downtoearth.org.in)

SOME ARE TAXABLE, SOME R NOT

Sir please explain why sales of scrap being added to revenue from operation while preparing statement of P/L? 

Sir please explain why sales of scrap being added to revenue from operation while preparing statement of P/L?