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

X Company Sells MEIS License at Discount; Guidance on Recording and ITC Reversal; No GST Applicable X company, an exporter, received a MEIS license valued at 100,000 from the DGFT, which it sold to Y company for 98,000. The query seeks guidance on how to record this transaction in X company's books. The response suggests showing 2,000 as a discount and reversing the proportionate Input Tax Credit (ITC) if availed on the procurement of MEIS. It confirms that there is no GST applicable on the MEIS transaction.