Treatment for Infrastructure and amenities charges

[Velayutham Panchatcharam]

We are a developer in SEZ. We have paid infrastructure and amenities charges to Directorate Town and Country Planning which is statutory body in Tamil Nadu. We just want to know how to treat the these charges in the books of accounts, whether we have to add back to the building cost or consider as expenses.

AI Summary

Developer Seeks Guidance: Infrastructure Charges in SEZ to be Added to Construction Cost or Recorded as Liabilities? A developer in a Special Economic Zone (SEZ) inquired about the accounting treatment for infrastructure and amenities charges paid to the Directorate of Town and Country Planning in Tamil Nadu. They sought clarification on whether these charges should be added to the building cost or considered as expenses. The response indicated that if the charges were paid during the construction of the building, they should be included in the construction cost. Otherwise, they should be recorded under current liabilities.