Applicable exchange for booking of imported materials

[Bhairob Chandra Bor]

Dear Exparts,

A) Facts: 1) we are importing Raw Materials from Japan on regular basis. 2) 2-3 three shipments are coming every month.2) Payment terms of that materials 120 days from the Bill of Lading date (usance Letter of Credit for 120 days). 4) Transit period from Japan to our factory, Gurgaon 30days approx. 5) We have taken the exchange rates from the RBI website at the time of making the Good Received Notes 6) We have not taken the exchange rates on Bill of Lading date. Though our shipments are on FOB basis.7) Rests of the accounting entries are followed as per AS11.

B) Queries: what rate should be considered at the time of making GRN, is it the rate on Bill of Lading Date or on gate entry date (Enter in our factory)?

Kindly advice

Regrds,

bcb

AI Summary

Applicable exchange rate: use the Bill of Entry rate to book imported materials in accounts under AS 11.
Issue: whether to use the Bill of Lading date rate or the gate entry (GRN) rate for booking imported raw materials under AS 11. Advisory: book the import consignment in the books of account at the Bill of Entry Rate, i.e., the exchange rate on customs clearance, rather than the GRN or Bill of Lading date rates.