Accounting entries on grant of MEIS License and sale thereof

[bharat adesara]

Dear Sir

X co. is exporter and DGFT issued a licence under MEIS schem for import duty.

i.e. X co granted license valued ₹ 100000. and company sold it to y comapany @rs 98000

how this transaction should be recorded in book of X company.

GST is NIL rate am i right?

Please reply at the earliest

[YAGAY andSUN]

₹ 2000/- can be shown as discount. You have to reverse the proportionate ITC, if availed on procurement of MEIS. There is no GST on MEIS.

AI Summary

MEIS license accounting: record sale with discount and reverse input tax credit; GST not applicable. Record sale of the MEIS licence in the transferor's books with the shortfall treated as a discount. If Input Tax Credit was availed on procurement relating to the MEIS licence, reverse the proportionate ITC attributable to the licence. No GST applies to the sale of the MEIS licence.