Hi Everybody
We have purchased assets in the year 2002-03, 2003-04 and the purchase cost is 10 crore and 20 crores respectively(without excise duty). Excise amount for that assets transferred to Excise receivable on capital goods account the excise amount is Rs. 1crore and 2 crore respectively. We have commissioned the asset in 2003-04 and calculated depreciation 2003-04 onwards in books.
We have adjusted partly excise duty receivable against excise duty payable on sales. Now the balance available in excise duty receivable is Rs. 1.50 crores. Now Government has reduced the rate of excise duty from 4% to 0% and the companies need not colllect excise duty and the company has become exempted company so that the excise balance of Rs.1.50 crores cannot be utilized and cannot get refund also.
What is the accounting treatment for that amount
a)whether charge it off to the profit & loss account or add to asset and calculate depreciation from the year of commissioning or add to asset calculate depreciation from now onwards
What about income tax treatment-
whether to add to asset and claim depreciation in the current year or from the year of commissioning by filing revised return or charge the amount as an expenditure
regards
Joseph David
CAclubindia
