Valuation of inventories under GST
Introduction The Goods and Services Tax (GST) introduced on 1st July, 2017. There are various impacts of GST on business activities, like change in invoicing process, change in accounting process, etc. It has impact on valuation of inventories also due to reverse charge mechanism on goods under GST. This document prescribes the accounting treatment of GST on inventories. As per Ind AS 2 and AS 2, inventories are assets held for sale in the ordinary course of business (trader), in the process of production for such sale or in the form of materials or supplies to be consumed in the production process (manufacturer) or in the rendering of services (service provider). Therefore, inventories can be classified into: ( i ) Stock-in-trade; ( ii ) Raw materials; ( iii ) Finished goods; and ( iv ) Spare parts Valuation of Inventories under GST ...