Question ID :
33804
Sec.145A and GST
As per earlier sec.145A, grossing up of purchases, sales and inventory was done to include excise, VAT, service tax paid thereon to establish that inclusive method is on par with exclusive method profit. After introduction of GST and new. sec.145A, is it necessary to gross up purchase, sale and inventory by GST?
Posted by
balasubramanian
on
Sep 12, 2018
Filed Under
DIRECT TAXES
145A(ii) requires GST to be included in the cost for inventory (purchase, sale and stock-on-hand). But, do not include GST even for 145A purposes in case of fixed assets.
In support of the above, please note:
a. In ICDS II - Inventory Valuation, there is no reference at para 6 (or in para 12) to exclude 'recoverable taxes' from definition of Cost similar to AS 2, para 7.
b. But in ICDS V - Fixed Assets states at para 5 that 'recoverable taxes must be excluded for capitalization and depreciation. This is in line with section 16(3) of CGST Act which denies input tax credit if depreciation under Income-tax Act is availed on that portion of the value of capital goods.
Posted by
CA. JATIN CHRISTOPHER A on
Sep 17, 2018