As per the Cost Accounting Standard 5, Inward transportation cost is the transportation expenses incurred in connection with the materials/goods received at factory or place of use.

Inward transportation costs shall form the part of the cost of procurement of materials which are to be identified for proper allocation /apportionment to the materials/ products.

In case of a manufacturer having his own transport fleet, proper records shall be maintained to determine the actual operating cost of vehicles, showing the details of various elements of cost,

Such as salaries and wages of the driver, cleaners and others, cost of fuel, lubricant, grease, amortized cost of tyres and battery, repairs and maintenance, depreciation of vehicles, distance covered and trips made, goods hauled transported to the depot.

Separate records should be maintained as per Appendix 1 to the standard separately for

(i) Inward transportation

(ii) Outward transportation

(iii) Movement for home consumption and export

(iv) Separate for production and trading activities

(v) Separate for transportation other than by road, viz, by air, etc.

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